[KS] North Korean budget: real numbers? and source?

Afostercarter at aol.com Afostercarter at aol.com
Fri Apr 28 06:05:16 EDT 2006

Dear colleagues,

Can anyone please assist with figures for the latest North Korean budget?

As reported by KCNA, for the fourth successive year the budget speech
on April 11 gave no solid numbers at all, only percentages.

However, two South Korean sources (below) offer a real number
which they say the North revealed in 2004 or 2005  (passages in bold); 
and which therefore can be used to calculate the amounts for subsequent 

I fear I missed that revelation. Could someone kindly tell me where and
when this figure comes from? I can find nothing on KCNA in either 2004 or 

Needless to add, there are further issues about how to compare any such
figure, since 2002's de facto deflation of the DPRK won, with the numbers
which Pyongyang used to publish - at least in aggregate - prior to July 2002.
And imputing a dollar exchange rate is a whole other can of worms,
given that multiple rates prevail. But for now, I'd just be very grateful to
know where the 2004 figures come from.

Best wishes

Honorary Senior Research Fellow in Sociology & Modern Korea, Leeds University 

Home address: 17 Birklands Road, Shipley, West Yorkshire, BD18 3BY, UK 
tel: +44(0)  1274  588586         (alt) +44(0) 1264 737634          mobile:  
+44(0)  7970  741307 
fax: +44(0)  1274  773663         ISDN:   +44(0)   1274 589280
Email: afostercarter at aol.com     (alt) afostercarter at yahoo.com      website: 
[Please use @aol; but if any problems, please try @yahoo too - and let me 
know, so I can chide AOL]



2006/04/19 20:49 KST  

N. Korean Cabinet approves US$2.9 billion budget for 2006

SEOUL, April 19 (Yonhap) -- North Korea's Cabinet on Wednesday approved the 
parliament's budget plan for 2006, about 16 percent of which is expected to be 
used on the county's military.

The country's state-run Korean Central News Agency said an enlarged plenary 
meeting of the Cabinet, chaired by its prime minister Park Pong-ju, was held in 

"The meeting discussed its agenda items on the results of the fulfillment of 
the state budget for 2005 and measures to implement the state budget for this 
year," the report said.

The country's budget plan for this year was adopted at the recently held 
fourth session of the 11th Supreme People's Assembly (SPA), the North's 
rubber-stamp legislature. It was the fourth annual session of the current members, 
called deputies, since they were elected in 2003.

Earlier KCNA reports said the SPA decided at its April 11 session to increase 
this year's expenditure by 3.5 percent from last year without providing 
specific amounts.

The South Korean government believes the North's 2006 budget is set around 
419.7 billion North Korean won (US$2.9 billion).

The communist state rarely reveals the actual size of its budget, only 
specifying an increase or decrease in its income and expenditure.

In 2004, the North said its budget income came to 337.5 billion North Korean 
won and its expenditure to 348.8 billion won. The country said last year that 
it increased its budget income by 15.1 percent and expenditure by 11.4 percent 
from 2004.

South Korea's Vice Unification Minister Shin Un-sang said on April 11 that 
the North's budget for this year is expected to top 419.7 billion won.

North Korea's Vice Premier Ro Tu-chol had earlier said that the government 
will allocate 15.9 percent of its total expenditure for national defense.

The impoverished North has depended on international handouts to feed a large 
number of its 23-million population since the early 1990s, but it continues 
to bolster its so-called military first, or Songun, policy.

The country has also faced the United States, Japan, China, Russia and South 
Korea in a nuclear standoff that erupted in late 2002 following a U.S. 
accusation that it was running a clandestine nuclear weapons program.

Five rounds of international negotiations involving the six countries have 
been held, but the talks have been stalled since November due to a North Korean 

The KCNA report said the Cabinet meeting also discussed ways to "mobilize and 
concentrate all forces on farming in the second quarter of the year, a very 
important period on which hinges the success of the year's farming."
The North continues to suffer from chronic food and energy shortages 
following nationwide droughts and floods in the 1990s, and annually requests hundreds 
of thousands of fertilizer and food aid from South Korea and international 
relief agencies.

The Koreas remain divided along a heavily-fortified border since the end of 
1950-53 Korean War. They remain in a state of war as the war ended only with a 
ceasefire, not a peace treaty.

bdk at yna.co.kr



April 19, 2006    (NK Brief No. 06-4-19-1)

NK Brief seeks to relate timely information - with succinct analytical 
commentary - on news relevant to North Korea. If you wish to receive email notice of 
new postings, submit feedback, or have any questions regarding the brief, 
please email ICNK at icnk at kyungnam.ac.kr.

On April 11, 2006, the 4th round of the 11th DPRK Supreme Peoples' Assembly 
opened and this year's budget proposal was discussed and approved, as was a 
plan of action for the 2006 economy.

Cabinet Vice Minister Ro Tu Chul presented the closure of the 2005 budget and 
introduced this year's plan. Without giving concrete figures, he announced 
that this year's earnings were expected to be 7.1 percent higher while spending 
would increase by 3.5 percent, a considerable reduction considering last 
year's growth of 15.1 percent in earnings and 11.4 percent increase in spending. 

Additionally, he announced that 2005 earnings were 0.8 percent more than 
budgeted, a 16.1 percent increase over 2004, while expenditures were 4.4 percent 
over budget. In April 2005, at the 3rd round of the 11th Supreme Peoples' 
Assembly, the 2004 budget was closed out, and it was announced that earnings 
totaled 337.546 billion won and expenditures amounted to 348.807 billion won. 

Based on these numbers, the 2005 budget would have amounted to 388.59 billion 
won, and this year's budget would total 419.7 billion won, or 2.935 billion 

Vice Minister Ro also stated that 78.1 percent of funds for this year would 
be allocated to the central budget, while 21.9 percent was slated for regional 
Regarding taxes, business income taxes as well as gains in state-run 
enterprises rose by 7.2 percent while collective organizations' earnings rose 23.3 
percent, earnings from fixed assets depreciated 1.8 percent, real estate usage 
fees accounted grew 12 percent, social insurance fees 141 percent, and price 
increases on property sales 1.7 percent.

Expenditures were announced as follows: the agricultural sector was expected 
to grow 12.2 percent; electricity, coal, metal industries and rail 
transportation, 9.6 percent; and in an effort to continue on a path of scientific 
technological development, this sector's budget would grow by 3.1 percent. 

As was the case in 2005, the defense budget-as announced-comprises 15.9 
percent of the overall budget, or 66.732 billion won (466,700 million USD). 
Cabinet Minister Pak Pong Ju stressed at this assembly the important 
opportunity for conversion in the country's economic development, specifically naming 
resolution of the food problem, scientific and technological strategy, the 
strengthening of import/export resources along with integrated management of 
regional industries, expanding foreign economic exchanges, broadening economic 
management in all sectors, restructuring the education system, and strengthening 
the cabinet's role and responsibilities as the main focus of the cabinet in 

Experts agree that this session of the Supreme People's Assembly was focused 
on expansion of "self-reliant" and scientific economic activity, and that the 
DPRK is focusing on economic reforms based on science and technology.

(1) Based on an exchange rate of $1=143 (DPRK) won.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://koreanstudies.com/pipermail/koreanstudies_koreanstudies.com/attachments/20060428/cd843cbf/attachment.html>

More information about the Koreanstudies mailing list