Last week Kim Jong Un, North Korea’s new leader, made a subtle yet clear allusion to possible economic reform in his speech at his grandfather’s centenary birth celebrations, telling the crowd that the party was determined to ensure the people would never have to “tighten their belt again”.While it may not appear much to Western ears, to North Koreans it’s an important sign. Such talk has been pretty much unheard of in the hermit kingdom, where the former leader, Kim Jong Il, not only never made public speeches, but always exhorted personal sacrifices for the greater good.
The more affable, Swiss-educated younger Kim has been deviating from his father’s aloof public image — he invited foreign journalists to view the (failed) rocket launch for instance, and there have been (unconfirmed) reports in a Japanese newspaper of Kim’s desire for new economic policies.
Kim Jr’s breaks in tradition have given many hope he will follow it up with real change. “He represents the younger generation which has aspirations about the future…a better life,” Brad Babson, a former World Bank official and expert on North Korea at Johns Hopkins University, says. Kim seems to know foreign investment is needed, but this is easier said than done.
Kim currently derives his legitimacy not from good governance, but from maintaining a belligerent international stance (as evidenced by the recent missile launch). He needs to make North Koreans believe South Korea and the United States are the enemy, and the Kims and the military are protecting them through isolation to stay in power, even though this is deterring foreign investment.
There’s definitely need for drastic improvement. The Democratic People’s Republic of Korea (DPRK)’s economy has stagnated for decades, owing to restrictive economic practices, limited trade, and insufficient foreign investment. GDP per capita is $1,800, putting it in 193rd place out of 226 countries. Its policy of self-reliance is failing, and Myanmar’s case proves it needs to end its self-isolation to attract foreign investment and bolster its economy, according to The Economist. This may be behind Kim’s attempts at greater international transparency.
Special enterprise zones on the border with China and South Korea haven’t stimulated the domestic economy: most people outside the capital Pyongyang still live in poverty. And while most North Koreans are too concerned with the hardships of day-to-day living for discussions on the country’s future, they are waking up to the government’s unfair policies, as the 2009 protests against currency revaluation prove. Increased exposure to the outside world through more cell phone connectivity, trade with China, and visits by foreigners has helped too.
In an ideal situation, Kim would institute measures to make citizens’ lives better. But for all the mythology that surrounds the Kims in North Korea, the military are Kim Jong Un’s key supporters, and until he establishes himself, he needs to keep them happy, according to Time. The recent missile launch in violation of a recently concluded food-for-arms deal with the U.S. was a way for Kim to assure the military he was looking after their interests. It is also why, in the “guns versus butter” battle, DPRK has always chosen guns.
“As a younger person whose rise has only been prepared for for a maximum 2-3 years… he doesn’t have the connections or the seniority [of Kim Jong Il],” says Aidan Foster-Carter, a professor at the University of Leeds and author of ‘North Korea after Kim Il Sung’.
The Pyongyang elite are another group interested in maintaining the status quo, but for different reasons. They have been the one group that has actually prospered under the draconian regime, thanks to the Kims’ willingness to grease their palms to ensure their continued support, according to The Economist. If the regime began negotiations and opened up the country to capitalism, the elite are afraid it would weaken their clout.
“North Korea is being hamstrung by its own discourse,” says Foster-Carter. So even though Kim Jong Un and his father have (often obliquely) promised reforms, change has been minimal.
But this hesitancy can’t go on forever. China has supported North Korea politically and economically for some time now (as a buffer state to the pro-U.S. South Korea), and the assurance of Beijing’s backing has emboldened Pyongyang. But China has been growing impatient with Pyongyang’s aggressive ways and lack of reform, and trade with China forms a majority of North Korea’s earnings, so it would do well to keep Beijing happy.
Sustaining the loyalty of the elite in the future could also pose problems, according to Babson. The current economic model can hardly continue making them rich indefinitely if they are not eventually allowed access to free markets. If Kim strengthens the economy, it would help strengthen the state, allowing capital to flow in and make both the rich and poor prosperous.
“The internal resources of the society hardly exist anymore, there’s no way to raise capital, everything needs replacing, and externally, with the whole policy of militancy, of nuclear defiance, the result is, you get another round of sanctions from the UN, everybody thinks you’re weird, and nobody is going to come and invest,” Foster-Carter says.
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