Kim Jong-un announces switch to economic development

Posted on : 2018-04-23 17:21 KST Modified on : 2019-10-19 20:29 KST
Denuclearization to be used as leverage for loosening sanctions and requesting economic support
The KCNA reported on Apr. 21 that North Korea was shutting down its nuclear test site at Punggye-ri following a vote taken during a made in a plenary session of the Central Committee of the Korean Workers‘ Party. The photo shows the second session of the 7th Central Committee meeting that took place last October. (Yonhap News)
The KCNA reported on Apr. 21 that North Korea was shutting down its nuclear test site at Punggye-ri following a vote taken during a made in a plenary session of the Central Committee of the Korean Workers‘ Party. The photo shows the second session of the 7th Central Committee meeting that took place last October. (Yonhap News)

“Let us focus our energies on building a socialist economy!”

This was the new “party strategy” presented by North Korean leader Kim Jong-un after declaring an end to the “two-track course” of economic and nuclear development at a third plenary session of the seventh Workers’ Party of Korea (WPK) Central Committee.

Kim’s description alone does not provide enough to gauge the specifics, direction, or intensity of the new approach. But the “targets” announced by the Kim at the meeting showed no signs of hyperbole. They are frank in their assessment of the reality. Kim explained that the “current goals of the struggle” are to achieve “normalization of all factory and company production” and achieve an “abundant autumn in every field” over the period of the five-year national economic development strategy (2016–2020) so that the “sounds of the people’s joyful laughter ring out far and wide.”

The KCNA reported on Apr. 21 that the Central Committee of the North Korean Workers’ Party had voted to halt further nuclear and missile testing during a plenary session held the previous day. (Yonhap News)
The KCNA reported on Apr. 21 that the Central Committee of the North Korean Workers’ Party had voted to halt further nuclear and missile testing during a plenary session held the previous day. (Yonhap News)

In the medium and long terms, he called for “providing all the people with an abundant and developed life with nothing to envy.” The details suggest the leaders were unable to conceal the difficult realities for the North Korean economy since the 2013 adoption of the two-track course, with the strengthening of the North’s nuclear armament and increased sanctions from the UN and international community in response. The use of the phrase “normalization of production” is an example. The implication is that with upcoming inter-Korean and North Korea-US summits, Kim hopes to use denuclearization as leverage to obtain a loosening of international sanctions and economic support and cooperation.

Kim also set out guidelines calling for “unconditional obedience of the Cabinet’s integrated directions to see the party’s economic policy through.” It was a statement of commitment to cracking down on the “politicization of economic policy” through party and military involvement, which outside experts have pointed to as a longstanding problem for the North Korean economy.

Assessing the details, direction, and intensity of Kim’s “new strategy” requires a look back at his speech during the seventh WPK Congress in May 2016. In that speech, Kim declared that “building a powerful economy” was the “basic front where the party and countries must channel all its energies at the present time,” before going on to summarize the “Kim Jong-eun model of economic reform and openness” policies he had attempted since taking power in 2012. These policies amounted to a “five-year strategy” as an intermediate-term economic plan, promoting “economic development zones” with his economic openness strategy model, and formalizing a “North Korean approach to economic management” as a strategy to achieve the “Kim Jong-un model of economic reform” – namely development of a market economy.

The five-year strategy’s importance lies in its being the Kim Jong-un era’s first strategy approach for economic policy. Over 20 economic development zones have been established to date following orders by Kim at a WPK Central Committee plenary session on Mar. 31, 2013. Eight of them are operating in the Chinese border region, include the Yalu (Amnok) and Tumen (Duman) River areas.

Economic development zones are a key means of achieving the “Kim Jong-un model of external economic openness,” which involves decentralization to the North Korea-China border region and other localities. Often referred to as the “May 30 measures,” the “North Korean approach to economic management” is known in the North as the “socialist corporate responsibility management system” – key elements of which include legalizing various currently illegal or semi-legal market-related activities and boosting autonomy and incentives for factories, farms, and other economic actors. Outside experts have focused on this as the “Kim Jong-un model of marketization,” or an early measure in Kim’s model of economic reform.

While the “three-item set” in Kim’s model of economic reform and openness failed to gain traction amid intensifying international sanctions in response to the North’s nuclear program, Kyungnam University Institute for Far Eastern Studies professor Lim Eul-chul described Kim as “opening the door to the market at the same time as he prepared for war.” The message is that the situation could change completely after the inter-Korean and North Korea-US summits, depending on how much sanctions can be lifted in response to progress with denuclearization.

While some have suggested Kim is attempting to follow that Deng Xiaoping did in spearheading reforms and openness in China, it is still too early to reach any conclusions. In logical terms at least, Kim drew a clear line with full-scale reforms and openness, stressing that the “basic principle of the new revolutionary course” would be “regeneration through our own efforts.”

By Lee Je-hun, senior staff writer and Kim Ji-eun, staff reporter

Please direct questions or comments to [english@hani.co.kr]

button that move to original korean article (클릭시 원문으로 이동하는 버튼)

Related stories

Most viewed articles