North Korea: Is economic reform beckoning?

Analysts of political events inside the highly secretive Democratic People’s Republic of Korea (DPRK) usually preface their offerings by conceding that they include healthy measures of speculation, even hearsay. It is much the same with the recent buzz in Western circles that has to do with the removal of Vice Marshal Ri Yong Ho as Chief of General Staff of the Korean People’s Army and Vice Chairman of the Central Military Commission of the Korean Workers’ Party.

Pyongyang says that Ri’s removal from his previous positions of power and privilege have to do with the state of his health. DPRK watchers say that the move has to do with Ri’s opposition to planned economic reforms by the country’s ruler Kim Jong-Un.

Ri belongs to North Korea’s privileged class. His father served as Defence Minister to Korea’s founding leader Kim Il Sung and as head of the military he enjoyed privileges associated with the military playing a key role in the country’s economy.

One version of the current events in Pyongyang is that after less than a year in power, Kim Jong-Un has taken aim at the DPRK’s overwhelmingly state-controlled economy which has proven ill-equipped to meet the needs of the country’s population. The record floods in 1995 which destroyed much of its agricultural produce and precipitated a famine that brought the United States, South Korea, China and the UN’s World Food Programme to Pyongyang’s aid was perhaps the final nail in the coffin of the utopia of Kim Il Sung’s Juche Idea which the DPRK had sought to sell to the rest of the world.

The now reduced Ri has reportedly been a staunch advocate of the “songun” or military first policy, and current reports suggest that his removal from his official posts may have had to do with his expressions of disapproval of Kim’s planned economic reforms.

It is of course entirely plausible the Kim may be contemplating economic reforms for a host of other reasons.  He is under thirty years old, reportedly not averse to aspects of Western culture including theatre and cuisine.  In all likelihood, Kim may be entirely amenable to presiding over the modernization of an archaic economy as long as such reforms as may ensue do not compromise his political power base.

In this regard Kim would have observed the experience of Pyongyang’s most important ally, Beijing, which has managed to realize major economic reforms while ensuring the continued political authority of the Communist Party. More than that, it would not have been lost to Kim Jong-Un that while the privileges that have been showered upon the military have done little more than impoverish the civilian population of North Korea, South Korea, by contrast, has embraced a free market economy and, in the process, has become the fifteenth largest economy in the world, a global leader in consumer electronics and home to the world’s fastest internet connections. For those reasons, Kim Jong-Un, the third member of the Kim dynasty to rule the DPRK, may well have a strong interest in doing things his way.

More than that Beijing has reportedly been pressing Pyongyang for economic reforms, fearing that economic collapse in North Korea could send a flood of refugees over the border, bringing an end to the North’s role as a buffer against the South where more than 25,000 US troops are stationed.

What may perhaps have surprised DPRK watchers is that Kim might wish to jettison his father’s “military first” policy which is credited with keeping the regime in power during the 1995 drought/famine, though the move is rumoured to be a response to increasing disquiet among the the civilian political hierarchy to corruption in the military arising out of the privileges accorded it, particularly under the country’s previous ruler, Kim Jong Il.

The real significance of rumoured economic reforms in North Korea reposes in the implications of any reforms for the stability of the Korean peninsula where the DPRK’s military assertiveness, its crippling poverty and its flirtation with nuclear weapons have given rise to tensions that have attracted global attention. Conceivably, economic reforms in North Korea may portend significantly improved relations with its neighbour to the south which – even in circumstances where Kim goes the China route of maintaining a tight political grip on power – may serve to reduce tensions on the peninsula.

Having assumed the position of Marshall of the military Kim Jong-Un has also sent an important signal that he intends to retain personal control of the army as insurance against the kind of civilian restlessness, perhaps even insurrection, that might arise out of the harsh ‘medicine’ associated with economic reforms. If we may still have a far from clear picture of the unfolding events inside North Korea, what is apparent is that the country’s new ruler is keen to secure his independent power base and place his own distinguishing mark on the regime.

Much of this, of course, is based on assessments which, given the secrecy of the regime in Pyongyang, emanate from watchers in Seoul and elsewhere. That having been said, previous assessments of developments in the DPRK emanating from these same sources have proven to be largely accurate. That apart, the DPRK – for reasons that include what is believed to be a limited nuclear capacity and an idiosyncratic political regime – remains a country of interest in the global scheme of things. Nothing that we learn about the DPRK can be dismissed without enquiry.