Economy of the DPRK

In a planned economy, the economy is controlled by the State to steadily improve living standards, whilst retaining a balance between accumulation and consumption. In practise, a national plan is drawn in unity with the leadership of the ruling party and relevant all organ and sections form a unified planning system under the guidance of the State Planning Commission. In this manner, the management activities of the factories and enterprises are closely combined with the development of the economy, which prevents imbalance and impulse in economic development, and enables the actual conditions of the economic sectors, regions and enterprises to be fulfilled.

Socialist ownership refers to the means and objects of production collectively owned by the working people. In this manner, working people are regarded as the real masters of production since they collectively own the tools and resources for production and reap the benefits of production through collective ownership.

There are two types of socialist ownership: all-people ownership and cooperative ownership. All-people ownership is ownership by all people and cooperative ownership is confined to those directly involved in the individual cooperative. Cooperative ownership is predominantly found in the agriculture sector of the economy, in which the products are distributed and used within the scope of the individual cooperative. Although, the DPRK governments plans to diminish cooperative ownership and eliminate the difference between the urban and rural areas through urbanising and technological developing agricultural production.

The DPRK endeavours to become a socialist economic giant. Specifically, the country aims to be built on independence and Juche character, with an emphasis on science and technology. The strategic policy of the WPK is to construct a self-supporting and knowledge-based economy, in which there are domestic production and supply, and reliance on science and technology development. As a result,  economic construction provides the people with affluent and cultured living conditions.

Heavy industries are considered as the foundation of socialist economic growth. Heavy industries, including extraction of coal and mineral deposits, electric power industry and processing industry, enable a self-reliant economy, in which raw materials and resources are locally sourced and produced. In this manner, heavy industries can render the development of light industry and rural economy. For example, raw materials extracted are utilised in the production of machinery and the development of machinery can fulfil the demands of modern machinery and technology in all sectors.

Extraction is a predominant sector in the DPRK. The DRPK is rich in mineral deposits, which are wide in variety and plentiful. In total, there are more a hundred varieties of minerals reported to be worth USD 3.7 trillion. Hence, the extraction of such minerals is granted priority over the processing sector, so that raw material and fuel bases such as coal, iron ore, gold, silver and so forth, can be increased.

The metallurgical industry is an important link to fulfil the domestic demand for metallic materials. Iron and steel production rely solely on domestic resources and fuel. Even though the DPRK lacks coking coal, which is utilised to produce iron, the DPRK has developed, through a Juche-based system, production of iron by connecting the rotary furnace to the oxygen-blast furnace.

At the core of the heavy industry is machinery production. Machinery production relies on technology advances and local raw materials. Its development is crucial to advance other economic sectors. Specifically, efforts are continuously in upgrading both heavy and light industry equipment such as machine tools, precisions machines, textile machines and means of transport including cars and trucks.

Agriculture is regarded as one of the major components of the national economy. As a socialist economy, cooperative farms are the foundation of agriculture. Crop cultivation is based on the Juche farming method created by Kim II Sung. The principle of Juche farming method involves sowing the seeds according to the most suited climate and soil of the country — in other words, ‘sowing the right crop in the right season, manure’ and attending high and stable yields through effective use of fields, water, farming and other means of production.

Agriculture is managed by the State through a national agricultural guidance system. A cooperative farm management committee is established in every county and a rural economy committee in every province to ensure industrial guidance in cooperative farms. Specifically, the county cooperative farm management committee provides onsite direction and guidance in the business operations of the cooperative farms and controls agro-technicians, farming machines stations, irrigation management stations and other State-owned enterprises.

The development of transportation in the DPRK is constructed in accordance with the national economic plan. Primarily, the transportation system consists of rail, road, water and air, although other systems such as cableways, conveyors and pipelines are introduced as low cost and environment-friendly modes.

The railway system is the predominant form of transportation in the DPRK. The railways are regarded as the arteries of the country and the backbone of transportation. Current developments in the modernisation of railway facilities and an introduction of high-speed rails have advanced the transportation of materials. Equally, there is an intricate network of motorways around the DPRK connecting the country.