North Korea may be experimenting with new economic management measures in order to avoid some of the difficulties caused by the overly rapid implementation of the July 1st, 2002 “7.1 Economic Management Improvement Measure.” However, even were some of the experiments to succeed, it is unclear how the authorities would be able to expand them nationwide.
In 2002, North Korea implemented the July 1st economic changes just nine months after Kim Jong Il had outlined his position on the matter to Party economic officials in October 2001. Because the authorities had been unable to adequately assess the effects the changes might have in the interim, capitalist elements were subsequently able to spread in unexpected ways, and after just three years many of the changes were reversed.
The changes had allowed for expanded managerial autonomy, which caused both the spread of capitalist elements and the appearance of a new middle class. The uncertain Kim Jong Eun regime is very sensitive to such things, a fact evidenced by the way Kim has repeatedly made public visits to the security forces since coming to power so as to reinforce the message that the “winds of capitalism” must be kept out.
In short, as has long been the case, Pyongyang is first and foremost faced with the task of trying to normalize its troubled economy while continuing to exercise control over the population.
However, that is not the only problem. Even if there is the will, there is no evidence that the country has sufficient “seed capital” to take experimental measures and turn them into nationwide economic changes. In the words of researcher Kim Young Hun of the Korea Rural Economic Institute, “In the absence of the right material foundations, reform measures are unlikely to be more than institutional changes.”
Kim went on, “For as long as the North Korean authorities do not pour their resources into production and production infrastructure in a large scale way, it will be impossible for them to expand their productive capacity. It may be possible to give motivation to a few military units and guarantee some supplies from the experiments; however, expanding nationwide is a completely different problem.”
