- The Washington Times - Thursday, March 28, 2002

SEOUL North Korea must "readjust its economic foundations" this year and open itself up to more international trade and cooperation, the prime minister of the isolated, hunger-stricken country said in a policy statement yesterday.
Prime Minister Hong Song-nam's report to the legislature departed from the North's ruling philosophy of "juche," or self-reliance, which has guided the country of 22 million people into diplomatic isolation and aggravated a famine that has killed hundreds of thousands since the mid-1990s.
"The main thrust of this year's economic construction is to make full preparations for technical improvement and modernization of the national economy as a whole while readjusting the country's economic foundations in keeping with the practical demand," Mr. Hong said.
Delivering a report to the rubber-stamp Supreme People's Assembly at a meeting on the 2002 budget and policies, he said North Korea must "improve trade and economic cooperation and widely conduct joint ventures and collaboration with different countries and international organizations."
In recent years, North Korea has opened diplomatic ties with several European and other countries and called for more foreign trade while guarding its totalitarian regime from outside criticism.
"All the officials should become fighters devotedly defending and carrying out the party's policies with intense loyalty to the leader," Mr. Hong said, referring to the country's supreme leader, Kim Jong-il.
North Korea's economy shrank significantly after the collapse of the former Soviet Union stripped it of key trade partners and aid providers. The problem was aggravated by consecutive years of bad weather since 1995, forcing the country to depend on outside handouts to feed its people.
In January, President Bush called North Korea part of an "axis of evil," accusing the communist country of developing nuclear and other weapons of mass destruction. North Korea also remains on the U.S. State Department's list of countries that support terrorism.
The labels bar North Korea from benefiting from cheap loans from the World Bank and other international financial institutions.
The new policy statement came two days after North and South Korea announced that a South Korean envoy will travel to the North next week on a mission to rejuvenate the stalled reconciliation process on the peninsula, divided since 1945.
The 1950-53 Korean War ended without a peace treaty, and the border is sealed and heavily armed.
Also yesterday, North Korea's finance minister, Mun Il-bong, proposed a 2002 budget of roughly $10 billion, a 2.3 percent increase from last year, said the North's official Korean Central News Agency, monitored in Seoul.
Of the budget, 42 percent will be used to modernize the country's mining, agriculture, power and metal industries and improve railways. The government will allocate 14.4 percent, about $1.4 billion, to its 1.1 million-member military, the world's fifth-largest.
The North's total announced budget is less than the $12.6 billion South Korea plans to spend on its 650,000-member military alone this year. Many North Korean military units run their own farms and factories to earn cash and supply their own food.

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