Roh and Pak on an Economic Tightrope

Among the elements which will decide whether the regime of Kim Jong Eun survives over the long-term, one of the most critical is the way economic issues are pursued. As such, there is a lot of interest being shown in the ‘6.28 Policy’ revealed by Daily NK earlier this week.

In particular, it is believed by experts in Seoul that those officials who drove the July 1st Economic Management Reform Measures of 2002, current Vice-Prime Minister Roh Du Cheol and Pak Pong Ju, the head of the Chosun Workers Party Light Industry Department, are leading the current economic changes. As prime minister, Pak was responsible for driving the 2002 reforms, while Roh, his then-deputy, is adjudged to have played a key supporting role.

As such, from almost the moment when Roh was elevated to become a candidate member of the Politburo and Pak took the reins of the Party Light Industry Department (as well as becoming a director of the Kim Jong Eun-led Central Military Commission), experts have been watching carefully, assuming that the North is planning to use the July 1st Measures as a jumping-off point for new reforms.

In fact, Daily NK has been told by sources that Kim Jong Eun issued a special decree back at the start of the year ordering the Cabinet to oversee improvements to the country’s economic management methodology and citing Roh as the manager of the process, though this cannot be confirmed.

What is certain is that Kim Jong Eun did fire the first public shot in the process when he issued a statement to the Party Central Committee on April 6th, subsequently published in the state media, in which he declared that “all problems arising from economic issues are to be focused on the Cabinet, and the Cabinet will put regulations and orders in place to resolve them.”

A closer look at Roh’s history lends weight to this belief that he is a man of real influence in the regime at present. He was selected as vice-prime minister in 2003 at the comparatively young age of 59, and then in 2009 was handed the simultaneous task of chairing the State Planning Commission. His being made a candidate member of the Politburo at April’s 4th Workers’ Party Delegates’ Conference only confirmed that he is in the ascendant.

Elsewhere, Roh also travelled to China with Kim Jong Il in 2006, and for some time has reportedly been driving technological cooperation with Beijing. These are the reasons why he is being singled out as the one in the apparatus of state who is guiding the implementation of Kim Jong Eun’s economic plan.

“Roh Du Cheol is seen as an elite figure in the North Korean domestic economic sector who has been participating heavily in Sino-North Korean cooperation,” one South Korean government source agreed. “He knows an awful lot about the Chinese reform and opening process, and is playing a highly influential role in the economic sector.”

Cheong Seong Chang of the Sejong Institute concurred, adding, “Roh’s having been elevated to candidate member of the Politburo, the most powerful organization of all, is interesting because it means he is in a position to deflect attempts from the military or Party to check his actions.”

While Roh works on economic issues in the state apparatus, it is believed that Pak Pong Ju is performing a similar role from within the Chosun Workers’ Party itself.

As Cabinet Prime Minister from September 2003 to April 2007 he oversaw the expansion of North Korea’s market economy following the adoption of the July 1st Measures. Then, following a period in the wilderness, he was rehabilitated in 2010 as a top deputy in the Party Light Industry Department of Kim Kyung Hee. He then moved to the top of the department in April.

With his well known predisposition for market economics and given his relatively recent regime rehabilitation, it is logical to assume that Pak is another influential figure in the most recent changes. Usefully, he has friends in high places, having worked under the powerful Kim Kyung Hee and having joined the man who is regularly cited as the current regime no. 2, Jang Sung Taek, on a visit to South Korea in 2002.

Interestingly, on July 2nd Rodong Shinmun very prominently reported the presence of Pak alongside Kim Jong Eun on an onsite guidance visit to a children’s department store and hosiery factory. The move won’t have gone unnoticed; placing a certain official at the leader’s right hand in published photos is a classic method of indicating a resurgent influence.

Not only that; according to North Korean sources, administrative cadres were recently also informed that Pak has been given a leading economic role and that all past criticisms of his work and accusations of disloyalty have been cast aside for the sake of reviving the national economy.

In conclusion, Roh and Pak appear to have been set at the helm of plans for economic revival. Given their support base at the top of the Kim family, for the time being opposition from the military or within the Party can probably be restrained.

However, that will not last forever, and the 6.28 Policy, whose principles amount to ‘the state will guarantee to provide the initial inputs, and then production will be distributed at market prices’ are not sufficient to inspire great confidence for a number of reasons. Already, the likelihood of the plan resulting in unsustainable budget deficits is being raised.

Surely, then, failure is as likely as success, and it may well turn out that both men follow in the gloomy footsteps of former Party Agriculture Secretary Seo Kwan Hee and former head of the Party Finance Department Park Nam Gi, both of whom were made scapegoats for past state failures and shot.

After all, the words “the economy is the responsibility of the Cabinet” also means “the economy is nothing to do with me.”