Ammon News - PYONGYANG (Reuters) - North Korea's economy is believed to be virtually lifeless after decades of mismanagement, isolation and sanctions aimed at foiling its nuclear ambitions but its showcase capital, Pyongyang, shows no hint of calamity.

Secretive North Korea allowed in a large group of foreign journalists last week to cover Saturday's lavish celebrations of the 60th anniversary of the truce that ended the 1950-53 Korean War, which North Korea says it won.

No expense seems to have been spared for monuments to the conflict upon which the state was founded.

A cemetery for war dead unveiled at a ceremony on Thursday, that leader Kim Jong-un presided over, looked immaculate, with grave stones bearing portraits of the dead and images of the medals they won.

A new war museum, opened to the public with much fanfare on Saturday, boasts top-of-the line television displays and elaborate recreations of battle sites.

A big statue of North Korea's founding father, Kim Il-sung, grandfather of the current leader, looms over visitors to the museum dedicated to the war South Koreans blame the elder Kim for starting.

North Korean visitors took pictures with Japanese digital cameras.

Government minders closely chaperoned the foreign journalists throughout their stay and the visitors largely had to rely on glimpses of Pyongyang from the press bus to get an impression of life.

There is no hint of the numbing poverty, hunger and repression that North Korean defectors say define life in the countryside.

The U.S. Central Intelligence Agency says in its global fact book that North Korea's annual per capita income was $1,800 in 2011, in purchasing power terms, the 197th in the world and about 5.5 percent that of South Korea.

A famine in the 1990s is estimated to have killed a million people. More than one-quarter of children are chronically malnourished, according to a U.N.-backed survey published in March.

But none of that is evident in Pyongyang.

OLD CARS, LITTLE SHOPS

Residents, by definition regime loyalists because the government decides who can live there, rely on a rusting cable car system to get around. Long lines of people pack in at busy times of day.

People walk a lot along the largely empty, well-swept streets. In recent days, women held up parasols of different colors to shade themselves from the summer sun.

Most cars are old European or Japanese models but there are some newer ones including Toyota Land Cruisers, and Mercedes-Benz and Audi sedans.

Perhaps surprisingly, a lot of little shops are scattered across the city, in particular book and clothing stores. There are also restaurants and tiny shops selling nothing but locally produced soft drinks, in apple, grape and peach flavors.

Many people were sitting relaxing in the shade in squares and along sidewalks. Some chatted on mobile phones.

Apartment blocks may look a bit run-down, just as in many other Asian cities, but many residents had flower pots on their balconies.

It is after sunset that North Korea's economic difficulties are more evident.

Large parts of Pyongyang have no street lights, and apparently a patchy electricity supply. Specks of light floating in the darkness look like fireflies, but prove to be bicycle lamps.

It goes without saying in the capital of one of the world's most tightly controlled countries that there is no hint of any unrest or frustration with the regime led by the 30-year-old Kim.

"He has been in place for more than a year and a half now; we see no sign of any dissent or opposition or internal discomfort over his position as leader," one diplomat said of the young leader.

While Kim has been more visible, especially over the past week when he looked confident and relaxed presiding over the anniversary celebrations, there is no indication of any change in the policies set by his father and grandfather.

"There's been a change in style, but not substance," said the diplomat, who declined to be identified.