1 . The Unique Characteristics of the System and Human Rights
B. Experimenting with a New Economic Policy
Together with its unusual regime characteristics, North Korea’s inefficient and anachronistic political and economic policies have brought on political and economic crisis, food shortage and diplomatic isolation in the 1990s. The powerful winds of democratization and globalization sweeping across the world since the end of Cold War have
2Of course, North Korea is the only one among the “Failed States” that still maintains effective physical means of control over its people. See Robert I. Rotberg, “Failed States in a World of Terror,” Foreign Affairs, Vol. 81, No. 4 (Jul./Aug. 2002).
3Testimony of new settler Lee XX during an interview at KINU on Dec. 23, 2005;
Many similar testimonies exist.
posed a major challenge to North Korea. With its very survival at stake, North Korea has begun to search for and experiment with a set of new or mitigated policies in response to the changing international environment.
During the Cold War, North Korea depended heavily on the support of the “socialist economies.” Therefore, when the “socialist bloc”
collapsed in the early 1990s, the North Korean economy experienced a sudden and serious setback. Furthermore, North Korea’s strict adherence to socialist principles and its conservative (vertical) ruling style stifled the society’s creativity and vitality, lowered its productivity, and weakened its competitiveness. Until the early 1970s, the North Korean economy was stronger than the South Korean economy. Since then, however, North Korea’s economic vitality has waned rapidly. The economic hardship which appeared in the early 1990s produced a severe food shortage in the mid-1990s. Subsequently, North Korea had to ask openly to the international community for grain assistance. In the process, North Korea has officially admitted that a total of 220,000 people have died of starvation. But, the actual number of starvation deaths is known to exceed far more than the number North Korea has officially admitted. As the food shortage became exacerbated, the people’s behaviors became extremely unruly and defiant. Under the circumstances, the authorities had no option but to increase punitive measures against the people, which meant unrestrained abuses and violations of human rights.
In an effort to tide over its impending economic crisis, North Korea announced on July 1, 2002 the so-called “July First Economic Management Improvement Measures (hereinafter, the ‘7.1 Measures’).”
These measures were designed to complement the inherent shortcomings of North Korea’s planned economy and improve its efficiency by partially allowing market economic ideas. For example, the measures legally allowed private business activities (peddling and vending) in the marketplaces and permitted fluctuations of wages and prices in line with market strength.
The “7.1 Measures” were not intended as part of an overall reform and
openness policy, but as a partial and temporary measure to stem the tide of black markets and other economic instabilities. For this reason, the measures have had only an insignificant and temporary impact on North Korea’s economy as a whole. As factories were unable to operate at full capacity for lack of energy and raw materials, workers were not paid wages. The quality of wageworkers’ lives was rapidly deteriorating.
Inflation was running high, corruptions was pervasive, and the gap between rich and poor was widening. Many new settlers in South Korea have testified that new job categories like maids-for-hire and menial workers have appeared since the “7.1 Measures.”4
The chronic shortage of daily commodities is a frequently observed phenomenon in socialist economies like North Korea. For North Korea to avoid this situation, it would be necessary to open completely its society and invite a massive, sustained infusion of foreign capital. Thus far North Korea has put off the decision to open its society widely for fear of a negative impact on its regime stability.
North Korea’s grain production in 2004 amounted to about 4.31 million tons, recording the best crop since the 1990s. This level of production owes largely to good weather and the timely fertilizer assistance provided by South Korea. Every year, North Korea experiences a grain shortage of about one million tons, which it has to fill with assistance from South Korea, China and the international community. Yet North Korea is demanding that this international humanitarian assistance be converted into “developmental assistance,” while asking for the withdrawal of the World Food Programme team from North Korea. It has also tightened social control and resumed the grain ration system in large cities, including Pyongyang.
These demands and tight controls appear to be part of “protective”
4Testimony of new settler Park XX during an interview at KINU on Jan. 20, 2006.
Many others have testified to the same fact.
measures designed to justify Kim Jong-il’s hereditary rule, cope with the weakening social control capabilities in the wake of the grain ration system’s collapse, and cover over economic policy failures which have exacerbated the food crisis. However, the people’s trust in Kim Jong-il’s leadership and Party policy is rapidly eroding. The food shortage in North Korea is unlikely to disappear unless certain conditions are met including individual incentives for farmers, a reliable supply of energy, and favorable weather conditions. The “2004 Report on Nutrition Levels in North Korea,” jointly surveyed by UNICEF, WFP and the North Korean authorities, revealed that most children and pregnant women were suffering from severe and chronic malnutrition.
Recently, in an effort to overcome its economic hardship North Korea has introduced a number of partial reform measures, which could be construed as signs of transformation. Some of these measures includean expansion of markets and civilian economic sectors, introduction of store ownership, broader business independence, designation of special economic zones (SEZ), and the inter-Korean economic cooperation (e.g.
Kaesong Industrial Complex). In addition, North Korea has been trying to promote cooperation with China to win economic as well as diplomatic support in connection with its nuclear issue. In hopes of improving bilateral economic cooperation, North Korea’s Prime Minister Park Bong-ju has visited China leading an economic mission, and concluded an investment guarantee agreement and an agreement to expand mutual economic cooperation. Above all, Chairman Hu Jintao’s visit (Oct. 28～
30) to North Korea has served as an occasion to expand bilateral political and economic cooperation and promote friendly relations between the two countries.
Should North Korea decide to accept the Chinese model, having witnessed China’s recent economic growth, we could expect progress not only on the nuclear impasse but also on the level and quality of economic cooperation with China and the international community. This would
certainly brighten the prospects for North Korea’s own development.
However, should North Korea decide to place its priorities on the maintenance of Kim Jong-il’s “unitary ruling system,” it would most likely experience another series of political and economic downturns, caused by conflicting values and policy priorities. Furthermore, in the process of resolving the dilemma, North Korea is likely to attempt a series of trials and errors between its “our-style reforms,” which would allow only partial and limited solutions, and the new imperatives of change and reform. Clearly, North Korea will not be able to resist indefinitely the global trend of openness and reform. It will constantly face pressures for change, and in time it will be forced to take improvement measures, however gradually (so long as they do not pose direct threats to the regime stability.)