Business Groups Run by the Workers' Party of Korea

• Published in: Ajia Keizai Vol. 63; no. 1; pp. 2 - 20
• Main Author: Nakagawa, Masahiko
• Format: Journal Article
• Language: Japanese
• Published: Institute of Developing Economies, Japan External Trade Organization 15.03.2022
• ISSN: 0002-2942; 2434-0537
• DOI: 10.24765/ajiakeizai.63.1_2

The purpose of this study was to clarify the characteristics and activities conducted by the enterprise groups that are run by the Workers' Party in the Democratic People's Republic of Korea, by examining their formation process, composition, and relationship with the general economic sector based on state planning. Regarding the formation of party-run enterprise groups, in the 1960s, the party-run trading company Daesong Trading Corporation was established, and factories in the general economic sector such as Sariwon Towel Factory were put under the direct management of the party. In addition, in the 1970s, the enterprise groups Daesong, Kungang, Rungrado, and Ponghwa were formed under the management of Room 39 of the Finance Management Department, the Pyongyang Committee, and the Light Industry Department of the Workers' Party with the aim of attracting foreign investment. Through an analysis of these organizations and the activities of the corporate groups, it was confirmed that the export of gold ingots, matsutake mushrooms (Tricholoma matsutake), and red snow crabs were monopolized by these entities. However, the author refutes the conventional view that the party-run enterprise groups unilaterally absorbed resources from the general economic sector, citing the following facts: Sonhung Foodstuff Factory, which was under the management of a party enterprise group, was transferred to the general economic sector; the campaign funds of the Administration Department of the Workers' Party were invested in poultry farms run by the state; and the construction of the Pyongyang Mechanical Pencil Factory and Sangwon Cement Complex were financed with activity funds from Room 39 of the Finance Management Department. These facilities continue to make productive contributions to the state economic program today.