Tuesday, August 18, 2015

North Korea: clueless about economic reform - Paul French

Paul French
Paul French
The execution of North-Korea´s vice-premier Choe Yong Gon shows again we should not have too much hope for China-style economic reforms, writes Paul French, author of North Korea: State of Paranoia, for Reuters. "There are no coherent ideas about economic reform."

Paul French:
Choe’s death, which reportedly occurred in May and under the direct order of the supreme leader, is of particular interest to those seeking to discover what, if any, policies Kim may have to reboot the North’s failed economy. Choe came to some prominence in the mid-2000s when he represented Pyongyang in breakthrough trade talks with Seoul. He was also seen as prominent in the 2004 opening ceremony of the Kaesong industrial zone, a factory park run with Seoul that is the last remaining joint project of the two countries. 
Both the North-South economic cooperation talks and the Kaesong project were relics of Kim’s father’s brief flirtation with economic reform. The reforms were announced in 2002, when North Korea’s economic situation had become dire. There were food shortages, industry had grinded to a halt, aid donations were falling because of the political impasse over the North’s restarted nuclear program and donor fatigue had set in following the horrific famine of the 1990s. Despite this catalogue of disasters, Pyongyang had always resisted reform. When China’s leader Deng Xiaoping told Kim Il Sung that China’s reforms were a window to the West, Kim replied: “When you open a window, flies come in.” 
Still, the 2002 reforms - including wage and pricing changes, greater marketisation, a looser agricultural policy, reform of  the Public Distribution System (rationing) and a Chinese-style special economic zone in the city of Sinuiju - were the first real reforms to touch upon the domestic economy. But the reform process, described as “perestroika à la Pyongyang,” was disjointed and ultimately failed. The reforms were incomplete; at best, failures and, at worst, the cause of further economic deterioration. The Sinuiju experiment was completely delinked from any other economic activity in the country and went nowhere fast. 
It remains unclear from where within the closed world of Pyongyang the reform impetus sprung. It is assumed that Kim Jong Il, “Dear Leader” and father of the current leader, was the instigator, though, among his then-inner circle, it seems Choe was a champion of greater openness. The failure of the reforms could not be apportioned to the Dear Leader, and so others, such as Choe, had to shoulder the blame. Strike One against Choe.
More at Reuters.

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