Pyongyang’s overhaul scheme seen tantamount to giving up socialist system: experts


North Korea appears to be stepping up efforts to overhaul its debilitated economic system amid deepening international isolation and growing public discontent over poverty.

News reports suggested that it has sought to expand its implementation of the so-called June 28 measures, which some observers said are tantamount to the renouncement of the socialist system.

The measures give greater autonomy to state corporations, allowing them to choose their production items, prices, amounts and marketing methods, according to reports.

They also allow farmers to take in 30 percent of their harvest. Under the measures, the food rationing system is scrapped for ordinary citizens. It is applicable only to public servants and workers at educational and medical institutions.


The North has recently been struggling to earn foreign currencies by bolstering tourism, sending more workers to China and exporting its minerals overseas, a move that experts say is part of efforts to shore up its faltering economy.

Along with these efforts, the leadership in Pyongyang is also striving to improve internal economic conditions, hoping to secure more loyalty from its people who are growingly disgruntled over the economic conditions that have long faltered amid its pursuit of nuclear arms and provocative behavior.

Since the mid-1990s, following the demise of the Soviet Union, the North Korean economy has been teetering on the verge of collapse. It went through a severe famine, dubbed the “Arduous March,” during which some 2 million people are thought to have died.

Experts say that the new reform measures that have yet to be officially clarified are likely to be stronger than the ones that were introduced in 2002, but petered out due to lackluster political will.

“For new leader Kim Jong-un, improving the overall economy for its ordinary citizens is the first and foremost thing for him to do to secure loyalty from the public and strengthen his legitimacy as leader of the country,” said Kim Young-hui, a North Korean defector and specialist on North Korean economy at the state-owned Korea Finance Corporation.

“His grandfather Kim Il-sung and his father Kim Jong-il have a fairly legitimate source of respect from the public, but he is lacking in it. People have expectations for the new leader, which should be not that high by South Korean standards, and Kim may have to live up to them.”

Since he took the helm of the country in December upon his father’s death, hopes have been raised that the Swiss-educated leader in his late 20s would carry out economic reform, never seen in the reclusive state.

Many observers have noted that economic reform is inevitable given that the market activities have already been rampant due to the malfunctioning rationing system along with outside information flowing into society and slowly awakening the public.

News reports have already said Pyongyang promulgated a measure that drastically increases the proportion of agricultural products a farming family can freely dispose of. Under the state collective farming system, the North has recognized only the right to privately sell crops left over after having met the production targets.

But all these measures may not succeed in the end unless the North abandons its dynastic ruling system, some experts pointed out.

“As it would not do anything that would hurt its power elites, any reform and open-door policy, whatever they call it, would not have any meaningful results,” said Yang Un-chul, senior researcher at the think tank Sejong Institute.

“Even if they allow some autonomy to farmers and corporations, when they don’t have any personal property, such incentives would not work. Even though they take in some percentage of their harvest, this would, after all, be taken away by middle-level officers.”

By Song Sang-ho (sshluck@heraldcorp.com)