[imText1]Those who are interested in North Korea might have heard of ‘Daean management system.’ The word ‘Daean’ is from Daean –gun in Pyonganam-do.
On December, 1961, Kim Il Sung visited ‘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 (it is the position for supervising without working) and gave them administrative power. Before the new system is carried out, the managers of factories or companies operated it. In other words, it was ‘sole manager management system.’ After Kim Il Sung introduced ‘Daean management system’, ‘sole manager management system’ was abolished and was changed into a new system where the party secretaries could control the factories.
‘Daean management system’ Failed
It was a ‘restructuring’ which allowed the party power be stretched into economic sectors and allowed the labor party monopolize the entire national system. Since then, when Kim Il Sung ordered something to factories or companies all around country, they just did that without presenting alternatives. It means a vertical economic management system was set up.
Kim Il Sung emphasized ‘Daean management system’ by saying “all leading labors should be determined 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 to severely damage 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 with 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.”
Since ‘Daean management system’ was carried out, 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 participate in the party committee and make decisions related to the company operation, but if the manager and the chief engineer are not cooperate with the party secretary, the party secretary who has the right of personnel management fired even the manager and the chief engineer by reason of they have lack of the party loyalty.
Chinese businessmen, “we will break off the business relations with North Korea”
The party secretaries know well about politics and scholastic matters, but they do not know much about the technical know-how and administrative affairs. When they have reports related to factory, they allow it if they like it and if not, they don’t allow it. This kind of management make a deadlock in economic activity and the factory shall be failed in the end. In this case, all blame goes to the manager, but the party secretary does not have any responsibility for it.
There is an episode that happened in Sinuiju cosmetic factory 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 the countries halted procession because the investment agreement from North Korean part was not clear. One day, a well known Chinese businessman suggested a joint work.
Both sides concluded a joint investment agreement and the Chinese businessman returned to China after he asked 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 he met another manager. He asked curiously “where is the manager?” and the other manager answered “he was promoted and sent to another place.”
He was confused, but he concluded a new joint investment with a new manager. The new manager promised him they will put special efforts to fulfill the requirements. When he returned to China, he got a call from another manager of the factory and he said “the manager (he concluded the new contract with) was promoted and moved to another place.”
He was so angry about it and shouted “Are you pulling my leg?”, “You are all swindlers.” and “No more work with your country.” He never returned to work with North Korea after then. The truth about previous two managers is that they did not get promoted and they were fired because of some minor mistakes which occurred in the course of the joint agreement. Once their 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, what you can expect is only 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. 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 fire him in the end. Participation of the party in the economic management does not supporting economic activities but hindering it.
That is why the party secretary became a hotbed of absurdity and corruption. Many only flatter around them. The party secretaries who are blinded to “gain profits” take bribes from their flatterers and their personal affairs are 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 their positions.
In the case of Gang Yoen Hee (pseudonym, 43, living in Inchoen, South Korea) who is a defector from Chongjin city of North Hamkyong province. Her father was the manager of Chongjin food factory. Her father was honest all the time and operated the factory in principle 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 a back market and made lots of money. He became so busy to secure materials traveling all around 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 affair with them. Her father criticized the secretary’s immoral behavior in a meeting. The secretary who held a grudge against her father made a false report about him which was submitted to the party. Her father was fired soon after.
“Do you know how difficult we were in the middle of 1990s? He was fired with nothing, but he tried to support the family. He passed away in the end.”
Gang Yoen Hee added, “North Korea is maintained by the party and it 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 for anything. Some managers who get sick and tired of secretaries’ such 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 conducts are immoral. Reformation and Liberalization are far off without solving this problem.
