World Economy
0

North Korea Leader Could Pursue Reforms Under a Different Name

North Korea Leader Could Pursue Reforms Under a Different NameNorth Korea Leader Could Pursue Reforms Under a Different Name

North Korean leader Kim Jong Un’s promise to build “socialist economic construction” in his nuclear-armed but impoverished and isolated country could herald more Chinese-style economic reforms, according to analysts—but he will never explicitly say so.

Alongside the declaration Saturday that the North had completed the development of its nuclear arsenal and no more atomic or missile tests were needed, Kim proclaimed that the “new strategic line” for the ruling Workers’ Party would be “socialist economic construction”, AFP reported.

The three words appeared a total of 56 times in the report by the official KCNA news agency on Kim’s speech and the subsequent party decision. It has a long way to go.

For a time after the Korean War the North was wealthier than the South, benefitting from a Japanese colonial decision to concentrate industrialization there as it had more mineral resources and more hydroelectric power potential than the largely agricultural southern end of the peninsula.

But that situation reversed as the North—long considered one of the most state-controlled economies in the world—suffered from decades of economic mismanagement, worsened when the demise of the Soviet Union ended the financial support that had helped to plug the gaps.

Average incomes were less than one-twentieth of those in the South in 2016, according to the most recent statistics available from Seoul—Pyongyang itself does not publish figures even for GDP growth. The situation has been improving as Pyongyang quietly allows the market to play a greater role in its economy under Kim.

It recorded its fastest expansion in 17 years in 2016, according to the Bank of Korea, the South’s central bank—although that is threatened by recent UN Security Council sanctions imposed on sectors such as coal, fish and textiles over its weapons programs.

Kim intends to pursue “essentially the Chinese-style economic program he is busily implementing”, said Andrei Lankov of Korea Risk Group. “Economic reforms which are not going to be called economic reforms.”

In neighboring China and nearby Vietnam, Kim has two examples of communist parties that have embraced capitalism without threatening the rule of the one-party state—even reinforcing their positions by delivering increasing prosperity.

 

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com