North Korean authorities recently ordered factories and other businesses to ensure they are implementing the country’s own “economic management system,” Daily NK has learned.
“At the end of June, the government issued an order to relevant factories and companies in all sectors of the economy to implement the new ‘Economic Management System in Our Style,’” a source in Ryanggang Province told Daily NK on July 8.
Since gaining power, North Korean leader Kim Jong Un has granted greater autonomy to collective farms, factories and other businesses with a view to boost productivity.
These efforts, however, have reportedly failed to produce satisfactory results due to unfavorable conditions both at home and abroad. Now that trade has come to a standstill due to the COVID-19 pandemic this year, the country faces production-related difficulties across its entire economy.
In response, North Korean authorities have once again highlighted the importance of autonomy in business operations, encouraging “production units” to take responsibility to “achieve results.”
Daily NK’s source said that the recent order emphasized that all businesses will be free to decide what to do with all “excess goods” they produce on top of state-set quotas from July 1 to Apr. 15, 2022 – the 110th anniversary of Kim Il Sung’s birth.
The order stipulates that businesses should “pay” their employees a monthly stipend with the “excess goods” produced based on the number of hours worked and their “achievements.” The order also encouraged businesses to provide workers who work well in “special environments” or to improve their skills with bonuses.
The authorities instructed people’s committees to work in partnership with party committees to submit proposals aimed at carrying out these orders by June 27. They also ordered that the proposals should be implemented between July 1 and July 5 following their approval.
While business managers acknowledge the excellence of the new economic management system, they question whether it is reasonable in light of production difficulties caused by a lack of materials and electricity. They believe the government does not realize that state action must come first, the source told Daily NK.
“Workers are also skeptical, saying that the government is effectively telling everyone to be self-sufficient, but the era of surviving with one’s own bare fists is over,” the source said, adding, “They are complaining that with no money and no strength, a national plan alone can’t produce [results] out of thin air, and it’s impossible for people to embrace the spirit of sharing with others in such difficult circumstances.”
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