Workers' paradise on show to capitalists

MAY DAY CELEBRATIONS: Pageants, funfairs - and widespread anger at falling living standards Foreign businesses are promised 'no social unrest, no labour strikes'

FBy the time they down tools for May Day in the workers' paradise, North Korea's toiling masses clearly deserve a rest. "The working class across the country is greeting the day with a great productive upsurge in socialist economic construction," reported the official news agency yesterday. In the five previous days, electricity generation and iron, steel and coal output had scored impressive increases compared with the same period last year, while the peasants were performing "feats of labour", it continued.

As is customary before public holidays, some workers had been obliged to perform these feats on Sunday to make up for Monday's day off. But yesterday it was every proletarian's duty to have fun. The festivities had been launched the previous evening with a soire for 50,000 synchronised dancers in Kim Il Sung Square, Pyongyang. On May Day morning, some of them had to be up early to attend the Mangyongdae funfair, as human props in a pageant staged to demonstrate to foreign tourists that happiness and stability reign in North Korea's normally sealed Communist regime.

It has all been part of a rare experiment by the government during the past week in open door diplomacy, with 15,000 foreigners, most from East Asia, being allowed in for the Pyongyang International Sports and Cultural Festival for Peace. In a country where the slogan "we have nothing to envy from the rest of the world" is emblazoned across factory walls, this brief opening has been an uncommon admission by North Korea's xenophobic rulers that the country might need the rest of the world after all.

At one of North Korea's infrequent press conferences, Kim Mun Song, the Secretary General of the External Economic Co-operation and Promotion Committee, last week said the government was pressing ahead with the Rajin- Sonbong free economic and trade zone near the border with Russia and China. "The door is open to any country. We are providing conditions for them to invest," he said. Foreign business people will be allowed into the fenced-off area of 746 sq km without visas and Mr Kim promised them "no social unrest or mistrust ... no labour strikers". At the same time Pyongyang said it wanted to see steady growth in the number of foreign tourists entering the country.

These tentative advances to the outside world come at a time when the country is still in a state of shock following the death last July of president Kim Il Sung and the economy is struggling to cope with the demise of the Soviet Union. In the absence of public statistics, outside analysts estimate it has been shrinking by 5 per cent a year. During five days of being escorted along the officially designated tourist path, perhaps 200 construction cranes could be seen, of which one was working.

Outside the new economic zone, North Korea remains a bastion of Communist central planning. Food and housing are heavily subsidised, with the government selling grain to its urban population at one tenth of what it pays farmers for their output. Allowing the door to open slightly to the outside may be a dangerous gamble for North Korea's rulers. The information-starved population could discover just how different things are elsewhere.

n WASHINGTON (Reuter) - North Korea has agreed to a new round of talks with the US aimed at salvaging a major bilateral nuclear agreement, the State Department announced.