Industrial Management and Reforms in North Korea

Abstract

At the second session of the 8th Supreme National People’s Congress (21 April 1987), the North Korean Prime Minister, Lee Keun-Mo, submitted a report entitled ‘The Third 7-Year Plan (1987–93) for the Development of the People’s Economy’.¹ According to this report, there are plans to increase the national income of North Korea at an annual rate of 8 per cent and industrial production at a rate of 10 per cent. The 10 per cent target is, however, relatively modest given that the goal set for the annual growth rate of industrial production during the Second 7-Year Plan (1978–84) was 12.1 per cent. It is therefore not surprising that the Prime Minister, in another report entitled ‘For the Successful Completion of the Third 7-Year Plan’, called for an improvement in the management of the economy and for higher productivity growth. This call reflects the renewed recognition by North Korean authorities of the seriousness of their economic problems, the official claims of high growth rates notwithstanding. Specifically, the report argues for rationalisation of economic management, including an ‘independent accounting system’, efficient use of resources, significant cost reductions, and improved product quality and labour productivity. Moreover, at the meeting, the communist leader Kim Il-Sung himself emphasised that the accomplishment of the great goals stated in the New Perspective Plan would not be possible without decisive innovations in the methods of guiding the economy and the management of enterprises.²