Local factories in North Korea

Interview by staff reporter, Joon Ang Ilbo, 14 March 2002

Following is an excerpt from Tong-il Hankuk (Unified Korea), a South Korean monthly that interviewed a North Korean who served in the North—s General Bureau for Local Industry before defecting to the South.

Q: How does North Korea—s economy operate in local areas?
A: Economic plans in North Korea are drawn out, supervised and implemented under the unitary system centered around the State Planning Committee and passed down to the provincial, municipal and district levels to the factories and small businesses. Each region has a General Bureau of Provincial Industry to take care of all production, sales, and management of resources.

Taking for example Ryanggang province, a region with a population of 620,000 and consisting of 12 counties and 151 local factories. The general bureau would try to estimate the number of women and students in the province, then decide on the amount of foodstuffs, clothing, soap, school supplies and other daily necessities for the next year and send the report to the planning committee sometime around mid-July. The plan is ratified in December and sent back to the local areas. Each factory then starts production to fulfill the required quota. Usually a factory is required to cover just about all the daily necessities needed for the people which would naturally lead to 100 different items from foods like soy sauce and bean paste to toothbrushes, clothes, shoes—just about everything you can think of.

The daily-use items are usually distributed around commemoration days or special holidays in North Korea, most notably on April 15, the birthday of Kim Il-sung.

Q: How do local areas appropriate the needed resources for factory production?
A: The central government is there to supply the needed resources to the local regions. About 80 percent of the daily-use products are from the capital city. Just 20 percent of the supplies are made in the local areas. The trend turned pretty much the opposite by the late 1990s. With the serious economic collapse, the central government began to wobble, unable to secure its own supply routes. That dealt a serious blow to local industries. Local regions are now producing many things on their own for self-survival.

Q: How is a central factory different from a local factory?
A: The major difference between central and local factories is found in the quality of the goods. For example a central food factory focuses on producing just one product, whether it be sugar or soy sauce or bread. Local food factories produce everything from salt to biscuits to liquors. So, of course, the quality is lower than goods produced in specialized factories.

Q: Where do consumers actually buy the goods?
A: From the numerous commercial distribution stores installed near factories, housing complexes and other public facilities.

Q: How does the North deal with surplus goods?
A: Surplus goods can be exchanged with other needed products from nearby regions with the aid of the state-controlled commercial administration. We usually used trains and other vehicles to deliver the products in and out. Using those surplus goods we were also able to receive or purchase products from central factories.

Q: What kind of person gets to serve in the General Bureau for Local Industry?
A: A person is required to complete a 6-year course at a technology university and fulfill his mandatory military service. The rest is decided by ruling party members of that province. Performance is still judged by central authorities, who could replace a bureau employee in a worst-case scenario.

Q: When was the bureau established?
A: Decades ago when North Korean founder Kim Il-sung emphasized the significant role of local industry in increasing the production of the nation—s daily necessities. The nation, being notified of the stern guiding words, immediately went to action establishing many local factories.

Things ran smoothly during the 1970s when local industries did well with production. That was the time when the people actually benefited from the socialist state. It didn—t take much to create a boom in local industry at the time as resources, machinery and human labor were all there. Transportation problems were also taken care of as most of the local factories were built in the vicinity of commercial stores. This fostered close ties between industrial and agricultural sectors and enabled the rise of women in the labor force.

Then in the 1980s socialist markets began to collapse one by one, leading to a serious crisis in securing energy and other basic resources. In North Korea—s case it had labor and machinery, but no electricity to power the machines. The nation somehow managed to generate sufficient electricity with wind power, but hardships caused by lack of other resources lingered.

Q: How is the supply route for consumer goods in the North nowadays?
A: At the moment the North—s machinery is rusting in the factories and the quality of goods is simply beyond description. The nation has returned to the point when the elder Kim [Kim Il-sung] urged his people to work hard to secure basic goods decades ago. People are in dire need of things like dishes and soap. But I believe the North—s local industries could make it to the top once more, as soon as the nation secures better conditions abroad to bring in the needed resources to get the factories and power plants rolling.