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NORTH KOREA NEWSLETTER NO. 102 (April 15, 2010)
*** TOPIC OF THE WEEK (Part 1)

N. Korea's Parliament Handles Budget, Heralds No Major Policy Shift

SEOUL (Yonhap) -- North Korea held the annual meeting of its parliament on April 9 in the absence of leader Kim Jong-il, placing emphasis on economic affairs by passing an annual budget that is 6.3 percent larger than the previous year.

   It was unclear why Kim missed the meeting, which was scrutinized by observers for a hint into the socialist state's policy directives and organizational changes. The 68-year-old leader has skipped the annual meeting of the Supreme People's Assembly (SPA) every other year since 2004.

   Apart from economic issues, the second session of the 12th SPA, held at Pyongyang's Mansudae Assembly Hall, also passed a revision to several clauses in the country's Socialist Constitution, though none of the revisions were immediately revealed.

   Last year Kim attended the SPA session in April after being absent from public view for several months. At the time, Kim dragged his left foot slightly and his left hand barely moved when he raised both arms to applaud the audience. Kim reportedly suffered from a stroke in the summer of 2008.

   The 687-member assembly gives routine approval to Kim's decisions, ratifying an array of policy goals and approving pre-ordained Cabinet shake-ups. South Korea's Unification Ministry likened its opening session last year to the inauguration of a new government in other countries. The incumbent parliament was initiated in April last year one month after the country elected the deputies to the SPA.

   "The Cabinet will expand and develop foreign trade and conduct economic and technical cooperation with other countries in a bold and big manner," the (North) Korean Central News Agency (KCNA) quoted a senior North Korean representative as telling the session.

   Members of the assembly also pledged efforts to normalize production in light and agricultural industries while making an unspecified revision to the North Korean constitution, the KCNA said.

   North Korea outlined its goal to boost production of basic necessities and food in a joint editorial released on New Year's Day, suggesting the regime is trying to reassert state control of market activities.

   As part of its bid to curb a burgeoning merchant class, North Korea went ahead with a surprise currency reform late last year, but it backfired, worsening inflation and food shortages and triggering social unrest in some parts of the country, officials here say.

   The Cabinet "will strictly adhere to the socialist principles in economic guidance and management," the KCNA quoted Premier Kim Yong-il as saying. Kim stressed "principles of self-reliance and profitability." According to the report of Premier Kim, North Korea last year witnessed "a chain of eye-opening events, a proof of tremendous political, military and economic potential of the DPRK, and the translation of the people's ideals into realities for which they longed to see."

   The impoverished socialist state held its first session of the newly elected SPA last year, reappointing leader Kim Jong-il to another five-year term as head of the National Defense Commission, Pyongyang's highest seat of power.

   Strangely enough, however, there was no mention in the parliamentary report on its policy toward its rival South Korea and its Cold-war foe, the United States, at a time when relations between the two Koreas are at their lowest level since the inauguration of South Korea's Lee Myung-bak administration in early 2008.

   This year's session also came as North Korea remains reluctant to return to the stalled six-party talks on its nuclear weapons programs. Pyongyang says it will rejoin the aid-for-denuclearization talks only if Washington agrees to launch separate negotiations toward a peace treaty to formally close the 1950-53 Korean War and the United Nations lifts its sanctions on the country.

   On the same day of the SPA session, Pyongyang's foreign ministry simultaneously released a statement lashing out at the new U.S. nuclear policy, vowing to beef up its atomic arsenal.

   This year's SPA session also came as speculation among South Korean officials and analysts grows over a visit by the aging North Korean leader to China. Beijing hosts the stalled six-nation talks and has been a go-between for their resumption.

   The legislative meeting was closely watched for signs of a successor to Kim. The reclusive leader is widely believed to be grooming his third and youngest son, Jong-un, as heir to the communist dynasty, but the regime has not made any such announcement.

   According to news report, this year's assembly session discussed the following agenda items: 1. on the work of the DPRK Cabinet in 2009 and its tasks for this year; 2. on the results of the implementation of the DPRK state budget for last year and its state budget for 2010, 3. on the adoption of the ordinance of the DPRK Supreme People's Assembly on revising some provisions of the DPRK Socialist Constitution and 4. organizational matters.

   Deputy Kim Yong-il, premier of the Cabinet, in a report on the first agenda item said that last year the indomitable mental power of North Korean people and their production potential were fully displayed and, as a result, gross industrial output grew markedly from 2008.

   This year the Cabinet will boost production of consumer goods and grain by putting spurs to the development of light industry and agriculture and reenergizing overall production by prioritizing the production of electricity, coal, iron and steel, and railway transport, he said.

   "The Cabinet will expand and develop foreign trade and conduct economic and technical cooperation with other countries in a bold and big manner. It will strictly adhere to the socialist principles in economic guidance and management and settle all issues arising in economic management in a creative manner on the principles of self-reliance and profitability," he said.

   Deputy Pak Su-gil, vice premier of the Cabinet and minister of Finance, said in a report that last year's state budget revenue was 1.7 percent above previous estimates, while the state budgetary expenditure was implemented at 99.8 percent.
He noted that the plan for state budgetary revenue for this year is expected to increase 6.3 percent over last year while the plan for state budgetary expenditure is expected to grow 8.3 percent.

   The report gave no actual amounts for this year, but the North's revenue last year was estimated at 482.6 billion won (US$3.45 billion) and its defense budget was estimated at 76.25 billion won (US$545 million). There is no explanation, however, about the figures' relations to the North's currency redenomination conducted in November last year.

   According to the report, this year's plan for state revenue is expected to grow 6.3 per cent over last year. Profits from state enterprises, the main source of the state's revenue, is expected to rise 7.7 per cent from last year, while profits from cooperative organizations is expected to grow 4.2 per cent.

   This year's plan for state budgetary expenditure is expected to show an 8.3 per cent increase over last year. Spending for light industry is expected to go up 10.1 per cent, that for agriculture 9.4 per cent and that for metal, power and coal industries and railway transport 7.3 per cent as compared with last year.

   The state's defense budget, 15.8 per cent of the total state budget, is almost the same as last year. It is expected that a large amount of educational funds and stipends will be sent for the children of Koreans in Japan this year.

   In addition to the budget, the SPA session also acted on the reorganization of the parliament. Deputy Pyon Yong-rip was elected secretary general of the Presidium of the SPA to fill a vacancy.

  (END)