Signs of Economic Reform in North Korea
Video Transcript:
July 27 marks the 60th anniversary of the signing of the armistice that ended the Korean War. North Korea remains a relatively isolated country, considered an international pariah by some, a humanitarian disaster by others. Yet the North Korean regime has, through the Cold War but perhaps more remarkably in the two decades following the Cold War, retained control and avoided any significant internal or external disruptions. North Korea’s leadership is under no illusion about the true state of their nation. But after more than six decades, the system has ossified, and a relatively small number of individuals have a vested interest in maintaining their tight control over the levers of economic and political power.
The leaders see a need to restructure the economy but also recognize the social and political implications of such a change, and they're neither willing nor able to effect any rapid reforms. Yet there are signs of changes in North Korea. Even before the death of Kim Jong Il, North Korea had begun seeking alternatives to its economic dependence upon China and ways to improve the internal economy. By early 2011, then-North Korean Premier Choe Yong Rim began to make very public tours of North Korean economic sites, from new construction to factories to farms. Prior to this point, nearly all such inspections were conducted by Kim Jong Il himself, and rarely did the premier do much other than send greetings to foreign dignitaries, at least in public, despite technically having responsibility for North Korea’s economic policies.
When Kim Jong Un took over the leadership of North Korea after the death of his father, Choe continued this more active role in the economy, before being replaced recently by current Premier Pak Pong Ju. Pak is considered, at least by North Korean standards, a bit of an economic reformer, and this was seen in the past when he served as premier from 2003 to 2007. His return highlights a willingness of the North Korean leadership to rely on the expertise and experience of technocrats like Pak. And like Choe, he makes regular public inspections of various economic projects in North Korea, as well as visits to China.
This is not to say that North Korea is about to open as China did in the late 1970s, but there are signs of experiments within its internal economy. According to the latest estimates by South Korea, the North Korean economy grew at its fastest pace in four years in 2012, up some 1.3 percent, based on increased manufacturing and improvements in the agriculture sector. But North Korea is not only relying on internal changes. There have been signs that North Korea is courting India as a potential source of investment in steel and manufacturing, and Pyongyang has floated additional openings for low-cost manufacturing to the Europeans. Perhaps more concretely, construction on the Jilin-Rason high-speed rail line, which will connect northeast China to North Korea’s port project in its northeast, is currently underway, and Russia is renovating parts of the Trans-Siberian railway that will also connect into the North Korean port.
None of these are guarantees of a major shift in North Korea’s economic performance, and Pyongyang continues to remain constrained by political factors. But 60 years after the end of the Korean War, and more than two decades after the end of the Cold War, there are early signs that North Korea, now feeling more secure with its nuclear deterrent, is beginning to set its sights more actively on improving economic performance.
