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N Korea boosts industrial output 10%, premier says

North Korea boosted industrial output by 10 percent last year, the country's premier said in a budget report to parliament that analysts said disclosed severe problems as well as some progress.

It showed that the communist state was clawing its way back from economic ruin but was still suffering from acute power shortages, they said.

Premier Pak Pong-ju told the rubber-stamp parliament in Pyongyang on Thursday that industrial output, a concept different from international standards as the communist state does not take service industries into account, rose 10 percent last year from 2002.

Power output was up 21 per cent, lead and zinc up 76 percent, iron ore rose 46 percent and cement production increased 27 percent, he said.

"Big efforts were directed to the field of power industry," Pak said of last year's economic performance, adding the operating rate and efficiency of generating equipment at existing power stations and plants needs to be improved.

"In the power industry, the construction of large hydraulic power stations and minor power stations should be pushed ahead to create additional generating capacity," Pak was quoted as saying.

Experts here said North Korea had been experiencing difficulties in securing parts and equipment which are essential for the maintenance of its old power plants, most of which were modeled after those of the former Soviet Union.

Pak said iron and steel needed for repairing equipment should be provided to the power and coal industries and railway transportation as a priority.

Finance Minister Mun Il-bong said in a separate report that the government had set aside 15.5 percent of this year's state budget for the military "with a view to ... consolidating the country's defenses as firm as an iron wall."

He gave no budget figures, saying only that revenue this year is expected to increase 5.7 percent and expenditure 8.6 percent, according to North Korea's official Korean Central News Agency (KCNA).

Experts in Seoul said last year's budget expenditure in the impoverished communist country was estimated at US$11.5 billion.

North Korea's Gross Domestic Product is believed to have halved from 1990 to 1998.
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