North Korea’s (April) constitutional revision and economic change

By Benjamin Katzeff Silberstein

A quick comment on the reported change of the North Korean constitution (back in April): I don’t have access to the revised version as of now (or a working VPN from Seoul…). But judging by the reporting by outlets like Hankyoreh (here), this seems like a quite important confirmation that changes in the economic governance system of enterprises in North Korea continues and is still seen as a priority by the state:

The publication of the full text of North Korea’s constitution, which was amended back in April, reveals that language about the “Taean Work System,” its traditional party-centric method of managing the economy, has been replaced by language about the “Responsible Management System for Socialist Corporations,” which increases the autonomy of managers at production sites and introduces market elements. This creates a constitutional basis for Kim Jong-un’s reform-oriented approach to the economy. The amended constitution also adds an expression about the chairperson of the State Affairs Commission “representing the state,” which effectively constitutes a formal declaration that Kim Jong-un, as chair of the State Affairs Commission, is the “head of the state.” The constitution was amended during the first session of North Korea’s 14th Supreme People’s Assembly, on Apr. 11, but the full text wasn’t released to the outside world until now.The full text of all 171 articles of North Korea’s revised “socialist constitution” was released on Naenara, a North Korean foreign propaganda outlet, on July 11.

Article 33 of the constitution says that “the state shall execute the Responsible Management System for Socialist Corporations in economic management while ensuring the correct use of economic spaces such as production costs, prices, and profitability.” This replaces language in the previous version of the constitution that read, “The state shall execute a self-supporting accounting system in line with the demands of the Taean Work System while ensuring the correct use of economic spaces such as production costs, prices, and profitability.” The key change here is a shift in the state’s economic management method from the Taean Work System to the Responsible Management System for Socialist Corporations. The constitutional amendment also adds language to Article 33 about “decisively increasing the role of the cabinet” in the management of the economy.

(Source: Hankyoreh, July 12th, 2019)

Why is this important?

In short, because these bureaucratic processes often stall. Kim Jong-un’s first few years in power saw a virtual flurry of new frameworks introduced for economic governance, most of them enshrining and institutionalizing rules and practices that had already been in place in much of the country for a while. Still, government recognition for these practices really matters, because at the very least, it indicates they won’t be curtailed or rolled back for a while. But this flurry appears to have ceased from around 2016 or so, or at least decreased in intensity and scope. Some have argued that some in the government may not have seen the results they anticipated on economic growth, and therefore turned their attention elsewhere. Including a strong reference to enterprise management autonomy may not indicate a change per se, but at the very least, it confirms that the broad strokes of the changes that have already happened seem to still be generally embraced by the government.

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