North Korean Policy Elites - Defense Technical Information Center

Second, the principal objective of the government
administration reform was to cut down government
expenditures in order to save money and increase
government efficiency through greater centralization of
functionally related government bureaucracies at the center
and through the delegation of responsibilities to local actors.
The solution was to create so-called “super-ministries” and
“super-commissions” under the newly established Cabinet
of Ministers, and to reduce the central government
workforce by almost thirty percent in five years. The
number of party functionaries at the workplace was reduced
drastically (see Figure 1). The result turned out to be a
significant decrease in central government and party control
over local governments and economic actors and a
noticeable reduction in government budget deficits.
Figure 1. Party Functionaries in the Workplace
Third, the army-first policy (songun chongch’i or AFP) expanded dramatically the
military’s role in North Korean society, economy, and politics. The “military sprawl” under the
army-first politics, army-first policy, army-first leadership, and army-first ideology made the
Korean People’s Army not only the military defender of the nation and the principal guarantor of
regime survival, but also an important economic actor in agriculture, infrastructure construction,
R&D, professional education, arms sales and hard currency earning, and the major ideological
educator, socializer of the youth, and general backbone of the society, as well as the principal
veto power in all policy deliberations.
Fourth, in just three years, Kim Jong Il had three summits with Russian President Putin,
two summits with Chinese President Jiang Zemin, a summit with ROK President Kim Dae-Jung,
a summit with Japanese Prime-Minister Koizumi, and hosted visiting U.S. Secretary of State
Albright in Pyongyang.
Fifth, to name just a few of the most important economic reforms, the so-called “July
2002 economic improvement measures” included (1) partial liberalization of prices and wages in
all sectors of the national economy, (2) elimination of rice subsidies and transformation of
farmers’ markets into district markets, as well as the legalization of market sales of agricultural,
industrial, and consumer goods, (3) government blessing for the complete monetarization of the
economy, including the Public Distribution System, various social entitlements, and residential
and industrial utilities services, (4) quasi-privatization of residential housing and farming lots, (5)
official licensing of small private enterprises, (6) growing de-facto privatization of medium-size
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