N.Korea to Let Businesses Keep 70% of Profits

North Korea will announce economic reforms in October that will allow state-run companies and shops to keep 70 percent of their profits, the Asahi Shimbun reported Tuesday.

Most companies and shops in North Korea are run by the state and all profits go to the state, with overheads and wages reimbursed afterwards.

But since the regime appoints workers and pays their wages regardless of the profits they generate, the system has failed to motivate workers to work harder, and productivity declined.

In agricultural reforms in June, the regime allowed farmers to keep part of their produce to sell in the market and reduced some collective farming units.

englishnews@chosun.com / Sep. 05, 2012 12:08 KST