1. The context of North Korea’s socialist economic development
This article divides North Korea’s more than sixty years of socialist economic development into five periods to examine. Each period mainly organizes the development of North Korea’s socialist economy. The economic development plans formulated by the Workers' Party and the government, the basic tasks determined during each plan period, the specific measures taken, the development results achieved, etc., attempt to explain the development context of North Korea's economy more clearly.
(1) Post-liberation and post-war recovery and development of the national economy period (1945-1956)
During this period, the main purpose of North Korea’s economic development was the recovery and development of the national economy. Development and the laying of the socialist economic foundation can be divided into two stages to examine, namely the post-liberation economic recovery period from 1945 to 1950 and the post-war three-year national economic recovery plan from 1954 to 1956.
In 1945, Korea was liberated from Japanese colonial rule. After liberation, in response to the reality of the abnormal development of industry, declining and backward agriculture left by Japanese colonial rule, and the constraints on the development of productive forces caused by feudal and colonial production relations, the Central Organization Committee of the Communist Party of North Korea[1] established in October 1945 set out to Various democratic reforms were carried out in an attempt to revive and develop the economy and improve the people's material and cultural living standards. Among them, the land reform eliminated feudal land ownership relations and made farmers the owners of the land. It greatly improved farmers' patriotic enthusiasm, political enthusiasm and production enthusiasm, and created conditions for providing raw materials for the rapidly recovering industry and ensuring residents' food rations. ; The implementation of democratic labor laws guarantees the basic rights of workers to work and live; the nationalization of industries, that is, the nationalization of factories, mines, coal mines, railways, posts and telecommunications, banks, etc., lays the economic foundation for building an independent country. It ensures the leading position of the state-owned sector in the national economy and creates conditions for planned development of the country's economy; the Gender Equality Act liberates North Korean women, allowing them to enjoy the same rights as men in political, economic, cultural and other aspects, and actively participate in labor.
Since 1947, North Korea has systematically restored and developed its national economy and proposed the line of establishing an independent national economy through self-reliance. The Workers' Party and the government lead the people to restore and transform existing heavy industry factories, produce and supply machinery and equipment, raw materials and materials needed to develop the national economy, build new light industries that do not have any foundation, and develop agriculture to stabilize and improve people's lives. In addition, , focusing on strengthening the leading role of the state-owned sector in the entire economy. To this end, North Korea formulated two one-year plans in 1947 and 1948 and a two-year plan in 1949-1950.
In the total industrial output value in 1947, state-owned industry accounted for 80.2%, and private industry accounted for 19.8%. In the mining sector, state-owned industry accounted for 100%. This shows that in industry, the leading sector of the national economy, the state-owned economy has an overwhelming advantage. In addition, railway transportation, post and telecommunications, foreign trade and banking are also in the hands of the state. All these conditions have become a reliable guarantee for the development of the national economy in the direction of relying on the leadership of the state-owned economy, controlling and regulating the individual economy, operating the national economy in a planned manner, and continuously improving the welfare of the broad masses of the people. [2] During this period, planning departments were established from the central to local governments, requiring enterprises to formulate and strictly implement plans based on a detailed understanding of equipment, materials, funds, labor, etc., in order to improve the business management level of the enterprise, and at the same time A number of measures have been taken to rectify production organization, strengthen labor discipline, improve labor productivity, reduce costs, learn technology, and carry out labor competition.
During the three years from 1947 to 1949, North Korea's economy recovered and developed, with the average annual growth rate of total industrial output reaching 49.9%, of which the average annual growth rate of state-owned and cooperative industries was as high as 61.6%. By June 1950, On the eve of the Korean War in September, the scale of industrial production (except for the coal and metallurgical sectors) and total industrial output value in the northern half of North Korea had exceeded the level of 1944. During this period, agriculture also recovered and developed rapidly.
In 1948, grain output reached 2.668 million tons, 0.4% more than 1939, the year when grain production was the largest during Japanese rule. Compared with 1946, the total agricultural output value increased by 51% in 1949. With the development of economic construction, people's lives have improved. In March 1950, workers' basic wages were increased by 38% compared with 1947, and prices were reduced several times, resulting in a significant increase in workers' actual income. Farmers' lives have also improved significantly, and a considerable number of farmers' living standards have reached the level of middle peasants. [3]
The war from June 1950 to July 1953 caused serious damage to North Korea’s national economy. Compared with 1949, the gross industrial production in 1953 dropped by 36%, and the agricultural production dropped by 36%. Gross product fell by 24%, and national income fell by 30%.
After the armistice, the Sixth Plenary Session of the Central Committee of the Workers’ Party of Korea held on August 5, 1953 determined the basic post-war economic construction line of “prioritizing the development of heavy industry while developing light industry and agriculture”. Prioritizing the development of heavy industry was to eliminate the colonial deformity caused by Japanese colonial rule and lay the foundation for building an independent national economy and realizing socialist industrialization. At the same time, the development of light industry and agriculture was to stabilize and improve the devastated people's lives. In April 1954, the Seventh Session of the Supreme People's Assembly of the Democratic People's Republic of Korea adopted the "Three-Year Plan for Restoring and Developing the National Economy from 1954 to 1956". Its basic tasks are to restore and rebuild the country's name destroyed by the North Korean War. economy, enabling industrial and agricultural production to reach and exceed pre-war levels, laying a solid foundation for the development of economy, science, and culture and the improvement of people's living standards.
With the strong support of other socialist countries, North Korea completed the "Three-Year Plan for Post-War Restoration and Development of the National Economy" from 1954 to 1956 ahead of schedule, and its industrial and agricultural production fully recovered and exceeded pre-war levels. .
The industrial sector reached its target four months ahead of schedule. At the end of 1956, industrial production increased to 2.8 times that of 1953 (including production of means of production increased to 4 times, and production of consumer goods increased to 2.1 times), which increased to 1949. 1.8 times. The average growth rate of gross industrial production from 1954 to 1956 was 41.7%.
The industrial layout and structure have been improved. The proportion of the production of means of production and the production of consumer goods in the total industrial output value was 37.7% and 62.3% respectively in 1953, and 51.7% and 48.3% respectively in 1955. The proportion of production of means of production has taken an advantage. The proportion of the machine manufacturing industry and metal processing industry in the total industrial output value was 1.6% in 1944, increased to 8.1% in 1949, and increased to 17.9% in 1955. During the same period, the proportion of the textile industry increased from 6% to 11.4% and 17.2%. This shows that North Korean industry has significantly eliminated the one-sidedness and deformity left over from Japanese colonial rule and continues to work in this direction.
In agriculture, grain output reached 2.87 million tons in 1956, an increase of 24% from 1953 and exceeding the pre-war output in 1949. Agricultural development was mainly due to the state's investment of 7.4 billion yuan during the post-war three-year plan to vigorously build water conservancy projects, increase the production of agricultural machinery and fertilizers, and promote the agricultural cooperative movement in rural areas. In July 1953, various parts of the northern half of North Korea began to set up agricultural cooperatives on a trial basis, and the state provided strong legal and financial support. By the end of 1956, the proportion of cooperative farmers in the total farm households reached 80.9%, and the proportion in the total cultivated land area reached 77.9%.
The rapid recovery and development of industry and agriculture after the war created conditions for improving people's lives. National income in 1956 was 2.1 times that of 1953 and 1.5 times that of 1949 before the war. In 1956, the average salary per worker, technician, and state employee increased by 58% compared with 1953, and by 65% ??compared with 1949. While increasing the wage income of employees, the North Korean government has adopted policies such as low rents and lower retail prices of goods, which has greatly increased the actual income of the country's employees. In addition, the state has built 6.1 million square meters of housing for employees, and vigorously developed social insurance, medical care, rest and other welfare services for the people.
In rural areas, the country abolished the compulsory meat payment system in 1954. In 1956, agricultural taxes were comprehensively reduced, a fixed tax system was implemented, and all 90,000 tons of agricultural taxes and grain loans owed by farmers and 1.4 billion yuan in loans were written off. During this period, the state also reduced the retail prices of industrial products and irrigation and mechanical farming fees. [4]