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North Korea Planning
Although general economic policy objectives are decided by
the Central People's Committee (CPC), it is the task of the State
Planning Committee to translate the broad goals into specific
annual and long-term development plans and quantitative targets
for the economy as a whole, as well as for each industrial sector
and enterprise. Under the basic tenets of the 1964 reforms, the
planning process is guided by the principles of "unified
planning" (ilwnhwa) and of "detailed planning"
(saebunhwa).
Under "unified planning," regional committees are established
in each province, city, and county to systematically coordinate
planning work. These committees do not belong to any regional
organization and are directly supervised by the State Planning
Committee. As a result of a reorganization in 1969, they are
separated into provincial planning committees, city/county
committees, and enterprise committees (for large-scale
enterprises).
The various planning committees, under the auspices of the
State Planning Committee, coordinate their planning work with the
existing planning offices of the various economy-related
government organizations in each of the corresponding regional
and local areas. The system attempts to enable the regional
planning staffs to better coordinate with economic establishments
in their areas, which are directly responsible to them with
regard to planning, as well as to communicate directly with staff
at the CPC. "Detailed planning" seeks to construct plans with
precise accuracy and scientific methods based on concrete
assessment of the available resources, labor, funds, plant
capacities, and all other necessary information.
There are four stages in drafting the final national economic
plan. The first stage is collecting and compiling preliminary
statistical data. These figures, which are used as the basic
planning data on the productive capacities of various economic
sectors, originally are prepared by lower level economic units
and aggregated on a national level by respective departments and
committees. Simultaneously, the regional, local, and enterprise
planning committees prepare their own data and forward them to
the CPC. Through this two-channel system of simultaneous but
separate and independent preparation of statistical data by
economic units and planning committees, the government seeks to
ensure an accurate, objective, and realistic data base unfettered
by local and bureaucratic bias. The second stage is preparing the
control figures by the CPC based on the preliminary data in
accordance with the basic plan goals presented by the Central
People's Committee. In the third stage, a draft plan is prepared.
The draft plan, prepared by the CPC, is the result of
coordinating all draft figures submitted by the lower level
economic units, which, in turn, base their drafts on the control
figures handed down from the committee. In the fourth stage, the
CPC submits a unified national draft plan to the Central People's
Committee and the State Administration Council for confirmation.
After approval by the Supreme People's Assembly, the draft
becomes final and is distributed to all economic units as well as
to regional and local planning committees. The plan then becomes
legal and compulsory. Frequent directives from the central
government contain changes in the plan targets or incentives for
meeting the plan objectives.
Although the central government is most clearly involved in
the formulation and evaluation of the yearly and long-term plans,
it also reviews summaries of quarterly or monthly progress.
Individual enterprises divide the production period into daily,
weekly, ten-day, monthly, quarterly, and annual periods. In
general, the monthly plan is the basic factory planning period.
The success of an economic plan depends on the quality and
detail of information received, the establishment of realistic
targets, coordination among different sectors, and correct
implementation. High initial growth during the Three-Year Plan
and, to a lesser extent, during the Five-Year Plan contributed to
a false sense of confidence among the planners. Statistical
overreporting--an inherent tendency in a economy where rewards
lie in fulfilling the quantitative targets, particularly when the
plan target year approaches--leads to overestimation of economic
potential, poor product quality, and eventually to plan errors.
Inefficient utilization of plants, equipment, and raw materials
also add to planning errors. Lack of coordination in planning and
production competition among sectors and regions cause imbalances
and disrupt input-output relationships. The planning reforms in
1964 were supposed to solve these problems, but the need for
correct and detailed planning and strict implementation of plans
was so great that their importance was emphasized in the report
unveiling the Second Seven-Year Plan, indicating that planning
problems persisted in the 1980s.
Data as of June 1993
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