With the exception of those markets operating as an alternative to the failing public distribution system, private enterprise in North Korea is entirely prohibited. Not only that; the people’s economy (nominally the ‘1st Economy’) is overwhelmingly subordinate to the military and ‘Suryeong’ (generating funds for the rule of the Kim family) economy (nominally the ‘2nd Economy’).
As such, it has long seemed extremely unlikely that Kim Jong Eun, whose regime has placed significant weight on rule by dint of the ‘last instructions’ of Kim Jong Il, a man who disliked all talk of reform, would adopt the kind of dangerous changes that reform and opening would be sure to incite.
However, it is true that Kim has made a number of noticeably pro-reform public statements since his inception. On February 2nd during a meeting with Central Party officials, he commented, “You absolutely must solve the problems of the people’s livelihoods; helping the people to live well with nothing to envy is my will and goal.”
Somewhat after the fact, Rodong Shinmun also published the text of a statement that Kim submitted to a meeting of Central Party cadres shortly before the 4th Delegates’ Conference in April. In it, Kim declared, “Force a decisive change in improving the people’s livelihoods and constructing an economically powerful state. Solve the problem of food security as swiftly as humanly possible and support the light industrial sector in order to make North Korea into a strong country based on a knowledge economy.”
Notable Chinese expert Professor Zhang Liangui of the Party School of the Chinese Communist Party Central Committee garnered attention not so long ago for his speculation that this type of thing shows how Kim Jong Eun plans to put the economy at the forefront of state affairs going forward. He believes that recent statements about having become a nuclear state are precisely designed to make room for the adoption of this new national goal.
Cho Bong Hyun of the Industrial Bank of Korea Economic Research Institute agrees, at least on the point that the need for economic reform is keenly felt inside the North Korean elite, too. He told Daily NK, “Kim Jong Eun’s statements about reform and opening and his appearing to care about the people stem from the perspective of wanting to pacify popular discontent caused by chronic economic shortcomings. Whether they want to or not, North Korea needs to reform and open, so it appears that they are going to slowly change the economic policy system.”
Pyongyang has at least tried to establish a leadership model that stands a chance of bringing about this economic reform. Kim has apparently moved to try and place all economic problems under the auspices of the Cabinet (whose ageing head, Prime Minister Choi Yong Rim, has long been the nominal economic boss but with little real power).
However, with the scale of vested interests engaged in economic activities in the People’s Army and elsewhere, it remains to be seen how this will play out.
On this last note, Park Hyung Jung of the Korea Institute for National Unification cautioned against putting the cart before the horse, saying, “Since the birth of the Kim Jong Eun system, North Korea has been sending up a variety of flares related to reform and opening, but there have been no real, concrete moves in that direction. For as long as they do not discard the military-first economy and fail to formally adopt the market economy as a full part of the economic system, then all talk of reform and opening will be premature.”