THE CONSTRUCTION INDUSTRY OF NORTH KOREA 1954-56
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Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP79R01141A000900070002-2
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S
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Document Creation Date:
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Document Release Date:
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Case Number:
Publication Date:
October 14, 1957
Content Type:
REPORT
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N? 78
THE CONSTRUCTION INDUSTRY
OF NORTH KOREA
1954-56
CIA/RR 105
14 October 1957
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IT
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Sees. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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THE CONSTRUCTION INDUSTRY OF NORTH KOREA
1954-56
CIA/RR 105
(ORR Project 47.1737)
Office of Research and Reports
S-E-C-R-E-T
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Page
Summary and Conclusions . . . . . . . . . . . . . . . . . . . 1
I. Introduction . . . . . . . . . . . . . . . . . . . . 3
II. Organization of the Construction Effort . . . . . . . 4
III. Construction Under the Three Year Plan (1954-56) ? . 5
A. Investment in the Construction Program . . . . . . 5
B. Aid by the Sino-Soviet Bloc to the Construction
Effort . . . . . . . . . . . . . . . . . . . . . 9
C. Construction in Major Sectors . . . . . . . . . . . . 10
1. Industry . . . . . . . . . . . . . . . . . . . . 11
2. Power Facilities . . . . . . . . . . . . . . . . 12
3. Transportation Facilities . . . . . . . . . . . . 13
a. Railroads . . . . . . . . . . . . . . . . . . 13
b. Highways . . . . . . . . . . . . . . . . . . 15
4. Housing . . . . . . . . . . . . . . . . . . . . . 15
5. Agriculture . . . . . . . . . . . . . . . . . . . 17
A. Supply and Productivity . . . . . . . . . . . . . . . 18
B. Education and Training . . . . . . . . . . . . . . . 20
Appendixes
Appendix A. Status of Selected Construction Projects in
North Korea, 1956 . . . . . . . . . . . . . .
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1.
Distribution of Investment in Capital Construction
in North Korea During the Three Year Plan, 1954-56 . . .
6
2.
Index of the Volume of Investment in Capital Construction
in North Korea, 1953-55 . . . . . . . . . . . . . . . .
8
3.
Estimated Aid by the Sino-Soviet Bloc to North Korea,
1954-64 ........................
4.
Index of Increases in Number of Workers and Office Employees
in Industry and Construction, 1952-55 . . . . . . . . .
19
5.
Index of Increases of Labor Productivity in North Korea,
1954-56 .......... ............
19
6.
Production of Cement in North Korea, 1949 and 1954-57
22
7.
Status of Selected Construction Projects in North Korea,
.1956 ..........................
25
Figure 1. North Korea: Selected Construction Projects Inside
Receiving Sino-Soviet Bloc Aid . . . . . . . . . Back Cover
Figure 2. North Korea: Transportation and Major Inside
Hydroelectric Power Facilities . . . . . . . . . Back Cover
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CIA/RR 105 S-E-C-R-E-T
(ORR Project 47.1737)
THE CONSTRUCTION INDUSTRY OF NORTH KOREA*
1957756
After the Korean War, three successive programs were initiated
to reconstruct and expand the economy of North Korea. The first
program, during 1953, emphasized rehabilitation work; the second,
a Three Year Plan of reconstruction, was carried on during 1954-56;
and the third, a Five Year Plan of development and expansion of
the economy during 1957-61 (provisions of which have not yet been
announced) was to be based on the accomplishment of the first two
programs.
In 1956, at the completion of the Three Year Plan, the
construction industry of North Korea had partly rehabilitated
the war-devastated economy. Without substantial aid from the
Sino-Soviet Bloc, even this amount of progress in rehabilitation
and construction could not have been achieved.
By the end of 1956, industry was rehabilitated to the point
where parts of plants were in operation and production was
approximately at the 1949 level except in the chemical and fuel
industries. The cement industry was partly rehabilitated, with
production slightly exceeding the 1949 level, but other building
materials lagged behind the demands of the construction industry.
Power facilities had not attained the 1949 level, and reconstruction
work needed to be carried into the period of the Five Year Plan.
Railroads were rehabilitated, and two new rail lines had been built
to relieve bottlenecks on the only east-west route. Track conditions,
however, remained inferior to those of 1949. The main effort in
rail construction was being directed to the rehabilitation of
electrified lines, with the goal of completing this work by 1961.
Highways in the south near the 38th parallel were rehabilitated,
but no new highway construction of any importance was under way.
The agricultural area was still undergoing development through
* The estimates and conclusions contained in this report represent
the best judgment of ORR as of 1 July 1957.
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reconstruction of irrigation systems. The amount of housing
rehabilitated and constructed was inadequate both in respect to
quality and quantity.
It is evident that construction projects in all sectors of the
economy were planned by Soviet advisers attached to administrative
organs responsible for these projects. The implementation of
planning, however, was hampered by a loosely organized construction
effort. Because construction projects were not under centralized
control, there was little standardization of construction design,
supplies of labor and construction materials were often poorly
allocated, and construction machinery and equipment were not utilized
-to the fullest extent. The reorganization at the beginning of 1957,
which placed construction of all types under the Ministry of
Construction, probably will tend to correct these deficiencies and
increase the rate of construction.
North Korea has suffered from a critical shortage of construction
materials and equipment needed to carry out a large-scale rehabilitation
program. Although the Sino-Soviet Bloc supplied a large amount of
these materials to the construction industry, improper use of this aid
slowed the rate of construction. A short supply of skilled labor and
technicians caused construction materials to be wasted and construction
equipment to be left idle and abandoned at many construction sites
through inexperience and improper supervision. Consequently, the
services of Bloc technicians were necessary on major construction sites
to insure the progress made in rehabilitation by 1956.
A major problem of the construction industry was the lack of an
adequate supply of labor. Chinese Communist army units and North
Koreans from all segments of the population were recruited to augment
the labor force. Efforts to create a permanent construction labor force
were blocked by the channeling of construction labor into production
enterprises as rehabilitation progressed. Training programs for
construction labor appreciably increased neither the number of skilled
workers nor the level of productivity of labor by the end of 1956.
The transmission of construction goals of the Three Year Plan into
the period of the Five Year Plan demonstrates the failure of the construc-
tion industry to rehabilitate the economy to the levels planned by the
end of 1956. Aid from the Sino-Soviet Bloc is declining, and no further
aid approaching the 1954-56 level has been announced. At the present
time, therefore, North Korea is faced with the necessity of relying on
its own resources for carrying out construction in the Five Year Plan.
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I. Introduction.
During the 40 years of Japanese control before World War II,
Korea emerged from a state of handicraft industry and economic
feudalism to a position among the more advanced industrial areas
of Asia. As a member of the Japanese colonial empire, Korea was
developed as a part of the Japanese economy and not as a self-
sustaining unit. Under Japanese sponsorship, capital was invested
in the construction and development of heavy and light industry,
hydroelectric power, mining, and agriculture for the purpose of
fulfilling the requirements of the Japanese economy. Railroads were
constructed mainly along the coasts to facilitate the movement of
traffic through the ports. Japanese technicians and managers held
the key positions in the economy, and native Koreans constituted
the labor force. Under the Japanese, a relatively small Korean
labor force of skilled and semiskilled workmen and a much larger
force of unskilled workmen was created. At'the end of World War II,
nearly all of the Japanese engineers, technicians, and skilled
laborers were repatriated. This left Korea seriously deficient in
trained technical personnel in all sectors of the economy.
The main industrial base and most of the natural resources were
located north of the 38th parallel after the division of Korea in
1945. During its occupation by the USSR in the period 1945-48, North
Korea inaugurated a program of industrial reconstruction* to repair
the relatively slight damage from World War II. The program followed
previous Japanese policy in that it was closely integrated with and
orientated toward the economy of the occupying power. The rehabilitation
of factories, railroads, and mines that had existed before the war
and the emphasis on heavy industry were all directed toward meeting
the requirements of the USSR. In March 1949 the USSR granted North
Korea long-term credits amounting to 222 million rubles (Us $55.5
million)** for the purchase of machinery, equipment, and industrial
* In this report, four types of additions to production capacity
are distinguished, as follows: (1) rehabilitation -- the restoration
of previously existing capacity; (2) reconstruction -- rehabilitation
plus some additional expansion beyond previous capacity; (3) expansion --
additions to a given level of capacity not involving rehabilitation; and
(4) new construction.
** The conversion rate at the official exchange rate is 4 rubles to US
$1, which probably overstates the dollar value of Soviet aid by 100 percent.
Dollar values are given in US dollars throughout this report.
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raw materials for the reconstruction program. I/* Soviet engineers
and technicians planned and supervised construction projects in which
Koreans made up the unskilled labor force. Some Korean industrial
cadres were either trained on the job or in pewly instituted technical
schools, and some cadres were sent to the USSR and to other Sino-
Soviet Bloc countries for training.
The.Korean War rendered the industrial ~sector of the North Korean
economy more than 65 percent inoperable. J It is estimated that the
damage suffered by the economy amounted to about 420 billion won 3/
(US $3.5 billion),** much greater than that suffered as a result of
World War II. Because of extensive war damage, North Korea instituted
three successive programs to reconstruct and expand the economy. The
first program was one of rehabilitation work carried out in 1953 in
all industries preliminary to the second program. The second program,
the Three Year Plan (1954-56), provided for rehabilitation and
reconstruction work and envisaged the outstripping of the 1949 level
of production in most sectors of the economy. The third program, the
First Five Year Plan*** (1957-61), although unpublished, was to be
based on the results achieved during the post-Korean War period and,
according to announcements made in 1957, will continue many of the
goals planned for fulfillment under the-Three Year Plan.
II. Organization of the Construction Effort.
The administration of the construction industry in North Korea
has undergone at least two important organizational changes since
1953, both of which were the result of the government's lack of
experience in planning and administration. At the beginning of the
reconstruction period in 1953, 5/ the State Construction Commission
was created to carry out general rehabilitation activities and was
made directly responsible to the Cabinet. Even after the creation
of this special commission, however, each ministry continued to be
responsible for its own construction projects. The jurisdictional
50X1
** The conversion rate is 120 North Korean won to US $1 obtained on
the basis of the following cross rates which prevailed in 1954-55: 4
rubles equal US $1, and 30 won equal 1 ruble. V
*** Hereafter referred to as the Five Year Plan.
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relationship which existed between the ministries and the commission
with regard to responsibility for construction is not clear. Construction
trusts* were established under the State Construction Commission and
the ministries, and local construction trusts were established under
the peoples committees of the provinces and of the cities of
P'yongyang and Kaesong.
After the first year of the Three Year Plan, an administrative
change occurred which indicated that this incongruous organization with
its disparate economic functions was not effectively implementing the
reconstruction program. In January 1955 the Ministry of Construction
was established, and the functions of the State Construction Commission
were transferred to this Ministry. / Construction trusts continued to
exist under the jurisdiction of several ministries and local organiza-
tions.
At the beginning of 1957 a further reorganization of the construction
industry occurred, with the result that control over construction
activities now appears to be more centralized and more efficient. The
provincial and local al construction trusts were merged under the Ministry
of Construction. L Industrial construction projects formerly under the
jurisdiction of other ministries were placed under the Ministry of
Construction. Construction units in each province were merged into a
single provincial construction trust under the Ministry of Construction,
with headquarters in the capital city of the province. Some munici-
palities are apparently equal in status to provincial trusts under the
Ministry of Construction. For example, in the city of P'yongyang, five
new construction trusts have been created from previously existing units.
These new trusts are responsible for construction projects in their
respective districts.
III. Construction Under the Three Year Plan (1954-56).
A. Investment in the Construction Program.
In early 1957, North Korea announced that during the period
of the Three Year Plan a total of 80.6 billion won (us $672 million) was
invested in rehabilitation and capital construction projects in all
* A trust is an administrative organ responsible for the allocation of
resources to the enterprises under its control and for the supervision
of construction projects -- it acts as an intermediary between the
ministry and the construction site.
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sectors of the economy. J This amount was 1.8 billion won in excess
of the amount planned to be invested during the period of the Three
Year Plan. The distribution of investment in capital construction*
in the Three Year Plan, 1954-56, is shown in Table 1.
Distribution of Investment in Capital Construction in North Korea
During the Three Year Plan a'
1954-56
Sector
Total Investment
(Billion Won)
Percent of Total
Investment
Industry
39.9
Agriculture
7.4
Transportation and
communications
10.6
Commercial and public
catering
1.0
Subtotal
58.9
73.1
Nonproductive sector J
21.7
26.9
Total
80.6
100.0
a. Derived from 10 .
b. In Communist terminology, all expenditures for social
overhead, such as those for housing, hospitals, and education, are
considered to be nonproductive expenditures.
* Capital construction figures include two primary components of
investment: that in construction-installation work and that in
production machinery and equipment. The state of statistical reporting
in North Korea is at such a low level that these two primary compo-
nents of investment in capital construction have not been differ-
entiated. Their percentage relationships are probably based on the
Soviet-Chinese Communist model of 52 to 60 percent for construction-
installation work and 32 to 38 percent for machinery and equipment.
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Of the total of 39.9 billion won (Us $332.5 million) invested
in industry, 32.4 billion won were for heavy industry and 7.5 billion
won were expended on light industry. 11 Construction of water
conservancy projects accounted for 4.2 billion won (US $35 million)
of the total investment of 7.4 billion won in agriculture. L2/ The
21.7 billion won (US $180.8 million) invested in the so-called non-
productive sector of the economy were for the reconstruction of housing,
educational, cultural, and public health facilities and of public
buildings in urban areas.
The volume of investment in capital construction for 1949
and 1953-55 is shown in Table 2.* An analysis of the investment
relationships implicit in Table 2 is helpful in reconstructing the
pattern of changing demands placed upon the resources of the
construction industry in 1953-55.
Comparing 1953 with 1949, the increase in investment for
industry, agriculture, and transportation and communications was much
greater than that for nonproductive construction. This distribution
indicates the choice that was made in the immediate post-Korean War
period to mobilize the construction resources in favor of industry,
agriculture, and transportation and communications as opposed to the
construction of housing, educational, cultural, and public health
facilities.
By contrast, comparing 1954 with 1953, total investment in
capital construction in the nonproductive fields increased at a much
greater rate than did total investment in the productive fields.
This distribution reflects the upsurge of investments in the
construction of educational facilities to support the technical
training program and in the construction of housing necessitated by
the increasing demands of the Three Year Plan.
Investment in transportation and communications in 1954
compared with 1953 increased at a greater rate than investment in
other categories. The higher priority assigned to capital construc-
tion in this field indicates the necessity for rehabilitating the
The costs of administration, survey, and design represent the
remaining portion of capital investment. 2/
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Capital Construction
Index of the Volume of Investment ina/
in North Korea 1953-55
1949 = loo
Sector
1953
1954
1955
Productive sector
150
370
476
Industry
151
348
518
Agriculture
159
210
402
Transportation and communications
171
707
498
Nonproductive sector b
102 ,
381
359
Educational and cultural establishments
22 J
267
172
Public health establishments
48 cJ
151
252
Housing
98 c
353
430
a. 13J. Figures are based on prices of 1 January 1950. Percentage
relationships of 1956 to 1955 are. not available.
b. In Communist terminology, all expenditures for social overhead,
such as those for housing, hospitals, and education, are considered to
be nonproductive expenditures.
c. There are probably other construction projects included in the
nonproductive sector which were not listed in the preceding source.
transportation and communications networks as quickly as possible to
support economic growth.
In 1956, the final year of the Three Year Plan, investment
in capital construction was concentrated in major construction
projects which were in the last phases of construction. 14 Investment
for capital construction in industry, especially heavy industry, and
in agriculture continued to have a high priority.
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construction during the Five Year Plan. In 1957, however, it was
announced that investment in capital construction would be reduced
in comparison with 1956 except`~ for increased investment in housing
and educational facilities. '1 This reduction probably indicates
that construction projects begun under the Three Year Plan are
being carried over into the period of the Five Year Plan. With the
decline in aid from the Sino-Soviet Bloc,* it would indicate,
further, that few new starts in construction will be made during
the Five Year Plan, but rather that completion of projects spread
out over a number of years will be emphasized.
The progress made in North Korea in rehabilitation and
reconstruction during the Three Year Plan could not have been
achieved without large-scale aid from the Sino-Soviet Bloc. A
part of this aid, both economic and military, has provided the
construction industry with technicians, materials, machinery and
equipment, and skilled labor. 16 The estimated aid by the Sino-
Soviet Bloc to North Korea, 1954-64, is shown in Table 3.
Estimated Aid by the Sino-Soviet Bloc to North Korea a
1954-64
Country
1954
1955
1956
1957
1958-64
Total
USSR (1954-56)
97.5
85.0
67.5
250.0
Communist China
(1954-57)
122.0
89.4
56.9
56.9
325.2
European Satellites
(1954-64)
35.6
31.0
56.0
26.0
73.4
222.0
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The aid from the USSR has been used on construction projects
in nearly all sectors of the economy, especially on heavy industrial
projects. That from Communist China has provided skilled labor as
well as material and technical assistance to construction projects and
has been used for rehabilitating transportation, water conservancy,
and light industrial installation (see Appendix A and the map,
Figure 1*). About 80 percent of the total aid granted by the Sino-
Soviet Bloc to North Korea to date was expended during the Three Year
Plan. 18 In the future, North Korea probably must rely on production
from its present rehabilitated capacity for exports to obtain imports
needed to sustain the construction program.
The USSR has furnished technical personnel for reconstruction
projects in practically every type of industry, in agriculture, and in
urban rehabilitation, but its main interest has been in the reconstruc-
tion of heavy industry. The influence of the USSR is especially evident
in the construction industry, where Soviet constructionDJ
techniques
are being copied and assimilated by the North Koreans.
Communist China has contributed several hundred technicians
and thousands of laborers to the North Korean reconstruction program.
Thousands of Peoples Volunteers (units of the Chinese Peoples
Liberation Army) have been used for rehabilitation of railroads and
roads, water conservancy projects, reconstruction of plants in the
building materials industry, rehabilitation of the capital city of
P'yongyang, and on other projects in the branches of light industry.
Other Sino-Soviet Bloc countries have contributed technicians
and skilled labor to reconstruction projects in specific sectors of
the North Korean economy: Poland in the reconstruction of mines and
railroad facilities; East Germany in the chemical and metallurgical
industries, particularly those in the Hamhung-Hungnam industrial area,
the building materials industry, and urban construction in Wonsan;
Czechoslovakia in the machine tool and electrical industries; Hungary
in the engineering industry; Bulgaria in the lumbering and woodworking
industries; and Rumania in the cement industry. 20
The role of the construction industry in the economy of North
Korea is of major importance. In economic planning, emphasis has been
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placed on the following: (1) rapid industrialization, which requires
not only rehabilitation but also expansion of existing plants and the
construction of new plants; (2) the reconstruction and expansion of
power facilities; (3) the rehabilitation of railroads and roads;
(4) the construction of housing for workers in cities and at industrial
installations; and (5) extensive irrigation and flood-control construction.
The Three Year Plan stressed construction as an important
precondition for the successful fulfillment of production in all
sectors of the economy. Premier Kim Il-song, in his report to the
Third All-Party Congress of the North Korean Labor (Communist) Party
in 1956, stated that the major task of the Plan was to lay a foundation
for the future by giving priority to the development of heavy industry
and at the same time rapidly rehabilitating light industry and
agriculture. 21 Additional rehabilitation and construction of transporta-
tion and power facilities were necessary to supply construction sites
and installations with materials and power.
The Korean War rendered the industrial sector of the North
Korean economy about 65 percent inoperable. Metallurgical and chemical
plants, power installations, and mines were the most severely affected.
It was reported in early 1957 that more than 8,000 plant buildings 22
were destroyed during the war.
In the Three Year Plan, priority was given to the recon-
struction of industry, with emphasis on heavy industry. 23 North
Korea planned to restore the 1949 level of production by the recon-
struction of existing facilities and to construct new industries to
correct the imbalanced economy. 24 To insure rapid industrial recovery,
approximately half of the investment in capital construction was directed
to the reconstruction of the industrial sector. During the Three Year
Plan, investment in industrial construction amounted to 39.9 billion won
(US $332.5 million), of which 32.4 billion won (US $270 million) were
for heavy industry and 7.5 billion won (US $62.5 million) were for light
industry. L5/
Progress in reconstruction was indicated by the announce-
ment that the production goal envisaged in the Three Year Plan for
state-operated and cooperative organizations was fulfilled during
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1955. 26 Nevertheless, the electric power industry, the fuel industry,
and the chemical industry failed to reach their pre-Korean War level
of production by the end of 1956. 27 As a result, it is planned during
1957 to continue emphasizing reconstruction efforts in these branches
of industry. 28
During 1953-56, more than 240 industrial establishments
were reported completely or partly reconstructed, and about 80 were
reported newly constructed. 29 Although these industrial installations
were reported to be rehabilitated, only parts of plants were in
operation, and many of the plants reported to be newly constructed
were still under construction at the beginning of 1957. As a result,
many of the goals of the Three Year Plan for industrial reconstruc-
tion will be carried over into the period of the Five Year Plan.*
The great hindrance to the rehabilitation and construction
of industry has been the critical shortage of construction materials
and skilled manpower brought about by the Korean War. The progress
made in industrial recovery during the Three Year Plan could not have
been accomplished without large-scale aid** from the Sino-Soviet Bloc,
which furnished these necessary items to the construction program.
One of the most important prerequisites to the rehabili-
tation and continued development of the North Korean economy is the
restoration and expansion of electric power facilities. This will
depend initially on the reconstruction of the major hydroelectric
systems (see the map, Figure 2***) which were badly damaged during
the Korean War.
The Three Year Plan provided for production capacity in
electric power to be restored to approximately the 1949 level by the
end of 1956. 30 This goal was not attained, however,?and is being
carried over into the period of the Five Year Plan. During 1953-55
the state invested 5.1 billion won (US $42.5 million) in the resto-
ration and construction of electric power facilities. An additional
sum of 2.7 billion won (US $22.5 million) was planned to be invested
* See Appendix A for a list of selected construction projects
showing the reported status of construction at the end of 1956.
** See B, p. 9, above.
*** Inside back cover.
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in 1956. 31 The North Koreans themselves have invested a minimal
amount in the rehabilitation of power installations and have relied
heavily on Sino-Soviet Bloc aid, especially from the USSR and
Czechoslovakia.
.The greatest reconstruction effort has been expended on
the Sup'ung Powerplant on the Yalu River. Technical and material
aid from the USSR, reported to amount to 100 million rubles (us
$25 million), 32 has been concentrated on this plant, the largest
in North Korea. The project for the reconstruction of the dam at
Sup'ung was under way in March 1957 33 but probably will not be
completed until 1959.
Czechoslovakia has provided engineers and various parts
of generating equipment for the Pujon, Changjin, and Hoch'on River
projects, 34 which were scheduled for completion in 1955 / but are
still in progress. 36
Projects for the construction of the Tongno River Power-
plant and the Kanggye Powerplant, which were begun by the Japanese,
have been resumed. 37 Construction of the Tongno River Powerplant
is reported to have begun in September 1955, 38D/ but actual construc-
tion probably did not start until April 1956. This plant is
scheduled to be in partial operation in 1959. Other construction
in progress at this site includes accommodations for workers and the
completion of a 94-kilometer (km) road to be used for transporting
construction materials and supplies. 40 The pouring of concrete for
the dam was scheduled to begin in April 1957. The Kanggye Powerplant
is reported to have reached an advanced stage of planning before
World War II. Work at this site was resumed in May 1956, and the
plant is scheduled to begin limited operation in 1961. 41
3. Transportation Facilities.
a. Railroads.
Because of its importance to the economy, reconstruc-
tion of the railroad system in North Korea began immediately after the
Korean War. During the period of the armistice negotiations, reconstruc-
tion and rehabilitation efforts were intensified, and in 1953 it was
announced that all mainline tracks had been restored. 4L2/ The prewar
level of operation, however, had not yet been attained. J This
rehabilitation can be attributed to the readily available supplies of
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construction materials previously deposited along the routes during
the war and the concentration of labor composed of the Chinese Peoples
Volunteers and that recruited from the North Korean population.
The Three Year Plan, which began in 1954, emphasized
continued restoration of existing line and yard track and the reconstruc-
tion of bridges and other rail facilities. In the period between the
armistice and the end of 1955, about 860 km of rail line and more than
300 bridges, totaling 21 km in length, were reconstructed or newly
constructed. 44 At the end of 1955, all of the war-damaged lines had
been rehabilitated, although track conditions remained inferior to
those of 1950, largely because of hasty repairs and inexperienced
workers. Most of the classification yards, stations, and repair facili-
ties were reconstructed.
The railroads in North Korea are oriented in a north-
south direction paralleling the coasts. Only one line, the P'yongyang-
Wonsan line, connects the east and west coastal railroads. A new 120-km
rail line, which is believed to have been constructed before 1954,
extends from Kusong southeast through Kunu-ri to Sinp'yong (Sinsongch'on),
a rail junction on the P'yongyang-Wonsan line. This provides a more
direct east-west route and avoids the bottlenecks at the P'yongyang and
Sinanjju junctions. An extension of this line northeastward from Kusong
to Sinuiju was reported under construction in May 1956, but its present
status is not known. 45 Another new route, believed to have been built
about the same time as the Kusong-Sinp'yong line, is a 48-km line north
from Tokch'on to Huich'on, an extension of the Sinp'yong-Tokch'on route.
This line serves as an alternate to the Manp'ojin-P'yongyang line and
also bypasses the Sinanju junction.
In July 1955, North Korea announced plans to electrify
more than 600 km of rail lines by 1961.* L6/ In 1955 a construction fund
of 200 million won (US $1.7 million) was expended on electrification,
and in 1956 it was planned to be increased to 400 million won (US $3.3
million). 47 The steepest section of the Pyongyang-Wonsan line,
terminating at Yangdok, was reported completed in May 1956. !L8/ By
1961 the entire 160-km P'yongyang-Wonsan line, about 300 km of the
Manp'ojin-P'yongyang line, and the 72-km Yongch'on-Ch'ongjin (Kimchaek)
section of the Najin-Wonsan line will be electrified. The USSR, which
is supervising the electrification program, is furnishing technicians
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and equipment, and Czechoslovakia is supplying electric locomotives.
Electrification on the scale projected will depend on the completion
of power stations now under construction.
b. Highways.
The North Korean highway network has not changed
substantially since before World War II. After the Korean War the
highways, which had been heavily damaged, were reconstructed. Major
emphasis was directed toward repair of strategic highways in the
southern part of North Korea. By the end of 1956, some of the main
highways ha`d~ ~been widened and extended, and some bridges had been
replaced. LJ It is believed that, except for short stretches of hard-
surfaced roads in the vicinities of P'yongyang and Wonsan, most of
the main highways are graveled. Some of the reconstruction and most
of the maintenance is the responsibility of adjacent villages. As a
result, the quality of construction is poor, and maintenance is a
continual problem. Conseque51/ ntly, most highways, although passable,
are not in good condition.
In 1953 the North Korean government estimated that a total
of 28 million square re meters (sq m) of housing had been destroyed during
the Korean War. Such large-scale destruction of existing housing,
coupled with the increased demands levied by an expanding economy,
necessitated immediate repair and new construction of housing facili-
ties. To alleviate the shortage brought on by this destruction, the
Three Year Plan provided for d large-scale program of housing construc-
tion, chiefly in major cities. The goals set in the Three Year Plan,
however, were low relative to the need. It was planned ned to construct
and reconstruct about 4.7 million sq m of housing ~3 in the program
over a 3-year period. Figuring an average requirement of about 7
sq in per capita, 54/ this amount of housing would accommodate only
about 700,000 persons* by 1956.
In February 1957, North Korea reported that since the end
of the Korean War 6.1 million sq m of housing for workers had been
constructed and reconstructed with state funds. Inspite of this
performance during the It years 1953-56, housing construction quotas
* It is estimated that the population of North Korea declined 13
percent from 9.1 million in 1949 to 7.9 million in 1955.
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for 1955 and 1956 reportedly were not fulfilled. 56 Shortfalls in
housing construction during the Three Year Plan are largely attributable
to the high priority given industrial construction for manpower and
materials. The type and quality of housing, moreover, have been of
a temporary and semipermanent nature. 57
Most of the housing constructed has been in urban
areas. It is reported that 3.6 million sq m of housing were built
in the city of P'yongyang with the aid of the Chinese Peoples
Volunteers, 58 and 170,000 sq m of housing were built in the
Hamhung-Hungnam area with the aid of East Germany. 52/
To aid housing construction in rural areas, the Three
Year Plan provided that the state would extend credit and provide
building materials to individuals in these areas. 60 A total of 7.3
million sq m of housing 61 is reported to have been built or re-
habilitated in 1953-56. Construction of dwellings in rural areas,
however, was dependent on individual initiative, as most of the
construction materials allotted for housing construction were allocated
to,urban areas. Also, housing in rural areas did not require the
same type of materials as that in urban areas and probably involved
little state expenditure.
Absolute figures are not available for the amount of
investment in housing construction during the Three Year Plan, but
an index of the volume of investment in housing construction is as
follows 62/:
1953 2 1955 1956
98 353 -430 512*
As shown in this tabulation, the rapid rate of increase
of investment in housing construction in 1954 above the level of 1953
reflects the effort to speed the construction of housing at the
beginning of the Three Year Plan. The rate of increase of investment
decreased markedly in 1955 and 1956, however, indicating that the
greatest volume of investment in housing construction was accomplished
* Derived from L3 J.
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in 1954. The relative decrease in the rate of investment during 1955
and 1956 corresponds to the announcement that the housing construction
quotas for these years were not fulfilled.
The continuing need for housing is shown by the announcement
that dwellings with a total floor space of more than 6 million sq m
will be built in the period of the Five Year Plan. / This goal, which
probably refers to urban workers' housing, is minimal, and even if it
is fulfilled, adequate housing will remain a problem for the indefinite
future.
5. Agriculture.
In 1953, North Korea began an immediate rehabilitation of
the irrigation systems and reservoirs destroyed during the Korean War.
With the loss of the agricultural areas to. the south, North Korea
planned to extend the irrigated area by the expansion of old systems
and the construction of new systems. During ~ ~the Three Year Plan a
total of 4.2 billion won (US $35 million) :!J was invested in irrigation
and flood control projects, an increase above the 2.3 billion won
originally provided for in the Plan. L6/
The rehabilitation and construction projects were reported
to have expanded irrigated acreage more than 87,000 chongbo (approxi-
mately 215,000 acres) L7/ by 1956. The largest irrigation project
is in South P'yongan Province (P'yongan-Namdo). This project, originally
scheduled for completion in 1955, was nearly completed in April 1957. 68
Labor for this project includes peasants recruited from agricultural
cooperatives, the South P'yongan Provincial Irrigation Construction
Trust, and Chinese Peoples Volunteers.
Most of the equipment and materials used in~tnh/e irrigation
projects reportedly are supplied by domestic industry. / Because
industrial construction has a high priority for scarce construction
materials, lower priority projects such as irrigation have suffered,
with the result that. construction has been and will continue to be
delayed.
One of the most pressing problems of the construction industry in
North Korea is a shortage of both skilled and unskilled labor. Initial-
ly, this shortage was caused by Japan's policy of placing its own
nationals in the key positions in the Korean economy and allowing few
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Koreans to be trained for these positions. At the close of World War II
and the repatriation of the Japanese, Korea suffered a great loss in
technical and skilled personnel. The USSR made little effort, moreover,
to alleviate this loss during its occupation before the Korean War.
Military and civilian war casualties and the large-scale movement of
population to the south during and after the Korean War left North
Korea with an even more serious shortage of labor with which to rebuild
its economy. North Korea has attempted to compensate for this shortage
by the use of technicians from the Sino-Soviet Bloc and by an intensive
educational program for labor.
One of the major problems facing North Korea at the end of the
Korean War in 1953 was its short supply of labor. In 1953-55 it was
necessary to deploy most of the labor force to rehabilitation and re-
construction work. As reconstruction progressed during the period of
the Three Year Plan, however, the need for labor in the productive field
pulled labor from construction and thereby prevented the creation of
a permanent and stable construction labor force. LO/
Even with the over-all shortage of labor there was a continued
increase in labor employment in all branches of the economy. The
relative increases in the number of workers in construction and industry
in 1949 and 1952-55 are shown in Table 4.*
The policy of incorporating women into the. labor force explains
this increase to a great extent. It should be noted that the relative
increases shown in Table 4 took place over a period in which the
population suffered a net decline of 13 percent.
At the beginning of the Three Year Plan it was planed to
increase labor productivity 76 percent in industry and 74 percent in
capital construction by 1956. 71 At the end of the Three Year Plan,
however, as shown in Table 5,* increases in labor productivity fell
far short of the planned increases, especially in the construction
industry.
Several factors contributed to the failure of the construction
industry to meet increased productivity goals. Construction sites
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Index of Increases in Number of Workers and Office Employees
in Industry and Construction in North Korea a/
1952-55
Sector 1952 1953 1954 1955
Industry
Total workers and employees 58 677 88 107
Workers 6o 68 88 110
Total workers and employees 42 iii 161 183
Workers 45 118 167 194
Index of Increases in labor Productivity
in North Korea
1954-56
Sector 122L, 1955 J 1 59 6 J
Industry 141 149 156
Construction 123 135 136
a. Derived from 3
b. Derived from LJ.
c. Derived from 75.
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lacked organization, machinery was not properly utilized, and not enough
effort was expended to train and supervise workers. 76 The workers
lacked adequate housing, sanitation,?and other necessities, and the
state was slow in bringing construction workers under the contract
wage system.* The percentage of workers who left jobs in the
construction sector remained high in comparison with other sectors. 77
B. Education and Training.
North Korea has attempted to increase the number of skilled
workers by building technical schools and by enrolling and graduating
more engineers and technicians. In addition, a program of training
skilled workers in on-the-job classes has been instituted at construc-
tion projects, and students and workers have been sent to Sino-Soviet
Bloc countries for further study and training.
At the beginning of 1954 a construction university was opened
at P'yongyang. 8 This school was reported to be operated by the
state for the purpose of training cadres and technicians in specialized
fields of construction and to have three departments -- building
construction, construction engineering, and a department for industrial
'cadres.
Data on the number of students and trainees enrolled are
available for individual years, 1954-56, but it is impossible to
differentiate the categories and levels of training. At the end of
the Three Year Plan it was announced that more than 4,200 technical
personnel / and skilled workers graduated from universities,
colleges, and technical and factory workers' schools and were assigned
to rehabilitation and construction projects. In addition, 800
technical personnel 80 and specialists trained in Sino-Soviet Bloc
countries were assigned to various branches of the economy.
The number of trainees graduated during the Three Year Plan
is inadequate to meet the demands of the reconstruction program
during the Five Year Plan. Even with the greater emphasis on training,
continued reliance on Sino-Soviet personnel will be necessary.
* The contract wage system is the process of setting up productive
norms for the workers and rewarding them according to their degree of
fulfillment.
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V. Construction Materials.
The Three Year Plan called for increased production of construction
materials. The critical shortage resulting from the Korean War made
North Korea dependent on the Sino-Soviet Bloc for large quantities of
these materials in order to carry out planned rehabilitation and re-
construction projects. Attempts were made to relieve the shortage by
collecting and reusing materials already available at construction
sites and by partly rehabilitating cement plants and brick factories
for immediate production.
By 1956 the shortage of cement had been relieved somewhat, but
the production of bricks, structural steel, and lumber was still
lagging behind the demands of the construction industry. 81 lack
of production has not been the only factor that has contributed to
the continued shortage of construction materials. Waste at construc-
tion sites, the need for better methods of transportation and
allocation of materials, and the lack of utilization of local materials
have all contributed to this shortage. 82
During the Three Year Plan, 5 of the 7 previously existing cement
plants in North Korea were rehabilitated and began limited operation.*
The restoration of these plants was made possible by the importation of
production equipment and technicians from the Sino-Soviet Bloc. Restora-
tion has been divided among the USSR, Communist China, East Germany, and
Czechoslovakia as follows: Komusan under Soviet supervision; Chonnae-ri
under Sino-Soviet, Czechoslovak, and East German supervision; Sungho-ri
under Sino-Soviet supervision; Haeju under Sino-Soviet and Czechoslovak
supervision; and Ku-Madong under Soviet and Czechoslovak supervision. 83
Because there has been no mention of cement production in the Sungho-ri
Plant at P'yongyang or from the Sariwon Plant since 1953, undamaged
equipment may have been salvaged and moved from these plants to one or
several cement plants being rehabilitated or constructed.
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Cement Plant at Ch'ongnyong-ni under Soviet 50X1
supervision L4/ and the Unsan Plant at Unsan 50X1
under Rumanian supervision. 85 The Sin-Madong plant is being built near
Madong in Pongsan-gun, Hwanghae-pukto. 86 Originally it had been
planned to build a new plant at Sungho-ri, but this site was cancelled
in favor of the Ch'ongnyong-ni area because large deposits of clay
and silica were found near the latter site. This plant, planned to
have an annual production of 400,000 metric tons* of cement, 87 is
scheduled to begin operation in 1960. Rumanian cement and construction
technicians arrived in North Korea in 1954 88/ to begin surveying the
site of the the Unsan Plant. It was reported to be under construction in
1955,89/ but progress of construction is not known.
It is estimated that during the Korean War about 80 percent of
the cement production capacity was rendered inoperable. 90// The total
amount of cement produced for 1949 and 1954-56 and the amount planned
to be produced in 1957 are shown in Table 6.
Production of Cement in North Korea
1949 and 1954-57
1957
1949 1954 1955 1956 Plan
500 J 225 J 350 J 597 J 800 J
a. 2912-
b. Derived from 92/.
C. Derived from 93 .
e. 95
The cement industry recuperated slowly and failed to fulfill its
annual production goals in 1954 and 1955. As a result it was necessary
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to continue to import cement from Communist China during these years.
The 597,000 tons produced in 1956 fell short of the original goal of
650,000 tons to be achieved in 1956 under the Three Year Plan. 96
It is planned during 1957 to produce 800,000 tons of cement and
to increase production to more than 1 million tons by 1961. 97 Based
on the expansion of existing capacity and the addition of new capacity
represented by the two plants under construction, it is estimated that
this increase in production can be achieved by 1961.
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APPENDIX A
STATUS OF SELECTED CONSTRUCTION PROJECTS IN NORTH KOREA
1956
Map Key
Number Plant Location
Heavy Industry
1 Songnim Steel Mill So
2 Kangsong Steel Works Knngso
3 Songjin Steel Mill Songjin
4 Hwanghae Iron Works Songnim
6 Namp'o Smelter Chinnamp'o
7 Smelter Munp'yong
B Hungnam Fertilizer Plant Hungnam
Status
at End
Type of Yeas Type of Ai
of Construction 1956 I Source of Aid Reported R/
Rehabilitated
Under way
USSR
T M E
Rehabilitated
Under way
USSR
T M E
Rehabilitated
Under way
USSR
T M E
Rehabilitated
Under way
USSR
T M S
East Germany I
T E
Rehabilitated
Under way
USSR
T M E
Communist China
T
Rehabilitated
Under way
USSR
T M E
Rehabilitated
Under way
USSR
T M E
Rehabilitated
Under way
USSR
T M E
East Germany
T
Communist China
Labor
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Table 7
(Continued)
Status
at End
Map Key Type of Year
Number Plant Location of Construction 1956 J Source of Aid
10 Pongong Chemical Plant Hungnam
11 Sungho-ri Cement Plant Sungho-ri
12 Chonnae-ri Cement Plant Chonnae-ri
Unsan
19 Prefabricated Construc-
tion Materials Factory Pyongyang
20 Prefabricated Construc-
tion Materials Factory Hamhung
Rehabilitated Under way USSR
East Germany
Type of Ai4
Reported b
Rehabilitated Completed USSR T E
Communist China T
Rehabilitated Under way USSR T
Communist China T
Czechoslovakia T
East Germany T
Rehabilitated Under way USSR T
Communist China T
Czechoslovakia T
Rehabilitated Under way USSR T M
Czechoslovakia T E
T M E
New Under way Rumania T
Rehabilitated Under way Communist China T M E
New Under way USSR T
East Germany T
New Under way USSR T
East Germany T
Table 7
(Continued)
Map Key
Number
Typeru
plant of Construction
Status
at End
of Year
1956-2
Source of Aid
Type of Ai
Reported b
22
Lumbering Tools Plant Pyongyang
23
24
Machine Tools Plant Huich'onl
Machine Tools Plant Kusong/
New
New
Completed
Completed
USSR
Czechoslovakia
Hungary
T M E
T M E
25
26
Farm Implements Factory Pyongyang
Textile Machine Factory Pyongyang
New
Rehabilitated
Rehabilitated
Completed
Completed
Under way
USSR
USSR
East Germany
Communist China
USSR
Czechoslovakia
Poland
K 3
T M E
M E
M 8
T
T
T
29
Rail Tie Preservatives
Factory
Unknown
Under way
USSR
T
New
Completed
USSR
E
Czechoslovakia
T M
31
Precision Instruments
Factory Pyongyang
New
Under way
Hungary
T M E
32
Nampo Pulp and Paper Mill Chinnamp'o
Unknown
Unknown
Bulgaria
T M E
Pulp and Paper Mill Kilchu
Rehabilitated
Completed
USSR
U
Pulp and Paper Mill Sinuiju
Rehabilitated
Under way
USSR
T
Plywood Mill Kilchu New
Under way
USSR
T M
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Table 7
(Continued)
Map Key
Number
Plant
Location
Type
of Construction
Status
at End
of Year
1956 J
Source of Aid
Type of Ai
Reported b
Light Industry
36
Textile Mill
37
Textile Mill
Chongjin
Rehabilitated
Under way
East Germany
USSR
T
T M
38
Enamelware Factory
Sinuiju
New
Completed
Communist China
T M E
39
Furniture Factory
P'yongyang
New
Under way
USSR
T E
40
Fish Cannery
Sinp'o
Rehabilitated
Under way
USSR
T E
41
Meat Processing Plant
P'yongyang
New
Completed
USSR
U
a. Only parts of most plants are operating. Some plants are under limited expansion.
b. T: Technicians.
M: Materials.
E: Equipment.
U: Unknown.
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