During an interview with AP on January 16, Vice-Chairman of the North Korean Supreme People’s Committee Yang Hyung Sup claimed that the country’s leadership is “looking into examples of economic reforms, including countries like China”. Coming as it did from a member of the government’s inner circle, there is some speculation as to whether this remark reflects a desire for real policy change under the new Kim Jong Eun system, or if it is just lip service aimed at receiving foreign aid.
All things considered, it does not seem a credible claim that Kim Jong Eun could be looking into economic reforms while his regime is adopting severe internal controls such as closing the border, banning cell phones, controlling inflows of foreign currency and taking every opportunity to publicly beat-down South Korea.
Expectations will likely emerge that Kim Jong Eun has the potential to do what his father did not, and pursue a route of reform, no doubt pointing to his youth and experience of progress while studying overseas. By citing China as a particular success story of economic reform, some are wondering whether North Korea is planning to pursue ‘Chinese-style economic reforms’ in the expectation that this will lead to greater aid from China.
However, given Kim Jong Eun’s other priorities at the moment, namely establishing regime legitimacy and his leadership system, many also doubt that he will make any decisions that may possibly create internal turmoil.
Incidentally, Kim Jong Il made seven visits to China, each time highly praising the country’s economic advancement. In May 2000, he visited Beijing at the invitation of former Chinese Prime Minister Jiang Zemin, where he said that “Deng Xiaoping reforms were right.”
In January 2001 he called the progress at Pudong, an area of Shanghai, a miracle; however this led to no policy changes involving reforms or liberation. Then in 2002 he introduced the ‘July 1 Measure’, which lasted only a few years before being abandoned.
There was a cycle to Kim Jong Il’s economic leadership. First he would make remarks about economic reform, then enact a few isolated policies before eventually abandoning them. For this reason many are wary of giving too much weight to any such comments by Kim Jong Eun, or in this case his close associates. The government’s insistence on a closed system aimed at maintaining internal control and the continuation of a nuclear weapons program is also a conundrum. Support from the international community is not going to be easy to come by if North Korea continues to develop nuclear weapons.
North Korea has a clear desire to establish joint Special Economic Zones (SEZs) with China, at Hwanggeumpyong-Wihwa Island and Rajin-Subong. North Korean second-in-command Jang Sung Taek is in charge of the Hwanggeumpong-Wihwa Island project. He represented North Korea at the groundbreaking ceremony for Hwanggeumpong, while the Raseon district is overlooked by the Joint Venture Committee, which also is directed by him.
Despite the Supreme People’s Assembly adopting a bill for the establishment of the Hwanggeumpyeong-Wihwa Island SEZ in August last year, China refused on the grounds that it was not corporate-friendly. North Korea is now in the process of modifying it.
Meanwhile, Kim Jong Il’s eldest son, Kim Jong Nam said in a recently published email conversation with Tokyo Shimbun, “After Jang Sung Taek’s visit to China in 2006 the government seriously considered reforms and liberation, and many people were expecting this to eventuate,” however he added that “They are hesitant to do so fearing that North Korea’s internal system would collapse due to the influx of foreign information.”
