North Korean Economy Will Not Be Restored As
Long As the Party Secretaries are Placed in Factories
Han Young Jin / Defector
from Pyongyang, Reporter of the DailyNK
Chinese businessmen wish to break off business relations
with North Korea
Those who are interested in North Korea might have heard of ‘Daean
management system.’ The word ‘Daean’ comes from Daean district in
South Pyongan province.
On December, 1961, Kim Il Sung visited the ‘Daean Electric Factory’
in Daean area, Nampo city and ordered a new management system. He
placed the party secretaries into each factory as the chief executive
(in the position for supervising without working) and gave them
administrative power. Before the new system was implemented, managers
of the factories or the companies were operated in a system called
‘sole manager management system’. After Kim Il Sung introduced ‘Daean
management system’, ?he sole manager management system’ was abolished
and changed into a new system where the party secretaries could
directly control the factories.
‘Daean management system’ Failed
It was action of reorganization which allowed the power of the
Party to reach the economic sectors and allowed the Worker? Party
to monopolize the entire national system. Ever since then, when
Kim Il Sung ordered something to factories or companies all around
the country, they just obeyed without presenting alternatives. It
meant that a vertical economic management system was set up.
Kim Il Sung emphasized ‘Daean management system’ by saying “all
leading labor sectors should be considered as political business
according to Chungsanri spirit and Daean management system which
are introduced by the party….” in New Year’s Address from 1963 to
1993 until he died.
However, ‘Daean management system’ became the major factor that
severely damaged North Korean economy because the party secretaries
who did not know much about economy merely “operated” factories
by making their positions as a hotbed of absurdity and corruption.
The title, ‘manager’ in North Korea is same as ‘president’ in South
Korea. The reason ‘Daean management system’ was introduced outwardly
was to operate factories and companies in cooperation between the
party secretary, the managers and the chief engineers in order to
prevent bureaucratic manipulations. However, it was like “Many go
out for wool, and come home shorn themselves.”
After ‘Daean management system’ was implemented, hundreds of the
party members who had nothing to do with making economic profit
were appointed as factory committee members. Originally, the party
secretary, the manager and the chief engineer should participate
in the party committee and make decisions related to the company
operation, but if the manager and the chief engineer are not cooperating
with the party secretary, the party secretary has the right to fire
them to the ground of lacking loyalty to the party.
Chinese businessmen, “we will break off the business relations
with North Korea”
The party secretaries know much about politics and scholastic matters,
but they do not know much about technical know-hows and administrative
affairs. They allow reports related to the factory to be transmitted
only if they like them and if they fits their interests. This kind
of management makes a deadlock in economic activities and factories
are finally bound to fail. In this case, all the blame goes to the
managers, yet the party secretaries does not take any responsibility
for the damages done.
This is an episode the cosmetic factory in Sinuiju a few years
ago. Even though the factory has a long history because it was set
up during the Japanese occupation, facilities and structure were
not upgraded at all. Some countries suggested a joint operation,
but all of them stopped the process because the investment agreement
from the North Korean part was not clear. One day, a well known
Chinese businessman suggested a joint work.
The factory and the businessman concluded a joint investment agreement
and the businessman returned to China after asking his counterpart
to fulfill the joint requirements. When he came back to North Korea
after a while, he was not able to meet the manager who made the
agreement with him, but met another manager. He asked curiously,
“where is the manager?” and the new manager answered, “he was promoted
and sent to another place.”
He was confused, but he concluded a new joint investment with the
new manager. The new manager promised him that they will put special
efforts to fulfill the requirements. When he returned to China,
he got a call from another manager of the factory who said “the
manager (he concluded the new contract with) was promoted and moved
to another place.”
He got very angry about it and shouted “Are you pulling my leg?”,
“You are all swindlers” and shouted”No more work with your country.”
He never returned to work with North Korea after that. The truth
about the previous two managers is that they did not get promoted
but were fired because of some minor mistakes which occurred in
the process of concluding the joint agreement. These mistakes were
discovered by the party secretary and he reported it to the party.
When you conclude an agreement with a North Korean company, you
must involve the party secretary. If you conclude an agreement with
the manager only because s/he is the person in charge, all you can
expect is frustration.
The party secretary, ‘a hotbed of absurdity and corruption’
In terms of administrative affairs, the manager has the responsibility
for everything, so some of them make his/her own voices heard. If
the manager expresses his opinions clearly, the party secretary
thinks that his vested rights shall be weakened. That is why they
hand in fake reports about the manager to the party and eventually
make him get fired. Participation of the party in the economic management
does not support economic activities but hinders it.
That is why the party secretary became a hotbed of absurdity and
corruption. Many people only flatter around them. The party secretaries
who are blinded to “gain profits” take bribes from their flatterers
and their personal affairs become inseparable from business, so
they tend to ignore business principles. They do not hesitate to
engage in illegal trafficking if such activities do not endanger
Kang Yoen Hee (alias, 43, living in Inchoen, South Korea) is a
defector from Chongjin city of North Hamkyong province. Her father
was the manager of Chongjin food factory. Her father was an honest
man who operated the factory followings the principles and did not
embezzle factory money. When the food crisis occurred, her father
tried to maintain actual production by securing materials from other
areas. Actual production could be maintained because of her father’s
efforts, but the party secretary sold products to the black markets
and made lots of money. Her father became very busy trying to secure
materials by traveling all around the country, while the others
sold the products from the factory in black markets. It was like
filling a bottomless vessel.
The secretary placed beautiful girls as accounting clerks and had
love affairs with them. Her father criticized the secretary’s immoral
behavior in a meeting. The secretary held a grudge against him and
made a false report about him and submitted it to the party. Her
father was fired soon after.
“Do you know how difficult we were in the mid-1990s? He was fired
for nothing and with nothing, but he tried to support the family.
He eventually passed away.”
Kang added, “North Korea is maintained by the party and will also
collapse by the party at the end.”
One beats the bush and another catches birds
Managers work hard and take full responsibility for everything.
Secretaries give orders but never take any responsibility. Some
managers who get sick and tired of secretaries’ behaviors report
about their wrongdoings to the chief secretary of the party. Then
the chief secretary lets the fact known to the related secretaries.
Birds of a feather flock together. The related secretaries hold
grudge against the managers and fire them with whatever it takes.
This kind of absurdity and corruption are common in North Korea
right now. No North Korean movie that criticizes party members was
ever introduced so far. This is because Kim Jong Il ordered not
to make such kind of movies.
However, the party secretaries are the corrupted ones whose conduct
s are immoral. Reformation and Liberalization are far off without
solving this problem.