North Korea’s regional trading companies are merging with each other as the country’s authorities stress the importance of the “cabinet-centric system” in foreign trade, a source in the country recently reported.
Samhwa Trading Company, which was attached to the land management department of South Pyongan province, was ordered last month to merge under the ministry of land protection and environment, the state said on Tuesday. source, based in the province, to Daily NK. The trading company is currently in the process of finalizing the change of affiliation.
In addition, the source told Daily NK that the province’s people’s committee commerce management office is handling the merger of several trading companies attached to the commerce departments at the municipal and county levels in the province. During this process, the provincial office forces regional branches or companies that have not produced “results” to close.
These efforts to integrate trading companies appear to be an attempt by the North Korean authorities to establish centralized management of foreign trade based on the Cabinet-centric system, thereby preventing money from flowing into the pockets of individuals. or agencies with special privileges, including the Workers’ Party of Korea, the Korean People’s Army, the Ministry of State Security and the Ministry of Social Security.
In other words, authorities are wary of so-called “work unit specialization,” which refers to powerful agencies using their special status to privatize wealth.
The merger of trading companies also suggests that the state is establishing a system by which the government can control all imports and exports, as well as profits from trade, as part of urgent efforts to return to the North Korea’s former state-controlled trading system.
Mergers are an essential part of economic activity. Nevertheless, North Korea should not abandon the principle that division of labor and specialization are the basic conditions for economic development. The North Korean economy has indeed experienced failures in the past under a unitary and rigid economic system that restricted any economic decentralization or commercial freedom.
The global economy has grown through independent economic activity that allows individuals and businesses to plan for themselves and markets and prices to adjust for themselves. Moreover, the core of a free economy is an “exchange economy” made up of corporations.
We have seen the success of a liberal model that emphasizes individual freedom and self-responsibility, private property, minimum social welfare that protects the law and rewards performance, free entrepreneurship combined to the state and the value of competition.
It is therefore imperative that a social balance be achieved through the freedom of the market and the intervention of the State to ensure the good economic activity of the North Koreans. It is also necessary to establish an independent and productive economic order, which is also consistent with social justice.
In this regard, guaranteeing the autonomy of individual activities in foreign trade is an indispensable element for the creation of wealth at the national level and for the protection of the right to freedom of individuals.
The North Korean cabinet should not overlook the fact that market activity is intensifying in a system in which supply and demand for goods are determined by the market itself, and the fact that such economic conditions are the prerequisite for ensuring the “happiness of the people”. ”
Translated by Youngheon Kim
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