North Korean Reform: Maintaining the Status Quo

by David Park on August 16, 2012

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Three Koreas exist on the Korean Peninsula—South Korea, North Korea, and Pyongyang. Compared to the rest of North Korea, Pyongyang is an anomaly, where three million denizens bleed red, pledging utmost loyalty to the Kim Il Sung dynasty, now led by the regime founder’s grandson Kim Jong Un. In return, the capital’s inhabitants live a relatively privileged life. The rest of North Korea is a different country, where most suffer under deplorable conditions, having to resort to illegal and immoral acts for sheer survival. Set against this backdrop of contrasts, some speculate that Pyongyang’s mention of economic and agricultural reform, the creation of a “political bureau” to oversee economic matters, and the tacit approval to allow approximately 40,000 guest workers to China provides hope that North Korea is beginning to address its deficiencies, which will lead to its opening and transformation. Sadly however, these hopes are unlikely to come to fruition.

Economic reform in North Korea is implausible because reform would entail opening up North Korea to capitalist forces, a dangerous venture on the regime’s part that will further produce cracks in several pockets of North Korea and possibly even in Pyongyang. The influx of outside information can slowly but surely undermine the regime’s legitimacy and position.  Should the benefits of reform gain traction within North Korea, the regime will likely halt its momentum due to concerns over a lack of control, as it did in 2006 in response to the 2002 economic reforms that introduced markets. This also occurred in 2009 when the Kim Jong Il regime shut down its largest market to exercise tighter control.

Furthermore, agricultural reform poses an intrinsic problem. Seventy-two percent of North Korea’s terrain is non-arable. Reform is a daunting task considering the country’s unfavorable climate and soil conditions, which have deteriorated considerably because of droughts, flooding, and the people’s scavenging for food and lumber. North Korea also lacks the requisite resources–seeds, fertilizers, tools, and irrigation systems–to successfully produce agriculture. Beijing may continue to provide the bare minimum assistance to help keep Pyongyang afloat, but it is hardly likely to supply North Korea with the resources and tools it needs to raise the country out of abject poverty. Beijing tolerates, not appreciates, the regime in Pyongyang.

A “political bureau” designed to wrest control of the economy from the military, while promising in theory, does not in reality guarantee reform. To lose control of its former domain may be impetus enough for the military to become more assertive, specifically during the implementation phase. Such behavior may become more prevalent as the military’s power continues to be curtailed, seen in its recent loss of lucrative export privileges, under the banner of economic reform. For seventeen years, the military enjoyed primacy under Kim Jong Il’s Songun (Military First) policy. Should it feel that it is losing its privileges, one can expect a reaction from the military, much like the gun fight that supposedly occurred when new Vice Marshal Choe Ryong-hae attempted to detain the former Vice Marshal Ri Yong-ho. Seizing control of the economy and curtailing its lucrative export privileges could push the military to hinder reforms or even worse, provoke it to cause instability that not only affects North Korea, but also the Korean Peninsula and Northeast Asia.

The supposition that 40,000 guest workers’ lives will improve as a result of their employment in China is also unfounded. The regime has agreed to this arrangement, not to improve the workers’ lives, who in all likelihood will be the privileged, regime loyalists, but rather as an alternative source of income. Facing sanctions and the failure of several special economic zones designed to spur economic growth, the Kim Jong Un regime is desperate to find a source of revenue. Experts surmise that “each North Korean worker should bring Pyongyang cash remittances of about $2,000 per year. Out of salaries of $200 to $300 per month, workers are likely to keep less than $50.” The regime is using its people to make money for its own coffer, and since the 40,000 will likely be regime loyalists, there is little concern that they will foment dissent and instability.

In light of this analysis, it is difficult to believe that the regime’s proposed reforms will lead to meaningful change. These reforms are neither an attempt to address North Korea’s deficiencies nor to open and transform the country. Instead, they are meant to appease and appeal to the regime’s loyalist base in Pyongyang so that the regime might maintain the status quo and safeguard itself, which is, after all, its ultimate goal.

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{ 2 comments… read them below or add one }

1 Artin August 18, 2012

Thought provoking piece. What do you think will happen in NK’s economic future? It seems inevitable that North Korea will someday run into a conundrum between choosing state reform or going economically bankrupt.

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2 David September 16, 2012

Artin- Technically, NK is already economically bankrupt. Without Chinese assistance, they’d sink faster than a rock. But state or even economic reform would mean the death of the regime, thus presenting the Kim regime with a Catch-22. In all likelihood, NK’s rhetoric will signify economic reform while it looks to China to help lay the infrastructure for economic development. China will most likely balk at this daunting task, prompting NK to reconsider nuclear and missile brinkmanship. But given China’s desire to prevent NK from further nuclear and missile development and the strategic value NK brings to China, China should provide enough assistance to keep NK alive. Therefore, expect NK and China to act like they always have.

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