Socio-Economic System


Self-reliant National Economy

After liberation, the DPRK government conducted the building of the self-reliant national economy from the beginning of constructing a new society and it stepped the work up on a full-scale after the Korean War. President Kim II Sung set forth the main line of economic construction; that is to prioritize heavy industry and seek simultaneous development of light industry and agriculture and wisely led to embody it at every stage of the economic construction.

The country had to start from scratch in the postwar time since everything was destroyed. It is since then on the Korean people rebuilt the factories in a short span of time and produced steel by their own efforts, and manufactured the huge machine tools, large scale excavators, heavy trucks, electric locomotives, large ships, 10 000-ton¬level of huge press and other huge machines and precision machines.

Thanks to the successful implementation of the task of overall technical revolution relying on its own powerful heavy industry bases, various sectors of the national economy were put on a firm footing of modern technology and the economy was equipped with a well-streamlined modern national self-reliant economy. And many sided, modernized system of independent national economy which relies mainly on its own materials and fuels has been completed.

General Kim Jong Il inherited the main line of building a socialist economy which President Kim Il Sung put forward and maintained consistently and develop in accordance with the changed reality to present the new line of giving priority to the development of national defence industry while simultaneously developing light industry and agriculture for economic construction in Songun era. The Korean people regarded this line as the powerful weapon for building a great prosperous and powerful socialist country and did their best to realize this so that they made unprecedented great leap and great innovation in economic construction.


Socialist Ownership

The DPRK is the socialist country that socialist ownership of the means of production has been regarded as an economic foundation. The socialist ownership of the means of production, the economic foundation of the republic consists of state ownership and the ownership of cooperative organizations.

State ownership means ownership by the entire people and there is no limitation in the object of state ownership. All natural resources, main factories and enterprises, harbours, banks, transportation means and communication organizations are only owned by the state.

The ownership of cooperative organizations is the collective ownership of the working people in the cooperative economy. The cooperative organizations can own land, drought animals, farming tools, fishing boats, buildings, main factories and enterprises.

State ownership was realized through the nationalization of major industries and expanded rapidly with the development of state-run industry. Ownership by cooperative organizations was realized through socialist reforms on production relations strengthened and developed fast according to the development of agriculture.


Management of Socialist Economy

The government of the DPRK leads and manages the economy by the principle of right combination between political leadership and economic and technical guidance, the unified leadership of the state and creativity of every unit democracy and unified control, the political and moral incentives and material incentives.

The unified and detailed planning, created by President Kim Il Sung and intensified and developed by General Kim Jong Il, is the best scientific and revolutionary system of planning and method. The unified planning prevents in advance the departmentalism and localism of the producers and subjectivism and bureaucratism of the state organs by combining the state's centralized guidance with the mass line so that it helps to draw up dynamic and scientific plan.

The detailed planning helps to grant the whole and detailed balance of national economy by calculating every element of production concretely and enabling all the branches to come into the finest details in managerial activities in a nationwide scale. Thus, it helps to eliminate the factors of imbalance and spontaneity in economic development and develop national economy rapidly.


Labour System

The socialist labour system in the DPRK is the one that is centered on the popular masses, and it provides the working people with independent and creative labor lives free from exploitation and oppression. In the socialist system of the country where people are masters of the state and society, every working-age citizen has the right to labor on equal terms irrespective of nationality, sex, age, social affiliation and religious belief.

The rights to labor include free choice of occupations, offering stable jobs and labor conditions and rewards for labor according to quality and quantity of labor. In the country where unemployment was gone long ago, the right of a citizen to labor has been proclaimed and substantially provided .by law. The labor law which was proclaimed in June, Juche 35 (1946) introduced a 8-hour labor regime and was reinforced by the Socialist Labor Law newly adopted in April, Juche 68 (1979). The daily labor span is also 7 hours or 6 hours according to the conditions of heavy and special labors.

The socialist reward-for-labor regime is materialized through salaries, bonus and bounty according to the quality and quantity of labor and through distribution by working-day in the cooperative economy. Under-age child labor is totally prohibited in the country.  


The State and Social Benefits

Apart from gains by labor, the people enjoy enormous additional benefits from the state thanks to socialist policies enforced by the Party and the government.

Food Supply Benefit
The state supplies food to workers, office employees and even newly-born babies. The state purchases rice at the price of 189 won per kg and corn at 96 won per kg from cooperative farms and sells rice at 46 won and corn-processed noodles at 33 won.

Benefits from Providing Houses
The state is involved in building and allotting dwelling houses free of charge, and the people are ignorant of dwelling tax. It is the only country that builds and allots dwelling houses for working people and bears most of the utility costs. The state builds rural dwelling houses for nothing and never receives rentals from the cooperative farmers.

Benefits from Free Medical Care
The country enforced free medical care for workers, office workers and their dependents since January Juche 36 (1947). Universal free medical care was enforced since January, Juche 42 (1953) and the complete, universal free medical care since February, Juche 49 (1960).
Thus, the state bears totally the expenses of medical checkups and treatment, bed and board in hospitals, medicines, and even travel costs to and from sanatoria.

Benefits from Free Education
The country enforced universal free education at all educational institutes since Juche 48 (1959). Today the country offers the complete 11-year compulsory free education which enables from kindergarteners to university students to study free of charge. Even college and university students are learning supported by scholarships from the state.

Benefits from Tax Exemption
Thanks to the popular policies pursued by the Party and the government of the Republic, the country eliminated the devilish tax regime enforced by the Japanese imperialists, landlords and capitalists and gradually reduced some taxes which led to abolishing the agricultural tax in kind in Juche 55 (1966) and a small amount of income taxes paid by workers and office workers in April Juche 63 (1974), thus completely eliminating the tax regime, a legacy of the old society.

Benefits from Social Insurance and Social Security System
Female workers take 5 months of maternity leave, and in case of having more than 3 children, receive salaries equivalent to 8 hours' work even though they work for 6 hours. When workers become physically impaired due to diseases, wounds and other factors, they are provided with relevant subsidies, treatment and living conditions from the state. Old pensioners (men over 60, women over 55) receive pensions and old people and orphans devoid of care receive living conditions from the state.