N. Korea establishes new economic laws following currency change

(ATTN: UPDATES with quotes from Beijing travel company, gov't income from real
estate fees, TRIMS lead)
By Kim Hyun
SEOUL, Dec. 16 (Yonhap) -- North Korea has introduced a swathe of new laws on the
economy, including regulations on consumption, state media said Wednesday in what
appears to be an attempt to tighten control after an unpopular currency reform.
North Korea reportedly issued new banknotes with an exchange rate of 100 to one
on Nov. 30, saying the revaluation is intended to curb inflation, regulate the
free market and strengthen the socialist order.
The Korean Central News Agency (KCNA) announced further legal changes across the
economy.
"The Presidium of the Supreme People's Assembly has newly adopted and announced a
set of laws in several categories," the KCNA said. These are a real estate
management law, a law on the standard of commodities consumption and a law on the
import of general facilities, the report said.
The real estate law stipulates principles governing the registration and
utilization of real estate and payment for its use, it said. In 2006, North Korea
began collecting rental fees from individuals and organizations who cultivate
government-owned land. State media said the following year that the government
expected the de-facto tax income from the real estate rentals would increase by
15.4 percent.
The commodity consumption law lays out "legal requirements that must be observed
in the consumption of commodities," the KCNA said. Given the chronic shortage in
the supply of commodities in North Korea, the law appears to be aimed at putting
individuals' and organizations' consumption under strong scrutiny so as to curb
price hikes.
The report said the law on the import of facilities covers issues concerning such
imports for factories, schools, hospitals, ships and broadcasting stations,
stipulating requirements for planning, signing contracts, inspections, assembly
work and trial runs.
"The newly established laws have built a solid legal foundation to enhance the
socio-economic effects of (utilizing) real estate," the report said, and they
will also boost the people's economy "by lowering the levels of commodity
consumption."
North Korea's frail economy appeared to be still reeling from the drastic
currency change, after which shops were reportedly closed and market activities
significantly constrained. The government reportedly set a cap on the amount of
new bills allowed for exchange per household, but a growing backlash from the
middle-class and merchants was prompting the government to frequently change the
limit, according to reports from South Korean-based aid groups.
Contrary to the local confusion caused by the revaluation, however, it had little
impact on foreign visitors as they continue to pay in euro, said Nick Bonner, a
Briton who runs Koryo Tours, a Beijing-based company that operates tours to North
Korea for foreign visitors. About 20 people from Europe, Canada and Australia
were set to travel to North Korean inland cities in the first week of January as
the first batch of foreign tourists next year.
"That (the currency reform) is an internal problem. It has nothing to do with"
foreign visitors, Bonner said over the telephone. "Visa applications are the
same, and the rules and the regulations are the same. Nothing has changed in that
respect," a staffer with the company, Katheleen Peart, added.
hkim@yna.co.kr
(END)