communist studies and transit10n politics

THE JOURNAL OF

COMMUNIST STUDIES AND TRANSIT10N POLITICS Volume 19

WItarch 2003

Number l

がα′/SS″ α 助ご

Enterprise and Welfare Reform in Colmmunist Asia

ど冴ルで冴わv

PETER FERDINAND and MARTIN GAINSBOROUGH

A FRANK CASSJOURNAL

Fluctuating lnstitutions of Enterprise Managementin North Korea: Prospects for Local Enterprise Refor】 m

SUNG CHULL KIM

I ntr()duction 、tatc、ystclll、 OI｀thc cxistillどconllllullist party― Hy the lと卜t 、 ,North K()rcti is rcと、tr()1lgh()ld ()1｀ cclltrtilizcd cc()11011liC plを innill思. North K()rcti'、 idcologicょ￨ c()nllllitlllcnt t()cc()nolllic plを 11111111ど、 cd oll scll｀― rcliancc is llo lollど cr bとと C()11lpと 11。と iblc to thと it()1｀と iny othcl｀Asiをin C01unaunist systcnl in palヽticulを Vith ir.｀ thc dcとith()￨｀Mと、 ()とilld thc clld()1｀thc Cultulムと l Rcvolution、 tilc Chinc、 c 、 ictldcr、 hip tllldcr Dcllどメhaopi11ど t()OK thc lllolllCnt()と 1ヽdcci、loll to rclk)1‐ 11l thc 11l y・ ti・、 Cconく )11ly l｀ 1‐ C()に ()111 197思、とiHo、vlllど pcとと、と 1l tヽとヽ 1ld c()Hccti、 'c ェ Cprcllcur、 t()bccolllC Sigllll｀ ictint Pとと 1・ c1ltl・ tncr、11111と itiollと l dCVCl()plllcllt.11l thc ェ、 vと 11ld Cco1lollliC rcik)1‐ iRc ol｀ politictil を nl ill thc So、 'ict Uniく)11 と 11ld tllc rc nlと irktibic ccollollliCど 1‐ o、vth in Chillと l ill thc lllid-198()、 11lChCd iヒ ‐Victnalll lと ′ CliCヽ()F rclk)rnl p()licic、 tiヽ thと it kcPt thc、y、tclll、 iと ibic lk)lk)、 vill讐thc collを tp、 c ( ) n l l l l lにi1 ヽ 1 1 1 1 l t h c S o v i c t U in ni do 1 E1 aとs t c1ll‐E t(l)ip々 ( ) 1ビ｀ c . B y c o n t rぃt と‐ North Kol・ cと t hとい 111と illllと lillCd ll、lAiど id idc()logicと、 l c()11111lit11lcllt to l planllcd を ritin CC()11()11l vか｀ tilc clld ()1｀と tid l｀ r()11l it、 11lcr C()11111luniヽ llic、()11 lk)1・、 t と li tci｀ 111ヽ 11‐ ticLiltil'ly crudc()ilolll fl‐Chillと i nlld thc S()vict Uni()11、、pを prcli3rclltiと thc N()l‐ cと 1l CCOnollly bcどと in tO dCclinc ill thc 1990、. Thc cc()11011liC th K101・、 ctlitic、￨i｀ rcと ichcd とi critictti p()int ti、 11と、tcl・ dit｀ iturtil di、と、ヽhit grttill cr()p、 111 11lid― dccとidc. NIIcと vhilC とi 、cric、 ol｀cvellt、 in North K()1‐ cと )ti t i11、 1蜜 ht とibく t hを1ヽbi∼ ()に illcrclllcntttl ingc、 chと 11l thc、 lrc()￨｀ ti・ LiCtヒ thc cc()11()11lyヽ 11lcc thc llliddic()￨｀ thc 1980、 Tilc l)1‐ OdヒlCtioll drivc lk)1‐ coll、 LllllCr g()()d、と tCd by thc pl・c、cllt 、11litiを ictiticr Killl J()nど 1lncd 11、cnhanccd thc rolc()￨｀ thc Privatc 、cctor in thc pltと 1()11()￨｀ CC()11()11ly tilld c()ntl・ ibLitCd t()tilc cxpと 111、 thc 、cc()1ld Cco1lollly. Thc di、intcどrを iti()11()￨｀ thc S()vict Unlollと ind thc collとと、l Europctin P、c ol｀thC Eとと 1111ヽ C()111111に t、y、tclll、 ttCCCiCi｀と itcd thi、procc、、()￨｀ Chと、 llど ()11l bCl()、 v lll Nol・ th ct｀ 1・「子、 Kく)1・ごと t。Fhcll thc illll,ttCt Of lkillllllc ill thc lllid-1990、、と 1、、()C ilく )1・ 111()uヽ thtit it ctinlc t()、hと i(C tinc lllと 111l ciclllclltヽく)f thc pltillncd ぜビonollly. lt bi‐ ht ()Llど 'C11lC lltヽ lllとヽ1ヽC lll()ヽ 01｀popL11を )￨｀ iヽ lti()1〕 111 、 cと irch く￨｀ o()di ti tclllp()rと iry htilt t() )￨▲ lbliC cdにlCと tti011 tと ()ヽ 1()11()￨｀ヽヽ()ciょに lld hctilth ctlrci ぜ 1。 tllc 、1と i c()1ltrく ltC・ 1う

ENTERPRISE MANACEMENT IN NORTH KOREA

ll

particularly labour mobilizationi an incrcasc in burcaucratic dcviancc and crimes; a sharp declinc in days 、 vorkcd at statc― o、 vncd entcrpriscs; and, inally, cxpandcd opportunitics for illicit privatc entrcprcncurs and thcir black―markcteel・ ing.Thc rcccnt mcasures taken by thc authoritics,such as 、 vage increascs and pricc riscs,l recognizc and reflcct thesc dcvelopments that thc statc cannot control. Solllc observablc changcs havc occurrCd in thc operation of cntcrprises, as privatc cntrcprcncurial activitics emcrgc to cnhancc thc function of thc market.:Despitc the lack of statisticai ngurcs to comparc the value of output vccn public cnterpriscs(both Statc― bct、 vncd and collectivc)and priVatc o、 entrcprencurs, it sccms that the latter havc supplanted significant parts of thc forlllcr during thc cconolllic crisis.In particulal・ ,most consumcr goods v produced and providcd by thc pl・ arc no、 ivatc sector,In a scnse,thc privatc scctor has taken advalltagc of thc dcvastatcd public sector. A qucstion raiscd herc is ho、 v thc contradiction一 vccn a dcvelopmcnt bct、 strategy ccntrcd on state― o、 vncd cntcrpriscs and the lllicit privatc cntrcprcncurial activitics can 一 bc rcsolvcd, or 、 vhat the dircction of thc v lll be in coping、 transition、 vith such a contradictory situation.In an attcmpt to rcspond to this qucstion,this study cxalllincs the problel13 of the institution of cntcrprisc managcmcnt whcreby cntclpriscs had to undergo fluctuations in thcir institutional arrangcnlents. By `fluctuation' is mcant that thc arangcmcnts establishcd by the party― verc dislocatcd,on the onc hand, statc、 v phcnomcnon enlcrgcd in this fluid situation,on the othcr hand. and that a ne、 On thc basis of an analysis of institutional fluctuation,the study attcmpts to asscss the futLirC dircction of transition or cntcrprisc nlanagcmcnt, Thc author's vic、 v is that thc dircction of any change or transition is not silllply decided by chancc but supposedly has a `prefcrcntial corclation' with institutional traditions.Thc notion of prefcrcntial correlation is adopted 品‐ vly cmerging complcx systcms thcory, which posits that no onl thc nc、 changc can bc explained by mechanical dctcrnlinisnl or by purc randolllncss. This conception convcrgcs 、vith thc nc、 v institutionalislll's notion of historical depcndcnce or path dcpendcnce, although unlikc the latter thc forillcr gives、 veight to indctcrHlinacy in thc dircction of changc.R In this rcspcct, instcad of describing thc new phenolllcnon of private cntreprcncul'ship lll silllplc terllls of econonlic crisis,thc villstudy、 cxalllinc thc 、vays in 、vhich thc formal institutional traditions of entcrprisc lllanagcmcnt 、 vcrc dislocated by informal practices fronl thc 1960s to thc 1980s and、 vhcreby thc subscquent fluid situation opcncd a spacc for thc rill look ttit prolifcratioll of entrcprencurial activities in the 1 990s.Thcn itぃ the prospects for institutional transition ccntrcd on local cntcrpriscs,、 VhiCh has been clllbeddcd in North Korca's tl・ adition of regional sclf― rcliance, rather than predicting thc fatc of privatc cntrcprcncurship alonc.

12

ENTERPRISE AND WELFARE REFORM IN COMMUNIST ASIA

Enterprise mltanagement:Institutional Traditions and lDislocation

North Korea has attcmptcd to maintain dual o明 cctiVCS in cntcrprisc managcmcnt. Onc is obvlously to keep the enterprise、 v ithin the ambit of central planning,butthc othcr has bccn to grant a lilnitcd scnsc of autonomy to adlllinistrative units vork― and、places.During the perlod froln the 1960s to thc 1980s, thc authoritics sought to rcalizc lirnitcd local autonomy through such institutional arrangcmcnts as rcgional rchancc sclf― with local cntcrpriscs, indcpcndcnt accounting mcthods, and collcctivc dccislon― making in the party comlnittccs. Inasmuch as thc contcnt of thcse institutions of lllnited autonomy has changed,it is necessary to investigate the、vays in、 vhich thc formal norllls of thc institutions、 vcrc dislocatcd by informal practiccs. As 、vill bc discussed, of the three institutional rcliancc bascd on local enterprises has had thc arrangcmcnts rcglonal sclf― most lasting cffcct on thc transition of thc cconolllic systcm and plays a pivotal rolc in its continuation. l R 冴' α R 夕g ″ θ″αF S 切 ″C ビβαざ冴 οれとθc α′どれr ? 屯 β/ なござ A corc principle in North Korea is self― reliance, or `the Juche idea'. To asscss thc plausibility of this prcHllsc is bcyond thc scopc of this study,but it is true that the party― rcliancc,cvcn ifin a statc has institutlonalizcd sclf― lilllited sense,in local econolllic affairs sincc vhcn 1958,、 Kiln ll Sung irst launched the establishment of local entcrpriscs.A goal ofthis rcglonal sclf李 rcliancc is that each local unit should maintain the viability of its economic self― sufficicncy cvcn in momcnts of crisis. For this, thc statc not only disperscd and dividcd state― o、 vned entcrpriscs to provinces and counties but also urgcd county govcrnmcnts in particular to cstablish local cntcrpriscs to supply consumer goods within thcir jurisdictions. What should be noted is that rcgional sclf― rcliancc in North Korca atthat vas not samc as dccentralization in China's transitlon cconomy after tilnc、 1978.Whcrcas China has dcvolvcd po、 ver to local governments to initiatc liHlited lncasurcs in tradc and investlncntvell as、as thc budgeL finanCC and tax, North Korea has not sanctioned local governments to take such meaningful mcasurcs which nllght dcrall thc fundamcntals of ccntral planning.The only exccption is thc local govcrnmcnt's budgct to promotc local self― sufficicncy.It secms that North Korca's rcglonal sclf― rehance is silnllar to that of単生 ao's China,which aillled at dispcrsing industrial bases for sccurity purposes and to support rural industrial needs.4 Why was rcglonal sclf―rcliancc promotcd at thc cnd of thc 1950s and carly 1960s specincally?Iwo explanations are possible.One is related to thc consolldation of Kim 1l Sung's lnonolithic vcrin po、 thc party in thc rnid― 1950s,、vhich、vas no、 v ablc to grant local govcrnments a lilllited degree of

ENTERPRISE MANAGEMENT IN NORTH KOREA

13

autonomy and rcsponsibility in cconolllic affairs, Since thc vertical party hierarchy had bcen made strong cnough to penctrate evcry aspcct of North Korcan socicty, cach lcvcl of party organization could intcrvcnc in thc corresponding level of state adlninistrativc and econonlic units.Thercfore, it was a ncccssary conscqucncc that thc adoption of rcgional sclf― rcliancc took placc soon aicr Kim had cstablishcd his monopoly on party po、 ver. Another cxplanatlon is linked to North Korea's sccurity strategy.5 Reglonal scif― reliancc、 vas further emphasized in the lllidst of East― Wcst conflict in thc carly 1960si thc Cuban Hlissllc crisis and thc Amcrican i n t c r v c n t i o n i n V i c t n a m . T h c s u c c c s s o f MG tc tn oc r ― al Park Chung Hcc's coup in South Korea and Arnerican support for Park's Hlilitary regillle v fclt its sccurity aftcrwards should also bc notcd. North Korca no、 v policy of thc`parallcl dcvclopmcnt threatcncd,and thus it undcrtook a nc、 of thc economy and the lnllitary' at a plenary sesslon of the Central Committec of Korcan Workcrs'Party(KWP)in Deccmber 1962.This parallcl dcvelopmcnt policy rcinforced thc drivc for the establishmcnt of vords, small and mcdiulll―sizcd cntcrpriscs at thc county lcvcl. In othcr、 reglonal sclf― rchance bascd on local cntcrpriscs、vaS intcndcd to enhancc North Korca's sccurity. In institutionalizing rcglonal sclf― rcliancc,thc sizc of gcographical and adlllinistrative unit rnattered.Killl II Sung and his cldcst son Kinl Jong 11, 、 vho later succeedcd hiln,rcgarded thc county as thc optilnal size of unit for r cliance.For thenl,a province、vas too big,、 sclf― vhile a r,一a county sub― unit comparablc to thc collllllune in巾 Tao's(Ehina― was too small for scl← sufficicncy.6 1n tcrms of numbcr of units also,thc county nlight bc thc most appropriatc for thc ccntral state to deal、 vith.Thc ninc provinces wcrc too fc、 v in numbcr, 、 vhcrcas thc r,, as an adlllinistrativc unit, cxcccdcd morc than 1000 in numbcr.The 209 counties、 verc optilnalin numbcr not only in that they retlccted reglonal characteristics but also that thcy could be managcd by thc central state. Ittcre the county levcl refcrs not only to countics in rural arcas but also to most average urban cities and the districts of such m巧 or CitiCs as Pyongyang and Nampo.Kim Jong 1l particularly cmphasizcd the county as a self―sufficient unit. In his college graduation hc Status and Rolc of thc County in Bullding thcsis of 1964, cntitlcd 「す Socialislll',he dcscribcd the county as a strategic nodal point that connects urban and rural areas as、 v ell as intcgrating econolllic and lnllitary goals in the facc of the continuing confrontation bct、 vcen North and South Korea.7 1t is notablc that Killn's thcsis、 vas widely publicized in thc lllid-1980s whcn somc important cconomic attustmcnt mcasurcs wcrc takcn,拘

r

exampic thc drivc for production of consumer goods, the introduction of indcpcndcnt accounting mcthods in cntcttrisc managcmcnt,and sprcad of entettriseS・

14

ENTERPRISE ANDヽ

ア ELFARE REFORM IN COMMUNIST ASIA

rcliancc has What should bc rcmarked is that sillcc 1973 reglonal sclf― bccn practiscd through local budgcts on thc basis of contributions from local entcrpriscs.Local govcrnmcnts,、vhich had rclicd solcly on statc subsidics, now had to plan thcir o、vn budget mostly 、vith the revenucs fronl local t hc local budgct enterprises.According to the North Korean intcrprctationぅ is a nscal systcm undcr 、 vhich a local govcrnmcnt maintains its own cconomy taking particular account of local charactcristics' undcr the supcrvislon of thc state.In dctall,thc incomc consists of salcs tax,incomc tax, land― use tax, profit, contributions fronl local cntcrpriscs and ad hoc incomes. It is spent not only on local govcrnmcnt adHlinistration, local COHllnCrCC and agricultural managcmcnt but also on the building and maintaining of child― care centrcs,kindcrgartcns,librarics,hcalth clinics and vaS intended to rcducc thc so on.X It is evidcnt that thc local budgct systcIIl、 statc's iscal burdcn,' For thc supply of consumer goods for local residcnts,thc rolc of local enterprises has becn extremely signticant as thcir products rangc frolll dally vcar,furniturc,school supplies necessitics to food processing,tcxtilcs,foot、 timc and some machincry. Thcy oicn cmploy 30 to 40 people as part― 、 vorkers or rural farlllers during thc slack scason. Thcn, local enterprises ′ ith thc launch ofthc August 3rd Production Drivc for cntcrcd a ncw phasc、内 Consumcr(3oods in thc rlid-1980s to increase the production and supply of consumcr goods.This campaign ailned at recycling discardcd and surplus matcrials from nearby manufacturing enterprises.It irst attractcd attcntion v hich in Kinl Jong 11's speech on the so― callcd Light lndustry Rcvolutlon,、、 vas delivcrcd to thc Ccntral(3oHlIIlittcc of thc party in February 1984. While Kim did not mean a shifit in industrial policy from hcavy to llght industry,hc mcntioncd that thc dcmands of thc pcoplc had changed in thc vl long pcriod of dcvelopmcnt undcr socialism.He stated thatÌfthc ricc bo、 rcmains cmpty, pcoplc 、 vill not believe in thc supcriority of socialist ￨()It is notabic again that thc production institutions and socialist patrlotism.ラ drivc stipulated that consumcr goods should bc manufacturcd and consumed、 vithin a local adlllinistrativc unit,csscntially thc county level. Thc contrasting fate of the local entcrpriscs and thc August 3rd ving ngurest local entcrpriscs Production Drivc can bc sho、vn by thc follo、 mushroomcd at thc cnd of thc 1950s一 some 2,000 1ocal cntcrpriscs wcre cstablishcd in 1958 and 1959;thc numbcrincreascd to about 3,600 in 1980, but aicr、vards thc cxpanslon slo、ved down, to sho、 v about 4,000 1ocal enterprises in 1994.Considering that thc food crisis fronl the Hlld-1990s allllost paralyscd thc opcration of cntcrpriscs in gcncral,it can be assumcd that thcse local enterprises arev no、 functioning only rninilnally.By contrast, thc、vork tcams of thc August 3rd Production Drive have outnumbcrcd by vork tcams far thc local cntcrpriscs since its launch in 1 984.Thc numbcr of、


15

reachcd 46,500 in the dccadc 1984-94, and output increascd 3.5 timcs during the samc pcriod.￨ It、vas no coincidcncc that thc shift parallclcd the dctcrioration of thc official cconomy and the risc ofthe sccond econol■ y that startcd in thc Hlld― 1980s. In othcr words, it reflcctcd thc fact that the private― orientcd and prontablc small work teams of the production drive gradually supplantcd the rolc of public― oricntcd and local cnterpriscs.As a rcsLllt,thc production drivc canle to supply lnost consumCr goods as thc official economy declined in thc 1990s. Ho、vevcr, the basic norm of reglonal self― rcliance inostly rcmains intact,regardlcss ofthc shill from local cntcrprisc to the production vith consumcr goods.This is a siglllicant drivc in providing local rcsidents、 factor for thc direction of changc in econonlic affairs in gcncral. /ッr″冴マハア ″gαrθ ?rAcごθrr,2r'72g でァ βク?〃 lt is wcll known that in North Korcan as in 3oriller communist systcms,the Statc Planning ComHlittee is thc locus of ccntral planning in practicc, although thc party donlinatcs and guidcs the national dcvclopmcnt stratcgy. principlc is tunified and detallcd planning'. Thc conllllittcc's vorking 、 vas cmphasizcd by Kiln II Sung in 1964.While thc 、 vhose ll■ plcmentation、 making at the Dacan Model rcprcsents thc institution of collcctive dccision― CntCttrisc lCVCl,as l shall discuss iater, thc unincd and dctallcd planning vs bct、 rulc in thcory rnaps out aH the lo、 f‐of esscntial rcsources not only veen statc and state―o、 vncd enterpriscs and but also among statc―

vned o、

cnterpriscs, On thc onc hand, ùnificd planning' mcans that thc statc planning corlrnittcc and its reglonal colllrnittccs have thc responsibility of drafting thc production quota that each cntcrprisc should fulfil;on thc othcr, `detailcd planning'implics that thc conl,littcc takes a rninute intcrcst in thc planning proccdure. unined and dctailcd planning ailtlns at an equilibriuill ween bcい supply and demand, as wcll as thc cffectivcncss of rcsourcc mobilization, CXCILlding thc possibility of llllbalancc by conccntrating the supply of certain products,Ho、 vevcr,such planning has ncver succcedcd in achieving cquilibriulll or effcctivencss. It has bccn ilnpossiblc for the state to harlllonizc all thc flows of rcsourccs alrcady nuinbering nlore than 100,000 itcms by thc I11ld-1960s,! Furthcrmorc, chronic bchaviour pattcrns of burcaucrats,such as falsc rcporting of production capacity and output,along 、 vith iinpropcr hoarding of ra、 v matcrials, has illlpcded propcr irnplcillcntation of thc Llnittcd and dctailed tabulation of thc statc's econonlic plan. ùnificd and In fact,thc Nol‐ th Korean vcrslon of ccntralizcd planning一 detallcd planning' 一was a fallure. It could not achicvc thc origillal state OttCCtiVC Of thorough control of thc cconolmy;moreovcr,it偽 llcd to

16


encouragc productivity incrcases in statc― owned cnterpriscs.This led North Korea to lntroduce cxtcnslvc indCpcndcnt accounting mcthods in statc― owned cntcrpriscs in thc inid-1980s,in order to providc theIIl with a ccrtain degrcc of inancial discrction in gencral, and to incrcase productivity through material inccntivcs for workcrs and managcrs in particular.At an extcnded Politburo inecting in Fcbruary 1973, Killl 1l Sung stressed thc ilnportancc of thc introduction of this institution as a fcature of enterprisc managcmcnt,lS Butit、vas not actually institutionalizcd until Deccmbcr 1984 when thc KWP adoptcd a nc、

v rcgulation at thc party mccting, strcssing

nation― 、 vide dissclllination of thc callcd so― nlanagerial revolution.14 1t should be noted that thc illlplcmentation of thc indcpcndent accounting mcthod 、 vas accompanicd by thc cstablishment of associated entcrpriscs, that is conglomeratcs of scvcral siFnllar or complcmentary entcrpriscs. Associatcd cntcrpriscs,vhich 、 had alrcady bccn mcntioned in the mid-1970s,sprcad rapidly throughout thc countryjust atter Kim 1l Sung vide adoption of had dclivercd a spcech in November 1984,lS Thc nation― 、 independent accounting mcthods and thc cstablishment of associated vas not a coincidencc, givcn that rclativc independcnce of entcrprises 、 cconomic units is ncccssary for thc activation of a certain dcgrcc of managerial discrction.Thc indcpcndent accounting incthod prcvalled in thc associatcd cnterpriscs 、 vhosc managing officc 町 light provide thcir clicnt entcrprises、vith ra、 v matcrials through cither dircct contraCt purchase frolll othcr associatcd cntcrpriscs or procurcmcnt frolll the statc. Thc indepcndent accounting mcthod has yieldcd fe、 v rcsults,ho、vcver. Thcrc are a ntlmbcr of reasons for this.First,thc institutional autonomy of vas scvcrcly linlited under thc collllllunist econol■ associatcd entcrprises、 1lc formula governcd by ccntralism in gcneral, and unified and dctalled vas cssentially contrary to thc planning in particular.16 This real situation、 hteral mcaning of indcpcndcnt accounting mcthods. Indcpcndcncc in accounting cxisted so long as it was compatiblc 、 vith thc statc planning vas allo、 vcd only覇 ′ ithin comlllittce's guidelincs and,nlore llllportantly,it、 thc boundaries ofinstructions from Kim 1l Sung and Kirn Jong 11. v lllatenals from othcr associated For instancc,contract purchases of ra、 entcrpriscs rarely nlet nccds in full, in so ftt as thc contract itself vas 、 circumscribcd by thc principle of unittcd and dctallcd planningo Sccond, vhile llcglecting

cntcrprises 、 vcre forced to achicve productlon goals 、

substantivc illlprovcmcnts in productivity, bccausc thcir pcrformance 、vas judgcd according to the amount that they produccd. Thcy paid attcntion neithcr to thc qualitative illlprovcnlcnt of their products nor to thc reduction of costs. FuAhcrmorc, cnterpttses frcqucntly conccalcd thcir potential and undcrcstimatcd production capability in order to case thcir efforts to reach targcts in thc futurc, Third, attcmpts to providc incentivcs for hが d work


17

through bonuscs,prizes and grants wcre frcquently impcded by the scarcity of inputs, for cxamplc shortagcs of energy and rcduced supplies of raw matcttals,17()ivcn this situation, itvas 、 unthinkablc for managers to givc vaAous incentives to workers, As a rcsult, the mcre adoption of thc indepcndcnt accounting method did not pay or sincc it was not accompanicd by rcal fiscal and managchal autonomy for the associatcd entcrphscs. In surll,thc institutional arrangcments for thc incrcasc in productivity through indcpendent accounting mcthods distortcd thc intcnded ottectiVes. Formally spcaking,managers in thc associated cnterprises should havc had room to attuSt SOmc opcrations ttr thc workcrs in order to cnhancc work,In practicc,most ofthc cnterpriscs remained state― inccntivcs for hardヽ vncd, so that the accounting mcthod 、 vas employed only 、 vithin thc o、 vords,thc adoption of restrictions of unificd and dctailed planning.In othcr、 thc indcpcndcnt accounting mcthod has had no impact on reforms of thc burcaucratic control mcchanisms, 、 vhich is onc of the most ilmportant fcaturcs of rcform in communist systcms.lX Furthermore,it was vitiatcd by the cconomy of shortagc. P6J/r!ッ Dθ″ ヶ α′ ,,″ ,cでwlir力 θ″r R2現″θ″ざ,bliF,伊 The institutional foundation of dccislon― making in the cnterprise has bccn the party comIIlittcc undcr the Daean Model, namcd attcr thc Dacan Electrical Factory、 vhcrc Kinn 1l Sung made an òn―the― spot instructlon'in Deccmbcr 1961. Whilc thc Chongsanri 巾 Icthod, 、 vhich 、 vas iaunchcd in Fcbruary 1960, 、vas applicd to thc managcmcnt of collective farms, thc Dacan 障 lodel has excnlplined c。 1lective managcment of factorics and entcttriscS in other industrial scctors,The Dacan iVlodcl emphasizcs the rolc of thc party corllnittcc of each entcrprisc in the planning and prodLiCtiOn lllaking body,not proccsscs.In thC party comrnittec as a collectivc dccislon― only the managcr and thc party sccretary but also the chief tcchnician and othcr、vorkcrs arc includcd. It is officially said that thc establishmcnt of thc Dacan NItodelvas 、 intendcd to realizc thc`mass line'in econonlic managcmcnt.According to vas designed to tap the 、 Killl 1l Sung, it、 vorkcrs' wisdom and creativity through broad participation.19 Howcver, the Daean Modcl ccntred on thc party corlllnittcc camc from thc top leadcrship's rccognitlon of thc linlitations of thc prcvious managemcnt model, namcly the managcrial rcsponsibility model,in thc nc、 v industrial environment.Atthc beginning of vas no longer cffective in the 1960s,thc managcrial rcsponsibility ilaodel、 the rapidly growing industrial cnvironment 、 vhcre morc divcrsificd managemcnttcchniqucs and skllls、 vcrc nccded than bcfore and in、 vhich thc managcr's scope for initiativc and arbitrarincss in cntcrprisc managemcnt ) should be clinlinated.よ

18

ENTERPRISE ANDヽ Thc prcvlous manager―

VELFARE REFORM IN COMMUNIST ASIA

centred model had bccn incvitablc at an carly

stagc of coHllnunisHl, particularly in the pcriod of post― Korcan War rehabilitation and industrialization,for thc s、 vift implcmentation of central planning,That is,thc managcrial responsibility modcl had bccn cffcctivc during thc consistcnt push for rapid growth of heavy industry.21 With dccpcning industrialization, ho、 vcvcr, North Korca no、 v nccdcd a stablc modcl of cntcrprise management,and thc ans、 vcr、vas a collcctivc modcl of managcmcnt bascd on the party collllnittce.Thc Dacan障 lodcl providcd thc vith morc prolllinent status than any othcr comlllittcc party sccrctary 、 member, giving hilll or hcr thc rolc of supcrvisor to chcck the ovcrall operation of thc cntcrprisc from thc party's vic、 vpoint. Thcre 、vas also a political rcason for thc establishment of the Daean W質odcl in thc carly 1960s:inasmuch as thc modcl assigncd a prcdonlinant rolc to thc party,thcre、vas a closc rclationship bct、 vccn thc prcstigc of thc KWP and thc adoption ofthc Dacan Modcl's party collllllittcc.As soon as scvere factional strifc 、 vithin the clite 、 vas terHlinatcd 、vith thc purgc of scvcral senior party figures at thc August lncidcnt in 1956, Kirn ll Sung irnposed hiFnSClf on thc partye Sincc thc party、vas thc source of po、vcr and nc、v policies,his victory ovcr rivals lnadc hirn thc unchallcngeable leader in North Korca.Not only could hc cxercisc po、 vcr in pcrsonncl affairs but also irnplcmcnt his policy prcference for hcavy industry.22 Furthcrmorcぅ having thc conddence of thc lcadcrship of thc party,Killl succcssfully consolldatcd various icvels of thc party hicrarchy frolll thc ccntrc to thc provinces,citics or countics,and cclls at the bottolll as、 vell as in lllilitary and policc units.Furtherlllore,he installcd a horizontal、 vcb of party organizatlons,cspccially through party corllllittces at every level of political and social units. Once its vertical and horizontal nctworks 、 vcrc estabhshcd,thc party had the capacity to control cvcry aspcct of socicty. Givcn this situation, Kinn no、 v camc to institutionalizc thc party COlllinittec in evcry unit,consolldating the tparty's guidancc',to usc North Korcaうs official term. For instancc,thc institution of thc party collllllittec 、 vas introduced in thc rnilitary as soon as Kirn 1l Sung raiscd thc issuc ofthc party's political status in thc North Korcan arlllcd forccs in Fcbruary 1 958.2‐ Likcwisc, it was natural that the Dacan Wlodcl of party colllIIlittCC was adoptcd for thc party's guidancc on cntcrprisc managcmcnt and its supcrvislon on thc production proccss,prohibiting any individual,、

vhcthcr manager or party sccrctary,fronl cxcrcising arbitrary po、 vcr. Thc party colallnittec's rolc in thc cntcrprisc had a problem frorll the beginning.Collcctivc dccislon― IIlaking in the party collllllittee、 vas unablc to inducc active participation of managcrial staff and 、 vorkcrs. The rulc of collcctivity in thc party coHlrnittec,in principle,llnplicd that cvcry nlcllabcr of the conllllittcc should cqually participate in and bc collcctivcly


19

rcsponsible for the planning, production and daily opcration of thcilム entCttrise・ In reality, ho、 vevcl・ , the party's guidance ovcrrode thc rulc of collcctive dccisioll making.Thc party sccretary and cadrcs havc prevailcd in thc dccision-lllaking process.24 BeCausc of thcir privilcged status in chargc of pcrsonncl affairs and ideological cducation,thcy assumed morc v hile not having forlllal rcsponsibility. po、ver than othcrs,、 In this rcspcct, thc rule of collcctivity in thc Dacan W質 o dcl blLirCd responsibility rcgarding the opcration of the cntcrprise, sirnply providing thc party cadrcs 、 vith privilcgcs.ES For example, nobody has bccn spccincaHy blamcd for not fulnlling a productlon quota assigncd by thc statc. In practicc、 it has been irnpossibic for thc party colllinittcc to handlc varlous typcs of mcetings cffectivcly. Lct mc givc all cxanlple. In the Vith a party colllllllittce containing 30-40 pcople,it associatcd cntcttriseS,｀ is hardly inlagillable that any rational agrcclllcnt dlrough full discusslon can bc rcached. Thc paI‐ ty sccrctary presidcs over thc various pcriodic lllcetingsi、 veckly, monthly,quarterly and annual,and spccial conferenccs.His or hcr associate cadrcs, spccializlllg in organization and propaganda mattcrs, prcparc thc mcctings. Beforchand they obtain rcsourccs and matcrials and put thcm togethcr to dcvclop into doculllcnts and rcports: solllc of thCm quotc Kllll Jollg 11's instructions and thc ccntral party・ s guidclines,and othcrs rcflcct thc cntcrprisc's production goal and capacity.As a conscqucncc,thc party C011linittcc mccting frcqucntly cnds up as a ritualo Othcr、 vise,it dcals、 vith organizational issucs that arc neccssarily accolllpaniCd by criticisIIl and sclf― criticism,putting aH thc participants i1lto a gloomy and tensc rnood.26 For thc dally illanagcmcnt of thc cnterprisc, thcrc cxists an exccutive party conllalittce as a rcduccd forlll of thc party coIIllllittCe. Evcn though this ranking managcrial personnel with opportunitics to dcivc providcs thc high― into dctails. thc party sccretary still kccps his prcstiglous position lll thc dccislon-11laklllg proccss. ThiS rcflects thc atnlosphcrc of North Korcan society that has bccn controllcd by thc party hicrarchy. ミも sunl up,tllc collcctive dccislon-lllaking of thc Dacan Wlodcl'stypal‐ comlllittcc cnhanccd the party's doHlinancc over thc 、vork―placc, 、 vhile leaving thc rcsponsibility blurrcd.As thc party sccretary and cadrcs prevallcd on F10St affairs oli thc cntcrprisc, thc institution of collcctivc dccision― l1laking rathcr hampcrcd thc cfficicnt opcration of thc cntcrpriscs. It lo、 vcred thcir productivity by fuslllg political and organizationa1 11lattcrs (ご、 vith cconolllic affairs。 onscqucntly, as thc authority of thc pと lrty's in thc 1990s, the party gLlidance of the econonly signittcalltlyvcakencd 、 sccretary and cadrcs conccntratcd silllply on social order and stability.

20

ENTERPRISE AND WELFARE REFORNllN COMMUNIST ASIA

Institutional Fluctuation and the Spread of Entrepreneurship During thc cconoHlic crisis in thc 1990s,the spread of privatc cntrcpreneurs 、 vas a distinctivc phcnomcnon.What should bc notcd is that this may bc attributcd to increased local initiativc and,in turn,to thc dislocation of thc institutions of entcrprisc managcmcnt.T]irst,thc mcaning of reglonal sclf― vas transmutcd into thc scnsc that each reliancc bascd on local cnterpriscs、 vith indepcndcntly mobilizcd resourccse Sccond,the county has to survivc、 indepcndcnt accounting method,in a gcnuinc sense,began to cmcrge,as cach cntcrprisc has to continuc at lcast to actualizcvclfarc thc、 function for its workers by promoting profit―

sceking activitics. Third, thc party

comIIlittcc of thc cnterprise in gcncral and thc party secrctary and cadres in vcr only for the purposc of social control,as particular silnply cxcrciscd po、 irs bccamc scverely erodcd.Cttvcn the party's authority ovcr econolllic 色a賦 this situation, thc local authorities' frccdom of manocuvrc incrcascd to a vas not backcd by lcgal powcr.Thc local signincant dcgrcc,cven though it、 authoritics camc to allow privatc cntrcprcneurial activitics,bclicving that vclfarc of the residcnts. thcsc rlight contributc to thc food sccurity and thc、

ア rgれ /s rがで ″r"ご αrFθ 々ザど77rttβ で ″ Thc numbcr of peoplc involvcd in thc private entreprcncurial activities has 7 1neaning bccn cstimated by a South Korcan scholar at 700,000-800,000ガ that approxilllately onc in thirty pcople arc privatc cntrcpreneurs of somc kind. A gcncral trcnd in North Korca today is that the scopc of cntreprcncurial activities is incrcasing,11lcgal and illicit activitics gct tacit approval fron■local govcrnmcnts, the varicty of products becomes morc diverse than bcforc, and thesc activitics rangc from simplc tradc and vcll as public resources. cxchangc to production making usc of private as、 What is the background of thc private cntrcprcncurs? Whcre do thcy comc from? Thcy developcd business skllls beforc thc cconoHlic crisis broke out. Thc origin of privatc entreprencurs may go back to thc Hlld― 1980s、whcn North Korca launched the August 3rd Production Drivc.Even though most lllanufacturing and distributive activitics undcr the production drive wcrc supcrviscd by local govcrnmcnts,somc profit―sccking practices startcd boollling in the distributlon scctor in particular. Farmcrs' markcts wcrc opcned more frcqucntly and 、 vidcr than bcforc. This cncouragcd 11-time jobs and cntrcpreneurial practiccse Somc workcrs even quit thcir的 changcd into cntrcprcncurs rnoving froIIl one farlllcrs'Inarket to anothcro So long as thc strict idcological tcndency of dcnouncing individualism and sceking still prcvallcd at that time, thcir cntrepreneurial activitics profit― rcmained vuincrablc to criticisnl frolll ncighbours. Ho、vcvcr,thc wind of refornl from China cncouraged thc gradual spread

９々

巳NTERPRISE MANAGEMENT IN NORTH KOREA

of cntreprcncurship.With thc maturing fruits of rcform policics,、vaves of Chincsc pcdlars of Korcan origin bcgan to cross thc North Korean bordcr, taking advantage of thc opportunity to visit relatives、 vho rcmained there. Thcy tradcd Chincsc consumcr goods such as shoes,clothcs and food for North Korcan indigcnous ishery or agricultural products. Thcy carncd vicc Or somctilnes tcn or evcn 20 tilncs thcir costs from thc tradc.2ぷ profits t、 It is ccrtain that thc Chinesc pcdlars introduccd not only Chinesc prOducts but also the gro、ving profit… sccking cntreprencurial attitudcs froln China into thc lllinds of peoplc in a still secretivc socicty. Thc cxtremc ccononlic hardship in thc 1990sぅ and cspccially the food crisis in thc lnid-1990s, contributcd to thc burgconing of private cntreprcneurs in North Korea.Those、 Ⅳho cuitivatcd profit― secking practices in thc sccond half of thc 1980s sharpencd their cntreprcncurial skllls during the cconOHlic crisis in thc follo、 ving dccadct This is particularly truc of those involved morc in collllnerCial practiccs such as distribution, rathcr than thosc in productivc activities. Wlcan、vhilc,many of thc prOduction sidc cntrcprcncurs arc supposedly from local entcrpriscs that have manufacturcd consumcr goods.Sincc most ofthc small and mcdium― sizc local cnterpttses stoppcd thcir operatlons just as large statc― owncd entcrprises did,craftsmen in the local cnterprises havc had a chancc to syphon off facilitics and materials vncd o、 by thcir work― vords,they can casily extract labour,technology,facllitics placc. In othcr、 and matcrials from thcir entcrprises to produce such itcms as shoes, furniturc and alcohol to obtain more profit in thc markct.2り It can be prcsumed that thosc in thc local `collective' cntcrpriscs, in vncd enterprises o、 particular,may havc more advantages than thc local state― for transforHling the productive capacitics into profit― maxirnizing oncs. Whilc playing the rolc of、 vclfare provider for their fcllo、 v workers,sklllcd 、 vorkcrs in local entcrprises can easily get consent froHl managers and 、 vorkcrs to mobilizc thc rcsourccs of thcir entcrprises. Thcy can becomc vell as in privatc entrcprencurs in thc sensc of thcir sourcc of income as、 terms of thetr rnotivc,even though thcre is no gencral rule of profit― sharing bct、 veen thcir entcrprises and thcmselves. Thosc、 vith cxperiencc and skllls arc not thc only pcrsons cngaging in secking activities,There arc also ordillary workersぅ housc、vivcs and profit― cvcn childrcn.As many statc―o恥′ ncd cntcrprises had neithcr the capacity to CrTRp10y thenl fully nor the budgct to pay thcir cmployees in full,bccausc of scant state subsidy as wcll as thc shortagc of cncrgy and rcsources,、 vorkerS 、 vcre driven to go out in search of pcrsonal carnings. Also,thc halting of food rations,particularly in urban arcas,during the food crisis forccd peoplc to cngage in colllinCrCial activities so as to obtain food and consumcr goods.

It is notablc that journeying for food was accompanied by an increas population mobility betwecn the rcglons.H)

22

ENTERPRISE ANDヽ

VELFARE RE「ORM IN COMMUNIST ASIA

Bcfore the food crisis and thc fallline that vcd,thc follo、 North Korcan authoritics had managcd to lllnit inovcnlcnt through rcsidential restriction; the food crisis pushed thcnl to perlllit local residcnts to travel around to obtain food and daily nccessitics.Many visitors to North Korca at that tilnc vas full 、 vitnesscd that public transport, especially trains, 、 of passengcrs vholll verc 、 pcrched on top of thc train or travelling for food, sonlc of、 vs.1l A signincantimplication of these movcmcnts of vindo、 hanging out of、 population is that thcy havc cncouraged privatc cntreprelleurialislll, nulll母ing the Ottciが slogan that champloned thc p五 nciple ofònc for thc vcre looking collectivity and the collcctivity for one'.Whilc lllost travcllcrs、 s ccking vn fanllly, othcrs verc 、 nlotivatcd by profit― for food for their o、 entreprcncurship. Entreprcncurial activitics dcaling vith 、 grain products and consumer goods now prollfcratc in icgal and illcgal forllls,Somc run their busincsscs vork place,、vhilc others in thc market by utilizing the lcgal titles of thctr、 ving proper procedurcs.A vithout follo、 s ccking activities、 engagc in profit― vith lcgality on thcir sidc may takc vecn thcnn is that those、 diliferencc bct、 lcss profit from thcir earning than lllcgal cntrcprcncurs do.This is so partly bccause thc formcr havc to pay morc in nolllinal fees and taxes to the local govcrnnlcnt than thc latter givc as kickbacks to the party sccrctary and cadrcs or to local governmcnt officials, and partly also bccausc thc commcrcial practicc of thc legals docs not gLiarantcc higher profits than thc vords. 11lcgal cntrcprcncurial black markctecring of thc lllcgals,In othcr、 v ith lcgal activity involvcs morc risks but brings morc proit than thosc 、 vcver,both typcs of privatc cntrcprcncurs titlc.Rcgardlcss of the legality,ho、 vith protcction fronl thc party and local arc conllnon, able to survivc 、 ]Without that,privatc entreprcncul・ s could not put the pront、 govcrnment.｀、 vhcthcr small or largc,into thcirvno、pockcts. Onc distinctive rcccnt trcnd is that sollle cntrcprcncurs comc to rt11l thcir vn cntcttriSCS publicly.Thc typc of private entcttrisc Varics,ranging from o、 fishery to transport and tradc.A privatc cntcttrisc is distinguishable from an entrcpreneur rncntioned abovci thc latter hcavily relics upon thc rcsourccs of such as a local cntcrprisc, 11l producillg his or hcr affiliated vorkplace, 、 ixcd assct,capital and vhercas thc former uscs itsvno、 products and scrviccs,、 v hcthcr their nonlinal owncr is thc statc or local govcrnmcnt. v matcrials,、 ra、 In fact,thc type of p14ivatc cnterprisc cmcrging in North Korea is vcry silllilar vorkcrs,cvcn though thc North to a Chincsc onc that cnlploys eight to tcn、 thcm legal status.FS ities do not officially va1lo、 Korean authol‐

?rttr,次劣7ビ ″パん" ♂ wαメybrど′ ,“rざ α′とで F"ごご〃とθご The sprcad of privatc cntreprcneurial activities in North Korea cannot bc truc cxplaincd in tcrms of burcaucratic corruption alone,evcn though it i、

今ん


that illicit burcaucratic bchavlour has incrcascd sincc the sccond half of the 1980s.Bureaucratic corruption takcs placcヽ w ithin the domain of a centrally planncd cconomys croding the capacity and lcgitilllacy of thc rcgillle. In contrast, thc proliferation of private entrcpreneurs challcngcs the institutional foundation of the corllnunist cconomy. Evcn 、 vhcrc cntrepreneurial activities arc tacitly approvcd by 80VCrnmcntal officials and rcgardcd as non― crirninal,they arc by and largc associated、 vith thc sptrit of vhich a lnarkct cconollly,such as productivity,competitlon,and cfficicncy,、 produccs mounting prcssure for change on thc central cconolllic planning institutlons. Then ho、v can the sprcad of privatc cntrcprcllcurs bc explaincd?The increased local lec、 v ay of manoeuvrc in thc 1990s favourcd thcnl. This mcant that follo、 v illg thc basic institutional llorill of reglonal rcliancc, scif― the county should kccp its rcsponsibility for sustaining the day― to― day lilic of local rcsidcnts. Thisvas 、 truc evcn bcforc thc faminc causcd by thrcc consecutive ycars of natural disastcr froll1 1995 to 1997. Thc incrcasc lll local latitudc vas 、 ignitcd by a spccch that Killa Jong ll dclivercd to thc Ccntral Comillittce membcrs ofthe KWP in Octobcr 1994: Itis vcry illlportant to fostcr the creativc role oflocal governments and v matcrials and othcr local rcsourccs in ordcr to solvc to moblllze ra、 thc problclll of basic living standards,llllplcnlcnting fully thc party's rcvolutionary cconolllic stratcgy, In particular, it is nccessary to cnhancc thc rolc of the county in inlproving pcoplc's daily llfe, v ing thc prillciplc of sclf― follo、 reliancc.Thc county is a local nodal poillt ill building socialism, and it is an adnlinistrativc unit taking chargc of 1/200 ofthe wholc country….Whcn thc status ofthe county wcll explored,cven dcveloplllent is cnhanccd and local resourccs are、 ofthc country and rapid socialist devclopmcnt can be achicvcd.Sキ This statement is lllore than a silllplc rciteration of rcgional sclf―at reliance the county lcvcl.C}ivcn that thc distributioll rncchanisnl for consumcr gOods vas in disarray,thc county govcrnmcnt has to lllake a dcsperatc eミ、もrt for sclttsufficicncy of the pcoplc under its jurisdiction. Thc freedoFl1 0f nlanoctlvre of local govcrnmcnt sigllificantly increascd 1990s、vhcn the scvcrc cconolnic deterioration including the food in thc rnid… crisis and illlinc fを forced thc top authoritics to rely upon morc regional self― sufficicncy than bcforc. In othcr 、 vords, thc cmcrgcncc of privatc Vas duc to the changc in thc rclations vcen bct、thc ccntrc and cnti‐ cprcncLirSヽ local govcrnment.Atthis inomcnt,thc increascd scopc for local initiativc in North Korca docs not havc the samc mcaning as dccentralization in(ご hina, v on thc cdgc of a prillnitivc phase of transition to、 vards but it is no、 dcccntralization. Thc institutional basc of econolllic refornl in China has

24


vith thc provided local govcrnmcnt officials,party sccrctarics and cadrcs、 po、vcr to act as rnembcrs ofthc board of directors in a largc cntcrprisc.Hcrc thc county plays the rolc of corporatc hcadquarters.31 WIeanwhile,thc county in North Korea as a wcll― d cincd self― rcliant unit is authorizcd to seek its o、vn indcpcndcnt survival stratcgy. With thc extended lcc、 vay of rnanoeuvre,the local party sccrctary and governmcntal officials allow profit― sccking entrepreneurial activitics for the basic subsistence of thc local pcoplc. The incrcascd local lcc、 vay mcans somcthing more than thc rcglonal self― reliancc prevlously imposcd by thc statct it implies rnorc autonomy than thc latter intcnded. party― This incrcascd local leeway has sevcral implications for enterprise managcmcnt.Ittirst,the rcglonal sclf― rcliance adopted at the cnd of 1950s came to yicld an unexpected rcsult four dccades later, namely an intcrdependent rclationship bctween privatc cntrcprcncurs and local authorities at thc tilnc of cconornic deterioration.36 0n thC onc hand,local govcrnment officials,party sccrctarics and cadres arc rcluctant to give full and opcn rccognition of thc dcviation of cntrepreneurial activitics frorll thc principle of unificd and detatled ccntral planning. This is a crucial diffcrcncc from the casc of China whose rcforlll policy lcgally institutionalizcd privatc cntreprencurship. On thc other hand, both the private entreprcncurs and the local authoritics in North Korca find thcmsclves in thc samc boatin practice,as thc privatc cntrcprcncurs'profit… sccking motive comes to bc compatibic、vith thc local officials'conccrn for scl←suttcicncy in thcir jurisdiction.That conccrn thcrcforc bccomcs thc guardian and protcctor of the entreprcncurs'profit sceking;and,in a sense, thc profit― sccking motivc is thc function of the concern. Second, thc incrcased local lccway accords 、 vith the 冴でヵrcrθ indcpcndent budgct systclll at the county lcvcl. Each county as an indcpcndent unit is to pursuc commercial activity and dccidc the、 vages of thc pcople、vho arc involvcd in that.Furthermorcぅin thc Hlldst of thc food crisis,cach county has to dcvclop its own cxport― oricntcd products to carn foreign currcncy,37 and tO allo、 v this thc right of trade、 vas endorsed.Thc county government camc to import grain products from China and Russia by establishing its own budget for that purposci for cxample,it、 vas allo、 vcd X This shows thatthc county as a to trade copper and wood for、vheat flour.ユ sclfttsufficient unit sccms to opcrate as an entcrprisc undcr thc pressurc of hard budget constraints. Third, as thc party's authority over econoHlic affairs 、 vancs, thc relationship bctwcen centre and reglon in gcncral came to change froIIl thc Hlld-1990s.The patty comnlittccs of thc local enterprisc and at thc county levei no longcr function for the transHlission ofthe ccntral party's econoHlic vcr only for social control. Likc、 v isc, local policy but exercisc thcir po、


25

govcrnincnt, the county in particular, bccomcs morc indepcndcnt of thc ccntral statc than before,as thc state's cxtractive po、vcr and rcdistribution capacity have clearly decreascd.Thc looscning of the centrc一 rcglon tic has rcsuitcd in local autonomy grudgingly conccdcd,in thc sensc that it is not initiatcd by the top authorities but brought about by the forcc of circumstanccsoS9 0nc question that can bc raiscd here is、 vhcther or not this rcluctantly conccdcd local lecway lcads to colluslon bct、 vecn thc local governmcntal officials and the party sccretary and cadrcs in the intcrcsts of local pcoplc alonc,bypassing thc impcratives of thc central partyttstatc。lf such collusion vecn local lcadcrs takes place in divcrse rcgions,it、vill bring a forlll of bet、 ìnstitutionalizcd plLlralisHl', tO uSC Hough's tcrm, 、 vhich prioritizcs local vecn national goals and charactcristics and somctirncs gencratcs conflict bet、 local sclf― interesL suCh as happencd in the forincr Sovict Unlon under Brczhnev's rule.ⅢⅢIn North Korca,it is prcsumed that such colluslon docs not occur bccausc ofthc solldarity of thc party hierarchy in the grip of Kim region tic has been Jong 11. In othcr words, cvcn though the ccntrc一、 veakencd, the party hierarchy continucs in gcncral to doIIlinate authority rclations among organizations. In sum,privatc cntreprcncurs havc mushroomcd in fluid circumstances iacking stable institutional arrangcments,Thatis,thc spread has bccn due to increasingly cffectivc local lec、 vay,、vhcrcas thcir activities and practiccs are not institutlonalizcd becausc of thc absence of provislons for lcgalizing thcm. C)、ving to thc incrcascd lcc、 vay of county-lcvcl govcrnlllcnts, cntreprcncurial activities arc rationalizcd to somc cxtent among thc pcople 、 vhose intcrests arc associated with thcm.Coullty govcrnmcnt officials and thc party sccrctary and cadrcs conle to bc supportivc― cven if not cxplicitly 一 of thc private cntrcprencurs'activitics.They bclicvc that advanccmcnt of thc privatc cntrcprcneurs contributcs to thc 、

vell― bcing of thc county,

becausc cmploymcnt and tax arc crcatcd and that can help thc rehabilitation v workCrS in thc 、 vorkplacc of thc local cconollly.Furthcrmorc, fcllo、 vorkcrs 、vho provide daily ncccssities and consider thcnl social 、vclfare 、 consulllcr goods for thcmselvcs.

Prospects for Local】

Enterprise Reform

Rcgarding thc futurc fatc of cntcttriSes,it is a moot point、 vhcthcr thc top leadcrs in North Korea havc thc、 vlll to bulld a nc、 v institutional foundation to fostcr privatc as、 vcll as collcctive cntcrprises and to introduce a policy of hard budgct constraints for statc―o、vned entcttriseS・ This is an important elelllcnt of dcccntralization in a transition systcm,It looks unlikcly that thc authoritics ccntrcd on Kinl Jong 11 、 vill soon initiate such enconlpassing

26

ENTERPRISE AND WEし

FARE REFORM IN COMMUNIST ASIA

reform.Thcy arc not so nluch interestcd in eithcr dolnestic cconolllic rcform in gencral or cntcrprisc rcforrl in particular. but rathcr in opcnings for tourislll and foreign investillcnt in thc spccial cconolllic zoncs.The adoption v on National Econonlic Planning in April 1999 shows thcir strong ofthc La、 desirc to restorc the unificd and dctalled ccononlic planning thatvas 、 dcvastatcd by thc increascd local autonomy slllcc thc cconolllic crisis.The la、 v denounccs econonlic activitics outsidc thc Plan, deccntralization and libcralization,apparcntly rcflccting thc dilellllna posed by thc prospcct of loosening the ccntrc's control ofthe cconomy.41 1n the mcantilllc,there cxists cvidcncc that thc authoritics arc gradually accommodating thcmscivcs to thc rccently cnlargcd private scctor and incrcascd local autonomy in cconoHllc affairs,rccognizing thc difficulty of rcvcrsing thc trend.First of all,thcv ne、 Constitution adopted in Septembcr 1988 includcd somc visiblc changcs in comparison 、 vith thc prevlous verslon. It cxtcndcd thc scope of privatc o、 v nership by approving thc incomc fI・ om alllcgal economic activitics(Articlc 24);it cmphasized thc usc of independcnt accounting illcthods and introduccd such concepts as cost, pricc and proht(Article 33):and it included collectivc LlnitS,in addition to statc oncs,as illdcpcndent units of forcign tradc(Article 36). Sccond,according to the La、 v on National Econolllic Planning of 1999, local governnlcnt, alollg 、vith statc plannillg organizations, can cxercisc solnc po、ver in ccononlic planning(Articlcs 2 1-24).While giving priority to central planning, it scclllingly cxpccts a positivc contribution from rcglonal sclf― rcliancc to growth in outptlt and thc prolllotion of trade.Hcrc the rolc of local governlllcnts(thC PrOvincial Peoplc's(3orllinittcc and the County Pcoplc's Conllllittcc)in eCOnOnlic planning bccomcs significant, sincc thc positions of thc local govcrnnlcnt head and the party sccretary, both of、 vhich 、vere prcviously occupicd by thc pal‐ ty official, are no、 v separatcd undcr the nc、v(3onstitution.In lcgal tcrnls,local govcrnmcnt and its officials are rcsponsiblc solely to thc cabinct.、 vhich is no、 v thc nlanaging institution of the pcoplc's highcst dccision―nlaking institution.Thcsc lcgal changcs symbollzc thc acceptancc of thc irrevcrsibic trend of local govcrnmcnt autonomy,cvcn if this docs not neccssarily imply a lllcaningful changc in thc pal・ ty's dolllillancc ovcr thc systcnl as a、 vhole. Third, Nol‐ th Korca has takcn illcasurcs to rcl｀

orm statc― owncd

cntcrprises.At thc end of 1999 and in carly 2000, it reduccd ill sizc 44 associatcd and integratcd cnterpriscs in ordcr to halt the knock―on ettect of work stoppagcs in any of thcnl.(]onsidcring that thcsc cntcrprises arc apparcntly opcrating at only 20-30 pcr ccnt of capacity,thc separation of entcrpriscs is apparently intcnded to foster sclf― reliancc til each statc― o、vncd enterp14isc.Furthcrlllore.thc reforms includcd the closurc of sonlc bankrupt conccrns.For instance,trading colllpanics、

vcrc rcduccd fronl sonlc 300 to


27

about 120 by lncrgcr and integratlon.42 Thc Nampo Glass Factory,onc ofthe largcst factorics, 、 vas shut do、 vn becausc of its dcbt and deficit,43 This ilnphcs that the authoritics rnay launch anothcr round of size rcduction and closure of cntcrpriscs if they fccl that it is necessary to curtall the state's iscal burden. Finally,the unprcccdcnted measures of pricc rises and、

vage incrcascs,

plus thc curtailing of food rations,adopted in July 2002,lmplied a transition from a distribution economy to a money― bascd onc.44 This monetization vould neccssarily bc associated、 vith thc activation of markcts in proccss、 which thc supply and dcmand of resources and products takes place. Whcthcr it is statc― o、vnCd Or collcctive, cach cnterprisc is cxpcctcd to bccome a profit― yiclding cntity,discarding old habits of relying upon statc subsidy.In the system of idcological comHlitIIlcnt to ccntral planning,this is a ne、 v changc that could not bc sccn before. Thcsc changes do not automatically lnean that North Korea is attempting to bulld a ncw institutional foundation for fostcring privatc and collective cntreprencurial activitics. In thc llght of the expcricncc of systcms undcrgoing gradual transition, enterprisc rcforlll in North Korca has to overcomc many hurdles. In gcncral,enterprisc rcfornn is one of the most challenging tasks in the transition systcln, because it is intcrt、vincd 、vith cconoHlic changc in other ficlds,For instance,a prcrcquisitc for state― o、vned cnterprise rcform in an economy undcr gradual transition,as sccn in China and Victnam,ls fiscal and banking rcfornl,that is,scparation bct、

vcen thc state fiscal systcHl and commcrcial banks,With the creation of crcdit― based COIIIInerCial bank loans alongsidc rneasures to curtall and end state subsidies to state― o、vncd cntcrprises,only cfficicnt and productivc cntcrpriscs are able to survive,reducing thc burden on statc cxpcnditure.This is why cntcrprise rcforHl in thosc transition systellls has bccn protractcd and dclaycd. In vas largcly forccd by thc particular, Victnamcsc cnterprisc rcform 、 conditionality attachcd to financial assistance fronl intcrnational donors such as thcヽVorld Bank and the IWIn45 What 、 vlll bc thc feasiblc path of rcform 、

vith rcgard to cntcrprisc managementin North Korea?Thcrc sccms to be a possibility of bottoIIl― up rcform,attcmpting to takc advantage of thc dissclllination of rcforms from local cntcrprises, particularly thc local collcctivc enterprises. This may happcn since, apart from the complcxity of the rcfornl proccss, thc lcadcrship hesitates to takc a rcforn■IIlcasurc against the largc statc― o、vncd enterpriscs that are controlled by thc central statc for sccurity reasons.臣 lore ilnportantly,it rnostly corresponds to thc basic traditional valuc of rcgional sclf― rcliancc. The reform frolll belo、 v requircs institutional change in cnterprise managcmcnti thc gradual transformation of thc cxisting local

28

ENTERPRISE ANDヽ

VELFARE REFORM IN COMMUNIST ASIA

frccdoHl of rnanocuvrc into lcgal powcr ovcr llcences.taxes,contracts and appointlncnts.It is a significant clemcnt of dccentralization. This institutional transition should be vcry silnllar to that of rural China, stirnulating local devclopmcnt and prosperity.This docs not FnCan that thc initial condition of cconolllic reform of the vo t、systcms is identical: of course they are difSerent、 vith respcct to local rural conditions and levcls of industrialization as 、vell as soclopolitical cxpericncc and political leadcrship. For instance, unllkc the rural base of to、 v nship and villagc cntcrpriscs in China, thosc of North Korca arc not neccssarily located in rural areas but mostly ncar industrial bclts in medium and small citics as 、 vell as in countics.46 Despite such differcnces, howcver, North Korcan entcrpriscs have alrcady lnet solne conditlons that arc silllilar to thc Chincsc case at an carly stagc of rcform.Thcrc exist appropriatc human rcsources,namcly privatc cntrcprencurs, who havc coIIIInCrcial and busincss cxpcriencc that can contributc to increasing the productivity of local cntcrpriscs and local econolnic growth.Thcrcfore,if thc institutional arrangcments are providcd alongside the facllitics and matcrial rcsourccs, local cntcrpriscs in North Korea may survivc cconorllic stagnation and bring local devclopmcnt, At thc initial stagc of institutional change, it can bc assumed that owncrship remains intact, 、vhilc thc rights ovcr opcrating surpluscs arc givcn to participants bascd on various forlns of contract,This is a truly non― standard solution, as sccn in thc Chincsc rural cntcrprises, because the transition bcgins without clan敏 ing thC dcnnition of ownership.47 1n thiS transitlon, sincc the cnterprises are state― owncd or collective in principlc and controllcd by the local govcrnnlents in practice, nobody can clainl cxclusive ownership over any part of thc facilities or fixcd assets.But therc havc to bc formal and informal contracts for thc sharing of pronts,in terills of rcvcnuc to thc local govcrnlllcnt and of、 vagcs and bonuses for workcrs and othcr participants. In so far as North Korea keeps the tradition of rcgional seif― reliance for thc tiIIlc being, thc county 80VCrnmcnt 、vill become a self―sufficicnt unit、 vith thc authority to dctcrllline thc ratc of tax and fcc.Thcn thc incomc can be uscd mostly for constructlon and、vclfarc prttCCtS With`local charactcrisdcs'asit was bebrc.Local government docs not appear to cngagc in prcdatory taxation.Not only has this bccn sho、 vn in the Chincsc casc,4ヽ v― but also thc lo、 tax pollcy as an inccntivc for busincss is bcconling a univcrsalla、 v.In North Korca)rccognizing that the successful local cnterpriscs、 will contributc to gro、 vth,thc local government officials, party secrctarics and cadrcs are cxpcctcd to collcct suitablc amounts of tax from thcm. The signif‐ i cancc of thc rights over the opcrating surplus, from all institutional pcrspcctivc,can bc proved by thc succcss story Of thc August


29

3rd Production Drive in thc perlod of stagnating local enterpriscs evcn

bcfore the cconomic crisis.While the ottCCtiVc ofboth 10cal cnterpriscs and thc production drive was coHlllt10n,their rights ovcr the opcrating surplus differed.It is cstilnated that some 88 pcr cent of the local cnterpriscs were owncd by thc statc and only 12 per ccnt of thcm wcrc in collcctivc vncrship.4° o、 Wlorc ilnportantly,cvcn thc collcctively owncd entcrprises、 vcrc ullder thc tight control of local authorities for the distribution of profits.NItost of thc incomc、 vas extracted by thc county governmcnt for its own budgct,In contrast,thc、vork tcams ofthc productlon drive wcre managcd by、 vorkcrs themsclvcs, even though thcy 、

vcrc licenscd and supcrviscd by local

govcrnments. All thc membcrs participated in planning, production, markcting and salcs.Furthcrmorc,a、 vork tcam with fcwer than tcn pcoplc vas morc nexiblc in rcsponding to changcs in the environmcnt than local 、 cnterprisc.R)As a rcsult,thc rights ovcr thc opcrating surplus contributed to vth ofthe August 3rd Production Drive and to the burgconing thc rapid gro、 sccking entrcprcneurial units,cspccially during of its work― tcams as profit― the period of econoHlic crisis in thc 1990s. Likewisc,the rights over opcrating surpluscs arc highly signitcant for the cntrcprencurial activitics of local collcctivc entcrprises,What does not matter is o、vncrship: 、vhcther a local collcctive cntcrprise is ne、 vly cstablishcd by a group of cntreprcncurs,nonlinally affihated to rclativcly largc― scalc cntettriscs likc the associated cntcrpriscs, or belongcd to auxlllary organizatlons such as local units of thc women's lcaguc, tradc unlons,and the farmers'lcaguc. WIcan、vhile, thc introduction of nc、v technology and facilitics 、 vill furthcr assurc local developmcnt.Today most of thc local entcrprises arc backward in thcir tcchnology and facilitics, so it is necessary for thc statc to considcr the replaccment of old ones authoritics of thc ccntral party― by taking advantage of various forrlls of assistance from thc outsidc world. Onc sourcc is technical and financial assistance from international organizations such as thc World Bank,IWIF and UNIDO.For this,North vith thc United Statcs Korca must first normahze diplomatic relations 、、 vhich has veto power in thcse organizations.Anothcr source may be South Korean cntcrpriscs. North Korca has to considcr how to link thc investincnt of South Korcan vth of

busincsscs in the North Korcan spccial econorllic zoncs to the gro、 local entcrprises. For instancc, South Korea's Hyundai Company is planning to construct thc Caseong lndustrial Complcx near thc border bct、vecn thc t、 vo Korcas. When thc construction is finished, local

cnterpriscs nearby can access modcrn technology morc caslly and have a linkage cffcct from the industrial complex.MIcanwhilc, looking at thc

30

ENTERPRISE AND恥

′ ELFARE REFORM lN COMMUNIST ASIA

Chinesc case of to、 vnship and vlllagc cntcrpriscs,the loCal cnterprises by thcmsclves can find a sourcc of hclp frolll thc technical manpo、 vcr of thc I Because ofthe largc state― owned cnterpriscs for tcchnological innovation.｀ high lcvel of industrialization, North Korcan statc―o、 vncd entcrpriscs, dispcrsed thrOughout the country,have many expcrts and technicians、vho arc undcr― utilizcd in thc worsening cconoIIlic situation. Therc rcmains the qucstion of how to deal with private cntrcprcncurs in manufacturing particularly.With thc cxception Of、 vork teams ofthc August 3rd Production Drivc,IIlost Of thosc、 vhO haVe engaged in manufacturing are dcinitcly lllegal according to the North Korean lcgal system. It is prcsumcd that the top authoritics tacitly approve thc privatc entrcprencurs for thc tiFnC bCing,looking for a way to bcncfit from thcir energyo Sincc the o、 vnership of statc-0、 vncd and collectivc enterprises has rcmained intact,it is ilnpossible for thc local authoritics to lcgalize the vncrship o、 of thc facilitics that have bccn used or acyぁ vncd by privatc cntrcprcneurs, ごrθ。、 In othcr words,thc lcgalization of private cntreprcneurs、 vlll takc tilnc and dcpend upon thc succcss of local cntcrpriscs. If thc arrangements for fostering local cnterpriscs bring local growth and、 vcalth,thcsc cntcrpriscs may absorb thc dynalllislll of priVatc cntrcprcncurship,、 vorkcrs and cxpcrts as、vcll.This、vill bc followcd by thc entry of nc、 v privatc entcrpriscs,that is thc lcgalizcd crcation of collectivc cntcrprises by groups of entrcprcncurs with accumulatcd personal asscts.By contrast,if thc nc、 v arrangemcnts are lcss succcssful,private cntreprcncurs、 v ill continuc to spread in an lllcgal fashlon,since they are incompatiblc、 vith thc public― oricnted idcology. Tc)suHllnarizc, North Korea nlay bcgin M/ith institutional change 'or boosting local cntcrprise, follo、 ving thc tradition of rcgional scif― rcliancc and state and collcctive vnership.This o、 is not necessarily accompanicd by thc、widesprcad reforHl policy secn in thc`big bang'stylc of transfornlation in Eastcrn Europc in、vhich privatization、 vas thc lllost crucial elcment. It sccms likcly that North Korca、 v the path ofthc Chincse to、 vlll follo、 vnship and villagc entcrprises, vhile 、 lcaving for latcr the rcform of largc― scalc statc― vncd cnterprises and fiscal and banking rcforms. o、

Condusion ln North Korca,とis in othcr transition systcms,cnterprisc reforlll、 vill bc onc of thc most challenging tasks becausc of its complcxity.One point is clcari thc path of transition positivcly corrclates、 vith institutional and historical traditions.North Korca had cstablishcd thrcc institutions cndorsing lilllitcd ′ autonomy for local governments and 、、 ork―placcsi rcg10nal self― rcliancc bascd on local entcrpriscs, indcpcndent accounting mcthods, and a collcctive dccision… l alaking body ccntred on the party coHlinittcc. Those


31

institutions rnostly suffercd Hlixcd fortunes in that their cxplicitvcre norms、 not rcalized bccausc of the shortagcs,thc incfficicncy of central planning, and thc party's donlinancc;furthcrmorc,thcy wcrc seriously、vcakened in vas the thc cconoHlic crisis of thc rlid-1990s. A noticcablc conscqucncc、 rcvival of thc latcnt valuc of rcgional sclf― rcliancc:incrcasc in the freedom of rnanocuvrc of local govcrnmcnt during thc cconorllic crisis.The increase in local lccway has a dual significance:onc is that thc county govcrnmcnt in particular became an enterprising seif― sufficicnt unit; thc othcr is that local govcrnmcntin gcncral、vas allo、 vcd by the party― state to excrcise rnorc powcr in cconorllic affatrs. In this iuid situation, privatc cntrcprcncurial activitics lnushroomcd. The foundations of entrepreneurship、 vere already laid by thc August 3rd Production Drivc lor Consumcr Goods,which Kim Jong ll initiatcd two dccadcs ago.It is notablc that thc succcss of thc production drivc in the econonlic crisis can bc put do、 vn to thc rights ovcr thc opcrating surplus. Regardless of organizational afflllation,the、 vork teams are allnost frec to manage planning, producing, marketing and一 most importantly一 pront sharing.This is、vhy thc work tcams prollfcratcd,to takc ovcr thc role of local enterpriscs that had been controlled by local governmcnt. Thc fcasiblc path of transition for cntcrprisc managcmcnt、 vill depcnd rcliancc, and thc upon institutlonal traditions, particularly rcglonal sclf― history of succcssful 、vork tcams in thc production drive. From the perspective of the top authoritics, itvill 、 bc thc establishment ol' lcgal institutions for increascd local vay;that lee、 is,thc devolution oficgal powcr to thc county govcrnmcnts ovcr liccnccs,taxcs,contracts and appointlncnts l,′ s― カーッデざlocal collective enterprises,、 vhether ne、 v or、 vell― e stablishcd ones. In rcality, scvcrai ncccssary conditions arc mct. Thcrc is a po、 vcrful hankering for profits among thc pcoplc, plcnty of cntrcprencurs fanliliar 、 vith commcrcial practiccs,lllany undcrutillzcd tcchnicians in statc― vncd o、 enterprises and, more ilnportantly, success storics of cntrepreneurial activities tacitly approvcd by local authoritics.In this respecL thc fOCus of v pohcy will bc local collcctivc transition for thc implcmcntation of thc nc、 enterprlses. Dcspitc many diffcrcnccs,thc fcasiblc transitional path may bc sirnilar vnership, to that of〈 ] hina's rural reform.Whllc rctaining thelltl in public o、 cithcr state― o、 vncd or collcctivc,thc to、 vnship and vlllage enterprises、 v ith rights over surpluses burgconcd in China during the 1980s. Recognizing their positive role for local economy,the local party secrctary and officials havc had lllutually dcpcndcnt rclationships、 vith thc rnanagcrial pcrsonncl of the enterpriscs.It seems that thc(ご hinese case conforllls to thc continuing and futurc changc in North Korca.This has bccn provcd by succcssful cascs of、vork tcallls in the production drivc sincc the second half of the 1980s.

９一

ENTERPRISE ANDヽ

/ELFARE REFORM IN COMMUNIST ASIA NOTES

vas repollcd in July 2002 that North Korca、 1. It、 vould increasc、 vages over tenfold and raisc the price of rice ovcr 200∼ fold,reflecting the unofncial markct pricei thc revaluation is so enormous thatit seems llke a rnonetary refornli 7Pg SOθAヵ ″ ど、 θ打 ?`!rrで α′ gr′うθ, 19 July 20021【 23 July 2002. 2. Thc sector of privatc cntrcprcneurial activitics is,in dcrlnitiOnal tcrms,notthc sanc as thc sccond cconomy.Thc second economy is an inclusivc conccpt,sincc it comprises not only ilnproper activitics that takc placcvithin 、 the planncd econOmy but also thosc privatc activitics that dcrail thc fundamcntal principlc of ccntral planning. 3. For thc thcorctical discussions of such conccpts as prefcrcntial corrclation and path dependcnce in explaining changc、see Douglas、C,North.r7rsrir[ィ ′ 7ボ rrα rFθ rFθ ′C力α71gで ,/rlsrir″ ヽPで r,?,α 777Fて βれ冴どごθttθ ″Cで (Cambridgci Cambridge University Prcss, 1990);Jailles G` 4つ M a r c h a n d J O h a n R O l s冴 c,ns,θ Rl ビご ,rで F Fヵ r 7 2 SrrF'tθ s f rOrtPtで 'θ α ヵ茂α′ れα′助ざj ざ F r ,ざご rt″ ザ P θ′ 〆』" ィてαr r r 2 ,し 7物て .・ 2 れ′ たパ惚′ 7 好アル ( N e w Y o r k : F に c P r c s s , 1 9 8 9 ) i E r v i n L a s z l o nA FT27 22で ?g ttb/′ ごんαttgF′ ″ (Ncw York:GordOn&Breach‐ 1991)i and Sung Chu1l Kim,Ìnstitutional Changc and Systcms Thcory',unpublishcd manuscript 4. John Wong and Mu Yang.｀ Thc Making ofthe TVE Miracle:An Overvic、 v of Case Studics'‐ in John Wong,Rong Ma and Mu Yang(edS。 ),Cカル?αむR″耗2rご77r″ β″″で″塔 (Singaporei Times Acadeinic Press,1995),p33. in tcrms of sccurity rcasons,see Philo Kiln, 5. On the cxplanation of the rcgional reliance sclf― ど, そん御で, F y Ⅲ iancc System of North Korca)(SeOuli KINU, ビθ灯夕r " c ヵりで( R e g i o n a l Srccll← 1999),pp 25-9. 6 Unlike in South Korea,thcrc is no rrl),,77.a lniddle range unit bct、 veen county and/j,in North Korca During thc Korcan War,North Korca conductcd an adlllinistrative rcform to cliininate thc ′71メ rr77, eXtCndillg thc sizc of the /′. This 、vas for the cstablishmcnt Of cffective transHlission and penetration of statc policics by rcducing thc hicrarchical lcvels ′ 7 Cで ι ′ ′ りα(WOrkcr),MarCh 1985,pp.3-27 8.C)で θヵ灯2 Srサ2θ″ (Dictionary of Econollly)(Pyongyangi Sahoigwahak Chulpansa, 1985), Vol. 1,p215 and VtDl.2,p443. 9. Ho、vcver,it should bc noted thatthe iocai budgct constitutes a part ofthc local governmcnt's annual incomc and expcnditure For instance,thc salary of local govcrnment ofttcials and teachcrs is paid by thc statc,and cducational cxpcnditurcs and mttor cOnstruction works arc subsidizcd by the statc.Morc importantly,thc budgcts for thc large statc― o、 vncd enterprisesn ll10Stly encrgy and hcavy and chelTlical industrics,arc complctcly and directly subsidizcd by thc state FuithermOrc,the fact that thc ratiOveen bct、 st41te budgct and local bLldget、 vas 85i15 sho、 vs INorth Korca's relativc vlo、 rcliance on the locally managed cconomy:see Philo Kinl, op.cit.,p.65 10. Jて 71g Fr Sで力,2 yθ θ′ FP (SclcCted Works of Kinl Jong il)(Pyongyangi Joseon Rodongdang 4′ Chulpansa, 1998),Vo1 8,p.4. 11,Suk― Gi Lce, 』 !ィた/7`777で ″' ブ'わ 77g (Local rr72F Cθヵgビθβ ガドでθ″げ/2`ェァ 7gFげα βαけで()′ , ノ2θ′ ?,77α Enterprisc in North Korcai Prescnt and Future)(Scoult KIE■ 1998),pp ll and 53■ , ヽ 12 Shin-lirn Choi and Suk― gi Lec, 3″た7Par2で ltF Sa77?θ ′ ′ F C/7ビ ′ rプでどρ β 6Ⅲ ,α gメでぃβCFでっP Cltα ′ 1998). ( I n d u S t r i a l N t a n a g e m c n t a n d E n t c r p r i s c c Mm aC n at どi n N o r t h K o r e a ) ( S C O u L K I E ■ p.25 13.ム缶〃?′′S冴′ 2g yでりα代メ "(COllCCtCd Works of Kim 1l Sung)(Pyongyangi Joseon Rodongdang ち Chulpansa、1984)ゃヽ o128.p.125` 14.Sung Chull Kim,.Is North Koreを l Following thc Chinese Model of Reforlll and Opening?'、 Institute Rcport of East Asian lnstitute,Columbia University(Dec.1994),p.8. 1 5 . X 打〃r r r S7,g′y でりαり, ( C 0 1 l C C t e d ヽV o r k s O f K i m 1 l S u n g ) ( P y O n g y a n g i J o s c o n R o d o n g d a n g Chulpansa、1992),Vol.38,pp.346-62. 16 Tac‐1l Kim,3″たんてど ′ ?C″た θでrィ F Clt`7′ ?r,″ ′ ?gCんでgメでθ(Management System of ドでθ″ggF2(ッざげでθ′ State― O wncd Entcttriscs in North Korea)(Seouli KINU,1993),pp.48-51. 17 1nstitutc for Pcacc Studics,Dθ ′ ?ぷたrrげ 2わメ Asia and South and う!ィ々Nct〃 ″たんα71, 988(Northeast North Kol・ ca, 1988)(Scoul!IPS‐ 1989),pp.182-6 18 For important structural fcaturcs of rcforill in socialist systcm, sec Janos Kornal, r72ご

33


On Rodongd獅杯論H sunwyOngy価ど艦総忌抑並ゅ ,棋筋 .解励鍔汗溜だ『掛路靴景覇競亨き灘ボ鰐携崩拓01.8,p305. 獣路盟鑑鮮品:鞄F艦ぷ儀r解 Kina 1l Sung)(Pyongyangi Joseon Rodongdang Chulpansa, 1980),ヽ 2/ilr′ 2メ lt rr′ でθ″gC/1でgメビθ,p26. す(ブ θ″Fθでと 71 Crrた 21. Tae-1l Klln,β″た77α メでθ7!ggrで

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″ざ川屯買悦ず盟￨ ' え協 i 監 θヵ加ごD ビ泌 θ″″例々腕昭前 " g 働ガ惚的打0 泌 S θt t α

2鮒拓器川品 f懲仏開品堆推群路総選を羅無鮒 H蹴すれ折無総Υ魚解盤i簡鮒舗路ま隠 &件柱十慾it譜淵i鮮争増鮪私 (SeOul:Hanul,2000),p4189` `Bukhan Jaycongeobcui (NoHh Korean TeuttinggWa Baljcon Banghyanゴ 28. Geum― suk Lim‐ ′ 7息 ″ r cメ2θ and Prospects), ,挽ル (UnifiCation gサ Private Entreprencursi Characteristics Apri1 2002,p.58 Economy),MarCh― v、vith Chcong,song Koh,Unptlblishcd Data of lntcrvie、 v w i t h D c t t c t o r s f l P o m N o r t h 29. Intervic、 Korca(Seoul:KlNU,1997). て ″冴F θr t 2 ' g , ,l rP たド F a r 7 7,FP,θ てr i r i,cα ぷ律, マr 7 7 ' F a r27ビ 1f ' ァメ rr力 r Nθ 3 0 A n d r c w S N a t s i o s , T ' 7 22Cα 汚 (NdShington,DCi Unitcd Statcs lnstitutc of Peace Studics Prcss,2001).p.99 31. On thc falllinc train in the inid-1990s.sec ibid,pp.78-80 32. C力r)slt,P rrbθ ,21 Aug 2001

Jotton Rodongdang :・艦瑞掛智 ∬悦庶Υ呂 8[樹 ;g概与縄祈耕 j;】鋭把 :オ朔・ ♀ よ “ 触たズ御θ θ 々ざ ‖ 加ガ CCrkdCy, tt ″ Fθ 触 ″ θ 札縁将温t声和″ サゴ就晋督!￨'料げど 35拙甘 CハビUnivcrsity of California Prcss, 1999),pp 95-138 vccn urban cntrcpreneurs and thc statc, see 36 For the casc of such mutual dcpendcncy bct、 "ド , , 2ル〃竹r たでr R くた, ル ′ たs `rris,"f と s2rg``7て rヽごて 7 " k ') ,′S ( )r ご ! ′F f,θ , 7【T ` ″/ ` ぃr D o r o t h y J S o l i n gCc力 rf、

ユ韻畿 S縛魯勤搬甘鰐群麒靭撞描 a 面側村n酌苦橘ぷ Ъ; ; 士京 , 7 洗謂獄? 即 w r r r l t r r 7 続ば煎軒嗣側』画鮒 and thc Korcan Pcninsula)(SCOuli Hanul,2002),p236. で,',2でど (Cambridgc,肘 lA:Harval‐d Univcrsity )ザrヵ rL/ヵ'o,7Fs Cθ、でざ`がfで 40 Jerl・yF.Hough,rrθ Press, 1979)‐pp.528-9 げs A g ビ ′ !ご ? r / t rVlで ′ 4 1 て θ万 ? `″ どC で′ メ, 9 A p r i 1 1 9 9 9 鍛

仏温 ∬ 艦1鮮告岩 ti群持熱i,1告掛謎甘科群l織描糾盤鞘景

34

ENTERPRISE ANDヽ

アヽ ELFARE REFORM IN COMMUNIST ASIA

43 ブ θざでθァ 7Sル2う 0コ14 Jan.2002` 44 Thcsc lllcasures look silllilartO thosc taken in Victnam years before Doi Moi ln 1980,Long An Province inti‐ oduced a ne、v pl・ i cc pohcy and suspendcd ration coupons. Thc policy increascd prices of ricc, mcat and other consumer goods to rctlect illarket prices,and thc vas colllpcnsatcd by vagc a、 incrcase Sincc it rcsulted in a success of prOduction price risc、 increasc,the authoritics at the centrc approvcd it as a general lllodel ofinccntive incthodi scc ヽ G a r c t h P o r t c r , L /ri″ で ` !″ ァ r T 7 7 でP θr ' r , ぃ。/ 』 ″″例て角 αr , ごs θご′ α′ ,s綱 (IthaCa,NY:CorncH Univcrsity Press, 1993),pp.123-4. 45 The donor Organizations havc prcssed thc Vietnamesc governlllcnt to cxpcditc cntcrprisc rcform by cithcr inaking thc amount of aid dcpend upon thc progrcss of rcform or by special funding with spccific conditlonalityi see World Bank, ″ yr?′ αJ/1i A Pttθ ざ sRで ,力rr θ ″ rFlビ gttα ごθ7′ ″ rT AssFsrrィ "ごビSr/t7′ でgメqttrんでル勧・ rtr 。 β,lk c仰24r7,′ 99ワー2θθ2(WaShington,DC:ヽ Vく〕 Hd Bank,2002)land IMF.И grヵ ″fRで ?″でド α′ rrrpr`7T力″ビー降α/Ark7″ gで′ 仰で′ ?r",7冴ビrr力でPθⅢ マ/●ヽヽヽ ,(ヽvashington‐ DC:Asia and Pacinc Dcpartmcnt‐ Rでど,て ′ ?α′ rFθ 7″C仰￨ザ r力√をて FFr● IMR 22 脱larch 2001). 46 Thc diミミ1で nce paraHels thc urball:1・ ural population compositiOn in thc t、 vo countrics. In China, thc rural population constituted 63.9 per ccnt according to the 1990 populを itiOn ccnsus. 、 vhercas in North Korea it 、vas only 36.7 pcr ccnt according to a SoLlth Korean statistical survcy in 2000.Thc urbanirural ratio in twO countrics seems quitc thc oppositc. 47. On thc rcsolutioll of polarizcd o、 vnership issucs through cOntract、in China,scc Chcn Jianbo and Gary H Jciも rsOnゃtDcvcloprnent ofthe Hcngdian Township Enterprisc Group:A Case Study'.in Cary H.Jc衛 3rson and lndcttit Singh(CdS),ど ,3′ ド ??ガ Ⅲ で Rぐル /1Pl i力C力,″ αf Oげ ,2でパカ", 打町力ざ′ riθ ′ :, rr72ノ Pで,文,″純α′ ,(ゼ (Ncw York:Oxttrd Univcrsity Prcss, 1999), pp.279-87 0n thc possibility of icarning froin Chinesc rtlral rcform, scc John WicMillan、も vhat Can North Korea Lcarn ttOm China｀ s Markct Rcforinざ7',papcr prcscrited at the 、 conにrencc on Thc System TransformatiOn of thc Transition Economicsi Europc、 Asias and North I(orca,Institutc for Korcan Unification Studics,ScOul, 14 Sept 1996,p 19. 48 0i、 Rιィ漁メ C力r′ ?て ′挽 ′ たでざ 9〃 !p.36 Ncverthclcss, it should bc notcd that thcrc exists a contrasting rcality that predatory statc agents illlposc financial burdcns on the pcasants in the central and wcstcrn bclts of China:for this analysis,sce Thomas P Bcrnstcin and Xiaobo Lu、｀ Taxation ヽVithout Reprcsentationi Peasants, thc Central and thc Locai States in Rcfornl C h i n a ' . C ん, ?′αこル招/ r で ,rヽ l l , N o . 1 6 3 ( S c p t . 2 0 0 0 )p 、 p 742-63 4 9 C h o l a n d L c c , β ″たん` 7 7 ″ 1 Fご& ` ″で( , r ' C l t ′ `r7ごん ′ でg ) ビ θ〃 C , 1 “ r ″プ2 〃θ‐p 1 2 . ｀v la・C r ご 50 C/2θざ ″r2/′ わっ, 17 0ct 2001. 51` Thc Chirlc、 c caSe Sho、 vs that a large rcscrvoir of tcchnictans irlo、 thc statc― vlled cnterpriscs is hclpful for the technological developmcnt Of rural cntcrpriscsi some of them pass Ovcr thcir lleM,(cchnology in cxchangc of gits or privilcges、 alld othcrs arc c1lgagcd in moonlighting atcr thcir worki sccヽ Vong and Yanど ,Crl'力 αむR″耗″ ′ど″rrでンパ,pp.34-5 7で rィ p漁タ