Journalist Christopher Woodburn explores new directions for North Korea.
Long-considered the last bastion of Stalinist socialism in the post-cold war era, the hermit kingdom—as it sometimes called—has purportedly made some ground-breaking changes which may pave the way towards long-term economic reforms. The lack of Western media coverage could be explained by the very opacity surrounding the existence of such reforms, a recurring theme when dealing with North Korean state politics.
Despite this ambivalence—or maybe because of it— it may come as a surprise that since, 2013, and the implementation of the “June 28th measures”, agricultural production and produce ownership have gone through a significant ideological shift, seemingly at odds with ultra-socialist ideas of state ownership and North Korea’s past modus operandi. Though not technically (or legally) considered reforms, the measures effectively break down the way collective farms operate, enabling much smaller work teams (notably, families), to work as production teams. Presenting a cleavage from past collective farming methods and production processes, the end-produce is subsequently split 70:30 between the state and production team. The ideological and economic ramifications are vast considering the fledgling planned economy which has been sanctioned by North Korea since its creation in 1949.
This trend, coupled with the recent creation of China-style economic-development zones on the Sino-Russian borders, has led many to believe that the hitherto status quo of archaic obfuscation is finally coming to an end. The apparent success of the June 28th measures allegedly spurred the DPRK to instigate further reforms, known this time as the May 30th Measures. The latter, to be instigated in 2015, would double the allocation of agricultural produce to production teams, and would make significant inroads in the fledgling industrial sector by granting greater managerial and economic freedom to factory directors. These changes would effectively emulate, at least on the microeconomic level, salient tenets of China’s 1978 open door policy.
The extent to which these reforms exist is subject to contention: according to some, however, the likelihood of these reforms taking shape is higher than expected, given the disastrous 2009 currency reform, a new party leadership and China’s growing discontent with its neighbour. Another question is to assess whether or not these reforms would have any lasting ramifications for the North Korean economy and population. The lack of foreign direct investment is seen as a major inhibitor to long-term economic progress. Due the country’s protracted war-rhetoric and international sanctions, states find it hard to justify the risks associated with investing large sums of money in such an unstable and distorted economy as North Korea’s. Unsurprisingly, and despite increasing Chinese frustration, China remains North Korea’s greatest trading partner, with 187 investments taking place between November 2003 and May 2014 according to the Petersen Institute for International Economics. If the aforementioned reforms turn out be true, and if used systemically across the country, the possibilities for socio-economic and political change are non-negligible if an effective synergy with FDI is obtained.
Christopher Woodburn is a Geneva-based journalist and contributor to Le News.