Countries of the World/COUNTRYS.BIN/dp/0266/02664.txt

Text File | 1991-06-25 | 38KB | 618 lines

$Unique_ID{COW02664}
$Pretitle{281}
$Title{North Korea
Chapter 3B.   Industry}
$Subtitle{}
$Author{Stephan B. Wickman}
$Affiliation{HQ, Department of the Army}
$Subject{production
system
government
management
north
plan
factory
industrial
work
major}
$Date{1981}
$Log{Figure 17.*0266401.scf
Figure 19.*0266403.scf
Figure 20.*0266405.scf
}
Country:     North Korea
Book:        North Korea, A Country Study
Author:      Stephan B. Wickman
Affiliation: HQ, Department of the Army
Date:        1981

Chapter 3B.   Industry

     The industrial sector has benefited from Kim's policies. Over 50 percent
of state investment went to the industrial sector during most of the 1950s and
1960s, and new industrial plants and equipment accounted for 49 percent of
state investment during the Six-Year Plan. As a result, industry's share of
the combined total of gross agricultural and industrial output (see Glossary)
climbed to well over 90 percent in 1980.

     At the start of the 1980s the country had a variety of industries,
ranging from mining to textiles manufacturing, located in nine major
industrial centers. The government also had expanded the transportation and
communications networks and increased the utilization of domestic energy
resources. Per capita supplies of many industrial items were comparable to
those of many of the world's middle-income countries, if not to the most
technologically advanced nations.

     At the same time, some industries have prospered at the expense of
others, and bottlenecks in key sectors have not been uncommon. Like the Soviet
Union, North Korea concentrated on heavy industry first, while investing only
modestly in the light and consumer goods industries. Additionally, in spite of
strong financial support for machinery manufacturing and numerous
infrastructure projects, problems in the transportation, power, and mining
sectors constrained growth in the 1970s. Uneven supplies of capital investment
caused some of these bottlenecks, and other problems resulted from
inefficiencies in the management system. Of these sources of economic strain,
the ability of the government to match managerial and technological expertise
to the growing level of economic output seemed most fundamental to the future
performance of the economy. As of 1981, however, it was impossible to predict
any widespread reformation of the management system.

Performance of Major Sectors

     Large gaps and inconsistencies in official statistics made it impossible
to calculate the sectoral distribution of industry in 1981. In 1965, when data
was last available for several sectors, the machinery manufacturing and metal
processing industries (the "engineering sector") had made up about 29 percent
of the value of industrial production. The next largest shares in the total
were 17 percent for textile manufacturing and 9 percent for the food
processing and luxury goods industries; the remaining shares were unknown.
Although the production of consumer goods seemed to become relatively more
important in the 1970s, North Korea continued to devote most of its economic
resources to the production of minerals, metals, and heavy machinery. In fact,
most industry was located around the major mining and machinery manufacturing
centers that formed the focal points of the transportation and communications
networks (see fig. 18).

[See Figure 17.: National Budget Expenditures, 1971 and 1978 Source: Adapted
from Kuktong Munje Yon'guso, Pukhan chonso: 1945-1980, Seoul, 1980, p. 335.]

Mining and Metal Processing

     The economy relied to a considerable degree on the extraction and
processing of its many mineral resources, of which the most important was
coal. The more than forty anthracite mines in operation in 1979 combined to
produce an estimated 34.6 million tons. Production of the less abundant brown
coal and lignite was around 8.6 million tons that year. The largest anthracite
mines were situated in the North and South P'yongan provinces and in Kowon
County in South Hamgyong Province. The type of anthracite most commonly
extracted was a fine powder, ranging in grade from 4,000 to 6,000 kilogram
calories. The estimated production of 43 million tons was less than the total
capacity of the mines, which was reported to be 50 million tons per year. This
underutilization of capacity was related to bottlenecks in the transportation
sector reported in the late 1970s. Nevertheless, by all accounts and
estimates, coal production was increasing at a fairly steady rate throughout
most of the decade.

     Despite increases in coal production, demand was also rising,
particularly since North Korea had no known oil or gas reserves. According to
one South Korean estimate, household use accounted for about 41 percent of
demand, industrial energy for 31 percent, power production for 22 percent,
and miscellaneous uses for the remainder. The government's plan to increase
the production of steel during the 1980s would require more coking coal. Since
North Korea had very little coking-grade coal, imports would probably
increase.

     Iron ore production continued to be important for industry. By foreign
estimates, the rate of growth trailed off in the 1970s, but annual output
increased to about 7 million tons in 1979. During the Six-Year Plan the
government invested in expansion projects at the Tokhyon and Songam mines and
built at least one new mine in South Hwanghae Province. The goal for the
Second Seven-Year Plan was to expand the mining facilities at Musan near
Ch'ongjin, where iron ore deposits were reputed to be 1.3 billion tons. Total
production was supposed to reach 16 million tons a year by 1984.

     Multimineral mine fields were scattered throughout the peninsula and
contained deposits of nonferrous metals, such as gold, silver, copper, lead,
and zinc, as well as important nonmetals like magnesite, graphite, fluorite,
pyrite, salt, and talc. The Tanch'on and Komdok mines in South Hamgyong
Province were the two largest mining areas and were connected by a conveyor
belt and an electric railway line. The Tanch'on mine was said to contain 3.6
billion tons of magnesite, the world's largest such deposit. The installation
of a revolving calcinating furnace imported from the Federal Republic of
Germany (West Germany) was to greatly increase the production of magnesia
clinker, a major export commodity. Metals refineries were located at Namp'o,
Hungnam, Munp'yong, Haeju, and Tanch'on. Actual output of the major
nonferrous metals and other minerals was a matter of conjecture in 1980 (see
table 5, Appendix).

     As Kim inveighed in 1978, "one of the most serious shortcomings revealed
in the economic work during the Six-Year Plan was a failure to keep the mining
industry well ahead of the processing industries." The government has set
about the task of pushing the mining sector ahead in the Second Seven-Year
Plan. Investments in coal and other types of mining accounted for over
one-third of total industrial investment in 1979 and 1980, and the country was
not likely to change this course of development until mineral production
matched the total processing capacity.

Manufacturing

     Kim has consistently emphasized the machine-building industry, but at the
end of the 1970s complained that it fell short of playing its full part as
"the heart of industry." According to government reports, the value of
production from the machine-building sector (probably including some
semifinished metals) accounted for 33.7 percent of the gross industrial
output value in 1980.

     The production of crude and semifinished steel was related most obviously
to supplies of iron ore, but improvements of steelmaking plants and equipment
were no less important. During the Six-Year Plan the government outfitted the
Kimch'aek, Hwanghae, Kangson, and Songjin steel plants with remote control
facilities or closed-circuit monitors to improve efficiency. Data on steel
production were conspicuously lacking during most of the 1970s, but the output
of crude steel was