A factory in Manpo, Chagang Province, seen across the border in China. (Kang Dong Wan)

North Korean enterprises in South Pyongan Province were found to have posted abysmal results in a recent review of how well companies attained economic targets for the first half of 2022. The province’s companies appear to be suffering from severe shortages of raw materials or cash.

According to a Daily NK source in South Pyongan Province on Thursday, the party committee of South Pyongan Province recently reviewed how well local enterprises had carried out economic plans for the first half of the year.

The result of the review, conducted among all enterprises to determine the extent to which each sector achieved its economic goals, revealed that enterprises had achieved less than half of their targets.

The source said production of electricity, coal, machinery and food had fallen far below expectations.

When the authorities began analyzing and criticizing the results to determine the reasons behind each sector’s failure to achieve its targets, they found that, in all sectors, shortages of production supplies and raw materials were blamed for the disappointing results.

North Korea’s foreign trade has diminished each year since early 2020, when the country shutdown its border to stop the spread of COVID-19. North Korean industries have suffered woeful shortages of necessary raw materials as a result.

According to a report on trends in North Korea’s external trade in 2021 published by the Korea Trade-Investment Promotion Agency (KOTRA) on July 14, North Korean exports totaled USD 81.96 million last year, down 8.2% from the previous year. Imports totaled USD 631.37 million, down 18.4%.

North Korea’s trade deficit last year was USD 549.41 million, down 19.7% from 2020, when it was USD 684.37 million. The shrinking trade deficit was because imports shrank more than exports last year. It appears that North Korea’s imports fell last year because the country suffers from cash shortages due to the protracted border closure.

North Korea’s biggest import items last year were crude oil and refined petroleum, totaling USD 370.35 million and accounting for 58.7% of total imports. After that came plastic, rubber and fertilizer.

The source said that while North Korea continues to import petroleum products, imports of other raw materials remain woefully insufficient.

The problem is that despite falling production due to raw material shortages, North Korea has failed to present clear measures to resolve the shortages.

According to North Korean media reports, an enlarged meeting of the Cabinet chaired by premier Kim Tok Hun on July 14 “reviewed the fulfillment of the national economic plan for the first half of the year and discussed measures for thoroughly carrying out the decisions made at the 4th and 5th plenary meetings of the Central Committee by unconditionally fulfilling the national economic plan for the third quarter of the year.”

According to the news reports, the meeting discussed “the issue of taking decisive measures to further improve the economic management system and method in keeping with the actual conditions and reinforce the state’s unified command system and other issues.”

In fact, the recent review by the South Pyongan Province party committee reportedly concluded that “insufficient loyalty” was a reason for the failure to achieve economic targets for the first half of the year.

According to the source, a high-ranking cadre simply called on enterprise workers to “elevate their loyalty to the party and making every effort to achieve the targets issued by the party.” He presented no concrete measures to achieve the targets. 

Because of this, participants in the review reportedly expressed dissatisfaction, wondering why they were holding such an “absurd meeting” in the first place.

Please direct any comments or questions about this article to dailynkenglish@uni-media.net.

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Seulkee Jang is one of Daily NK's full-time journalists. Please direct any questions about her articles to dailynkenglish@uni-media.net.