Parliament OK's N. Korea budget

SEOUL -- North Korea's handpicked legislature approved the national budget yesterday under the watch of leader Kim Jong Il, boosting defense spending to arm all its citizens and turn the isolated communist country into a ''fortress," according to reports.

Kim appeared at the one-day session of the Supreme People's Assembly, the North's official Korean Central News Agency reported, although he was not believed to have addressed the meeting of loyalists.

The North originally said it would convene the parliament session in early March but postponed it without any explanation. The legislature usually meets once or twice a year to approve budgets or policy set by the Kim regime.

The meeting comes amid a heightened standoff over North Korea's atomic programs after Pyongyang claimed in February it had developed nuclear weapons and said it would boycott six-nation disarmament talks that include the United States. But in the official report on the parliament session yesterday, there was no mention of the nuclear dispute.

North Korea's budget revenue will increase 15.1 percent this year from 2004, boosted by a 13.5 percent increase in revenues from state enterprises in the country's centrally planned economy, KCNA reported, citing Finance Minister Mun Il Bong. No figures were given for the 2005 budget or the year before. The North said it spent 15.6 percent of its budget on the military last year ''in order to cope with the more frantic moves of the US-led imperialists to isolate and stifle" the country.

This year, the figure will rise to 15.9 percent ''with a view to bolstering the People's Army, developing the defense industry and implementing to the letter the (Korean Workers) Party's policy of placing all the people under arms and turning the whole country into a fortress," according to KCNA.

Premier Pak Pong Ju focused his speech to the meeting on the claimed successes of the economy in the North, which relies on outside aid to feed its people. The North has embraced tentative overhauls to its communist system and encouraged managers to put a priority on profit, which Pak said should continue. Economic officials and factory managers should devise strategies ''thoroughly adhering to the socialist principle and the principle of ensuring profitability," he said, KCNA reported.

Pak also blasted the United States for halting fuel oil shipments that were provided under a 1994 deal between the countries in which Pyongyang agreed to stop its nuclear weapons development in exchange for aid.

The energy deal fell apart after the latest nuclear crisis erupted in 2002, when US officials accused the North of running a secret uranium-enrichment program.