In authoritarian North Korea, hints of reform

September 3, 2012

Under new leader Kim Jong Eun, North Korea in recent months has shifted its rhetoric to emphasize the economy rather than the military and is introducing small-scale agricultural reforms with tantalizing elements of capitalism, according to diplomats and defector groups with informants in the North.

The changes, which allow farmers to keep more of their crops and sell surpluses in the private market, are in the experimental stage and are easily reversible, analysts caution. But even skeptical North Korea watchers say that Kim’s emerging policies and style — and his frank acknowledgment of the country’s economic problems — hint at an economic opening similar to China’s in the late 1970s.

There are reasons to be dismissive of North Korea’s potential for reform: The family-run police state, now with its third-generation leader, maintains city-size labor camps and funnels precious resources to its nuclear program rather than its impoverished millions. It has also raised and deflated hopes of economic reform in the past — most recently 10 years ago, when it introduced liberalizing pro-market policies, then quickly cracked down.

Whether this time is different, analysts and outside government officials say, depends on the ambitions of its 20-something supreme leader, who can either bring his destitute country out of isolation or keep it there, figuring it too risky to loosen state controls.

Analysts emphasize that it could take years for a clear answer, but they point to early indications that Kim is willing to run the country differently than his father, who died eight months ago. Some of those signs are purely cosmetic: State media portray Kim as an affable modernist by presenting him alongside his stylish wife and showing him delighting in performances by miniskirt-wearing pop stars.

The greater substance comes from Kim’s occasional speeches, in which he has talked about ending North Koreans’ belt-tightening and “improving people’s living standards.” In one notable appearance, he also chastised North Korean officials for their “outdated, ideological” way of thinking.

It is not known whether the Swiss-educated Kim has a worldview different from that of his dour and militant father. But in a move two months ago that some analysts describe as an encouraging sign, the new leader dismissed a top hard-line military official who had been a trusted lieutenant to his father.

“It’s premature to make any judgment about what will happen, but we were in a system last year [under Kim Jong Il] where it seemed like policy had been set and it was distinctly retrogressive, with no reasonable prospect for change,” said Scott Snyder, a senior fellow for Korea studies at the Council on Foreign Relations. “Now, I think that there is an anticipatory buzz that maybe there could be something new.”

Unclear motivations

Several media outlets that employ North Korean defectors, including Washington-based Radio Free Asia, have reported that Pyongyang is rolling out agricultural policy changes that mark a significant break from the state-controlled economy.

Those measures, according to the reports, reduce the size of cooperative farm units from between 10 and 25 farmers to between four and six. The decrease is critical because it allows one or two households, not entire communities, to plan and tend to their own farms. Farmers still must hit production quotas, but they can keep 30 percent of their crops, up from less than 10 percent. They can sell the rest to the government at market prices, not state-fixed prices, and they can keep (and sell privately) anything exceeding the quota.

The changes do not apply to the entire country; they have been introduced in three rural provinces and took effect in July, according to reports. The changes could not be independently verified because North Korea maintains strict controls on foreign visitors, allowing few to visit poor areas outside the capital, Pyongyang.

It remains unclear what is driving the government to allow farmers more personal control. The North could be trying to wring more production from its farmers “out of necessity, not out of virtue,” because its centrally planned rationing system is broken, said Victor Cha, a former White House director of Asian affairs. If and when the North’s food shortages ease, he said, the country is likely to retreat.

“Having said that, the more time they have to do this and let the economy function on its own, the better off we all are,” Cha said. “You can say to farmers, ‘Okay, for six months, you can keep 30 percent,’ but the more times you do this, the harder it will be to pull back.”

Few foreign government officials or scholars on North Korea expect a big-bang economic makeover or official announcements about reform. Indeed, the country’s state media said in July that it was a “hallucination” to expect reform or an opening. But one foreign government official based in Asia who recently visited the North said he met with several senior North Korean officials who gave a “consistent message about economic policy and economic development” while never once mentioning the long-favored military.

“Obviously, they didn’t use the term ‘economic reform,’ ” said the official, who spoke on the condition of anonymity to discuss sensitive conversations. “Those are dangerous terms and counterproductive. But the clear message I got from senior people was: We know we need to build the economy.”

An ideological tightrope

If Kim pushes for sustained economic reform, analysts say, he invites major risks. He could alienate the senior officials around him — the elite few who profit from the current system. He could also trigger a demand among the North’s 24 million people for rapid, rather than partial, liberalization, and it’s almost inconceivable that the Kim family would keep its power in a democracy.

Kim must also walk an ideological tightrope, paying homage to his father and grandfather while encouraging new ideas. Some analysts say they have been surprised at the new leader’s willingness to criticize the status quo, most notably during a visit four months ago to an amusement park.

Although state media normally describe the North as a socialist paradise, they portrayed Kim touring the park grounds and grumbling about the state of disrepair. He spotted chipping paint, cracks in the pavement and sprouting weeds, which he plucked one by one “with an irritated look,” one media account said.

During the visit, Kim chided officials for letting the park fall into such a sorry state and for their “outdated, ideological” way of thinking. He appointed a top deputy to oversee improvements.

A follow-up report two weeks later said that “soldier-builders” were “now waging an all-out drive to turn the above-said [amusement park] into a more modern recreation ground.”

Yoonjung Seo in Seoul contributed to this report.

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