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Weapons of Mass Destruction (WMD)

Information on the 2nd Session of the 11th Supreme People's Assembly

ROK Ministry of Unification
2004-03-30

1. overview

  o Date and Venue: March 25, 2004 (Thurs.), [Mansudae Assembly Hall] in Pyongyang

  o Attendees: Cadres of the Workers' Party, government and military including Choi Tae-bok, Park Bong-ju and Mun Il-bong

    - Of a total of 687 representatives, 633 persons attended the session (list of the persons on the presidium: not reported).

  o Agenda

      Business Methods of the Cabinet of the Democratic People's Republic of Korea in the 92nd Year of Juche (2003) and its Tasks for the 93rd Year of Juche (2004); and

      Account Closing of National Budget Implementation by the Democratic People's Republic of Korea for the 92nd Year of Juche (2003) and its National Budget for the 93nd Year of Juche (2004).

  o Proceedings: Opening Address (Choi Tae-bok, chairman of the Supreme People's Assembly) Report (Cabinet Prime Minister Park Bong-ju and Finance Minister Mun Il-bong) Debate Closing Address (Choi Tae-bok)

2. Major Details

A. Business Methods of the Cabinet in 2003 and its Tasks for 2004

 [Performance in 2003]

  o Took a sizeable leap forward in its efforts to lay the foundation for a strong national economy.

    - Consolidated heavy industries and concentrated investment on development of light industries and agriculture.

    - Achieved significant results in industrial production by focusing on reconstruction and/or modernization of factories and other industrial establishments, and on projects to foster new competencies.

      Gross industrial production up 10% from the previous year, electric power generation up 21%, lead and zinc production up 76%, iron ore production up 46% and cement production up 27%.    

 [Tasks for 2004]

  o To achieve a major breakthrough in the development of the overall national economy and to improve the population's living conditions by developing high-priority economic sectors such as power generation, coal production, metalworking industries and railways, and by focusing on light industries and agricultural production.

    - To concentrate efforts on securing steel needed for the development of high-priority economic sectors.

  o To designate the development of information technology, nano technology and bioengineering as the primary directions of scientific and technological development, to ratchet up science and technology exchange with foreign nations, and to substantially increase investments in science and technology projects.

  o To expand and develop external trade in multifaceted ways.

    - It is necessary to encourage creation of export bases by all economic units, expand equity joint ventures/joint ventures, pursue cooperative projects with international organizations for economic development, etc.

  o To complete the development of socialist economic management.

    - To modify/complement laws and standards related to economic management under the principles of socialism and practical benefits, based on current situations, and to strengthen supervisory control and legal struggle against any violations of laws.

  o To enhance the function and role of the Cabinet.

    - To set up a well-organized economic guidance and management system under the Cabinet's control and solidify the Cabinet's guidance of and control over the lower units of the power hierarchy.  

[Characteristics]

  o Expressed determination to consistently push for implementation of economic reform policies under the Cabinet's leadership.

   - Expressed determination to remedy problems revealed in the process of executing the July 1 economic measures and to rectify a troubled economic order.

    - Decided to restore production to normal levels by overhauling the economic infrastructure, and to expand the supply of food and other daily necessities in order to make the lives of the domestic population more stable.

    - Hinted at aggressive execution of open policies to attract foreign capital and technology.

B. Account Closing of the National Budget Implementation for 2003 and National Budget for 2004

 [Account Closing for 2003]

  o Revenues: 100.9% of the applicable plan

  o Expenditures: 98.2% of the applicable plan

  o Revenues & Expenditures: 2.7% surplus, compared with the applicable plan

 

Expenditure for
the National
Economy

Public
Welfare
Costs

Military
Spending

Administrative
Costs

Total 

Ratio

-

40.5%

15.7%

-

100.0%

  Last year, North Korea announced only the proportions of its military spending (14.9%) and its expenditure for industrial, agricultural, urban and local development, etc. (22.7%), an item of "expenditure for the national economy."

  This year, North Korea did not reveal the proportion of its expenditure for the national economy, but only announced its expenditure for industrial, agricultural, urban and local development, etc. (23.3%).

 [Budget for 2004]

  o Revenues: Up 5.7% from the preceding year (16.5% increase in profits of state-owned companies)

  o Expenditures: Up 8.6% from the preceding year

 

Expenditure for
the National
Economy

Public Welfare
Costs

Military
Spending

Admini-strative
Costs

Total 

Ratio

-

-

15.5%

-

100.0%

Increase Rate

Science & technology: 60.0%

 

Additional measures for enhancement of material/cultural life: 8.1%

Education: 9.5%

Health: 5.9%

-

-

 8.6%

 [ Characteristics ]

  o Revealed the proportions of certain items only, without providing specific figures of the budget/account closing amounts for this year, as was the case in the previous year.

    - North Korea tends to omit a financial report or not divulge specific figures during a period of economic change or transition.

  o Made public the proportion of public welfare costs, which the country did not specify in its account closing for the preceding year. 

    - 38.1% in 2001 Not publicized in 2002 40.5% in 2003

  o Among its expenditures for the national economy, raised the budget for science and technology substantially this year (60.0%).

    - Expressed firm determination to support advanced technology and basic/applied sciences, since the country stressed the integration and harmonization of the economy and science/technology in the New Year's joint editorial.  

  o  Maintained military spending at the same level as the previous year.

3. Overal Evaluation

  o During this session, North Korea set the 60th anniversary of the foundation of the Workers' Party in 2005 as the target date for improving living conditions for its populace. This seems to display its determination to strengthen the function and role of the Cabinet in bringing about better economic performance, and to consistently carry out the [July 1 economic measures].

    - Decided to concentrate efforts on improving the capability of the overall economy, including high-priority sectors.

    - Set an internationally oriented direction that includes expanded trade and cooperation with international organizations, while taking a confrontational/combative stance toward resolution of its nuclear issue with the U.S. and Japan.     

  o Regarding the results of its budget implementation for the preceding year, North Korea:

    - Intentionally unveiled the proportions of some budgetary items without providing specific figures, since the July 1 economic measures and follow-up actions failed to produce a tangible outcome.

  o Regarding the itemized budget implementation for the preceding year, in particular:

    - The fact that the country did not specify the proportion of total expenditure for the national economy suggests that public bond issue had failed to effectively finance economic development.

    - Meanwhile, the fact that the country announced the proportion of public welfare costs suggests an increase in its budgetary expenditure for improving people's living conditions.

  o Concerning this year's budget:

    - North Korea is keeping its military spending at the same level as the preceding year in the face of strained political circumstances for such reasons as its nuclear issue.

    - The country is showing a marked determination to achieve economic growth through the development of science and technology, by sharply increasing its budget for science and technology.

    - However, it is believed that North Korea, which has yet to normalize production, will face difficulties in increasing revenues, including profits at state-owned companies.    

  o Accordingly, it is expected that North Korea will explore various ways to increase its revenues this year.

# Attachment

< Agenda of the Sessions of the 10th Supreme People's Assembly and  the 1st Session of the 11th Supreme People's Assembly >

SPA

Date
(Duration)

Major Discussions/Decisions

1st Session of the 10th Assembly

1998.9.5
(1 day)

o Modification/supplementation of the socialist Constitution
o Naming of the chairman of the National Defense Commission (Kim Jong-il)
o Election of state guidance organizations

2nd Session of the 10th Assembly

1999.4.7-9
(3 days)

o Account closing for the 1998 budget and deliberation on the 1999 budget
o Adoption of the National Economy Planning Act.

3rd Session of the 10th Assembly

2000.4.4-6
(3 days)

o Account closing for the 1999 budget and deliberation on the 2000 budget
o Approval of the Education Act, External Economic Arbitration Act and Civil Aviation Act.
o Renaming of the Ministry of Public Security to the Ministry of People's Security
o Ratification of the [North Korea-Russia New Treaty]

4th Session of the 10th Assembly

2001.4.5
(1 day)

o Business methods of the Cabinet for 2000 and tasks for 2001
o Account closing for the 2000 budget and deliberation on the 2001 budget
o Approval of the Processing Trade Act, Lock Gate Act and Copyright Act o Organizational issues

5th Session of the 10th Assembly

2002.3.27
(1 day)

o Business methods of the Cabinet for 2001 and its tasks for 2002
o Account closing regarding the 2001 budget and deliberation on the 2002 budget
o Enactment of the National Land Planning Act

6th Session of the 10th Assembly

2003.3.26
(1 day)

o Account closing regarding the 2002 budget and deliberation on the 2003 budget
o Approval of five bills, namely the Military Service Act, Organization Act, River Act, Accounting Act and Urban Planning Act

1st Session of the 11th Assembly

2003.9.3
(1 day)

o Naming of the chairman of the National Defense Commission
o Election of state guidance organizations
o Adoption of the ?decision? to approve the measures taken by the Ministry of Foreign Affairs regarding the nuclear issue.


.........................................................................................................................

Notes

Expenditure for the National Economy:

Refers to basic construction funds necessary for construction of various facilities for the purpose of increasing production, liquid funds necessary for production/distribution of raw materials or intermediary inputs, etc.

Public Welfare Costs:

Refers to funds aimed at promoting welfare of the general population and meeting common needs of society, including additional measures for enhancement of material/cultural life, science and education, culture and health, etc



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