More experts say that Pyongyang may unveil economic reform measures soon


North Korea’s leader Kim Jong-un appears inclined toward economic reform as he grapples with a hamstrung economy, international isolation and waning public loyalty.

Since he took the North’s helm following Kim Jong-il’s death last December, signs of a desire for change have been detected with his public appearances apparently choreographed to show that he cares about his people in poverty.

In recent months, the leader in his late 20s was seen striving to forge conditions for a more open, practical policy line as he has sought to normalize the role of the cabinet and reduce the inordinate influence of the conservative military rulers.

“If Kim unilaterally pushes to carry out too swift a reform policy, this could invite strenuous resistance. He, thus, appears to focus first on establishing a climate for reform and openness by reorganizing the power structure,” said Hong Hyun-ik, research fellow at the think tank Sejong Institute.

Hong stressed South Korea’s vital role in helping the northern neighbor open up.

“For the North’s opening, its outside conditions are also important. China as well as the U.S. wants the North to open up. But Seoul still gets ensnared in an ideological frame rather than taking a practical approach,” he said.

The Seoul government remains cautious about the possibility of reform in the reclusive state.

“I understand that there has been some progress in their (North Korea’s) internal discussions (over reform and openness),” said Unification Minister Yu Woo-ik during a parliamentary session on Wednesday.

“If we look at the North’s situations, there is obviously such a demand for economic reform and normalizing of ties with foreign countries. But we need to wait and see how things will unfold.”

The fledgling leader recently dismissed General Staff Chief Ri Yong-ho, the centerpiece of his 1.19-milion-strong military, from all positions, a move analysts said was aimed at diluting the influence of the rigid military in his state governance.

This move differentiates him from his autocratic father who had bolstered the role of the military to push for major state projects during economic hardships.

As if he had revealed his desire for openness, Kim instructed his broadcasters to air a performance by the Moranbong Troupe earlier this month, in which Mickey Mouse, a symbol of America’s capitalist culture, appeared.

His apparent desire for an economic overhaul was also reflected in the recent increase in the number of economy-related articles carried by the Rodong Sinmun, the official daily of the North’s ruling Workers’ Party.

This has spawned speculation that Kim would soon unveil his comprehensive economic reform plan comparable to the 2002 plan characterized by an expanded autonomy in corporate management and introducing some market elements. The plan fizzled out due to resistance from the conservative military elites, experts said.

“(The increase in economy-related articles) suggests that the North has tried to set the stage for reform and show to the outside world its desire for change,” said Cho Bong-hyun, senior researcher at the Industrial Bank of Korea Research Institute.

“There is a possibility that the North will carry out reform measures around August or September to reform areas of agriculture, service, trade, market, foreign investment and banking.”

Some reports said that the North has already taken some steps to overhaul the agriculture sector.

Pyongyang promulgated a measure that drastically increases the proportion of agricultural products a farming family can freely dispose of, according to them. 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.

The North has also made revisions to its seven regulations for foreign investors, which was made on Dec. 21, just four days after the former leader passed away. They are concerning the operation of foreign enterprises and investors include ones on taxes, accounting, labor management and registration.

The revision came while the entire state mourned the death of his father. This apparently signaled that Kim is willing to push for the policy to attract foreign investment, experts pointed out.

Regarding the economic models Pyongyang could adopt, experts remain divided. Many have said that the North could adopt the Chinese or Vietnamese models.

Cho of the IBK institute said that the North could introduce a Singaporean model.

“Based on its vast resources, China has attracted foreign enterprises. But this would not be well suited for North Korea,” he said. “Under a centralized governance system, the resource-scarce Singapore has focused on logistics industries, banking and finances. This would work better for Pyongyang.”

Some others raised the possibility of the North taking some of the reform measures carried out by Cuba which also struggles with tough sanctions from the U.S.

“Although Cuba has yet to depart from its socialist economic model and yet to take any sweeping reform measures, the North could look for something to take from the Cuban economy considering Pyongyang has only a few states to rely on in the international community,” said Kim Jino, senior researcher at the IBK institute.

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