Cabinet Acknowledges June 28th News

North Korean officials have formally acknowledged that some factories, enterprises and cooperative farms in the country have been experimenting with new economic management methods since last year. The comments, published in the Chongryon publication Choson Sinbo on May 10th, appear to partially confirm the existence of the “June 28th Policy,” which Daily NK reported on exclusively in summer last year.

Cabinet official Kim Ki Cheol and State Planning Commission Vice-director Ri Young Min note in the piece that some new economic measures have been adopted, but add that legal and institutional frameworks still require alteration if changes are to be expanded. However, their comments serve as official acknowledgement of experimental economic change.

According to the piece, Kim Jong Eun issued instructions to the Party Central Committee in April 2012 decreeing that the roles and responsibilities of lower economic officials should be expanded. However, Kim also said that changes must conform to socialist principles, raising questions about how far North Korea is willing to go in pursuing economic improvement.

Daily NK first reported news of the new economic policy on July 10th last year, citing news from inside sources who described a policy subtitled, “On the establishing of a new economic management system in our own style,” and said that it would enter force on October 1st.

According to information received at the time, farming work units were to be reduced in size under the policy. At the same time, farmers were to retain 30% of their production plus any production in excess of state targets, and procurement prices paid by the state were to rise to reflect market levels. Meanwhile, state distribution of foodstuffs was to cease for workers in a proportion of factories and enterprises, while wages were to rise and be paid in money rather than in kind.

The Choson Sinbo piece also confirms that the state is working to concentrate economic activities under the auspices of the Cabinet, which has been run since April this year by Pak Pong Ju, an official who played a key role in implementing the economic changes of July 2002.

“All problems that arise in the course of economic activities are focused on the Cabinet, and rules and regulations are being comprehensively established under the Cabinet’s unified leadership,” it states.