Will He, Won’t He: to Open or Close

Opening is a keyword for anyone trying to predict the future of the North Korean regime. It is a major concern for the country’s neighbors whether Kim Jong Eun, having ascended to the status of supreme leader via a perverse hereditary succession process, will adhere to his father’s closed door policy or embark upon opening for the sake of his long-term survival.

Certainly, since the launch of the Kim Jong Eun regime North Korea has shown a relatively realistic economic attitude while simultaneously maintaining a conservative political approach. Kim has mentioned the need for modest reform and massively expanded programs dispatching students and workers to (predominantly) China. Moreover, he has promoted Sino-North Korean joint ventures and allowed Chinese tradesmen modest access to select domestic markets. Watching this, some speculators predict that North Korea is on the brink of a fuller opening.

▲ What does the young man really want?

Kim Jong Eun is the opposite of Kim Jong Il, who would not allow anyone to so much as utter a word about opening or reform. Indeed, Kim Jong Il was still emphasizing as late as his very last New Year Joint Editorial that “we must firmly believe in our own power, and stride forth as the powerful incarnation of our own effort.”

Conversely, the younger man announced in a statement to April’s 4th Party Delegates’ Conference that officials should gather information from abroad through the Internet, of all places.

“Through the internet people can see many materials on global trends, materials on other countries’ advanced science and technology,” he declared. “We also need to send delegates to other countries to learn what they need to know and collect data before returning.”

Yang Hyung Seob, the Vice Chairman of the Supreme People’s Assembly Standing Committee, spoke keenly of Kim in an interview with Associated Press in January, noting, “Party Central Military Commission Vice-chairman Kim Jong Eun has an interest in the knowledge economy and is carefully watching economic reforms in various countries, including China.”

According to some reports, Kim Jong Eun now wisely permits economic officials to speak freely, and has declared that they should go forth and absorb the benefits of capitalism.

Finally, as is very well known (and rather overplayed), Kim Jong Eun studied abroad in Switzerland for six years, which is taken by some as evidence that he is less afraid of reform than Kim Jong Il.

▲ Actual, factual changes on the ground

There have been changes on the ground since Kim Jong Eun appeared, too, although widespread access to the internet is not yet one of them.

One is the substantial revision of foreign investment laws protecting the assets and profits of foreign-invested companies. Interestingly, this has the effect of protecting the rights of North Korean workers in the Rajin-Sonbong Special Economic Zone, placing the zone under international standards. It also allows the leasing of land for 50 years and for foreign investors to own buildings.

North Korea has conducted briefings to attract foreign capital from the three northeastern provinces of China as well, paved the road to Rajin, completed a railway from the Russian border and is preparing to construct another from Tumen through Namyang to Chongjin (though much of this is being done with foreign cash). It is rumored that even Chongjin port could be opened to foreign companies in the foreseeable future.

Observers also point out that North Korean officials are travelling more than ever before; to Australia, New Zealand, Singapore, Indonesia, Laos, Vietnam and Myanmar in recent months alone.

Of all this, Cheong Seong Chang of the Sejong Institute commented to Daily NK, “Kim Jong Eun, with his experience of Western capitalism, sees economic opening as something that cannot be avoided,” adding, “They are carefully examining Singapore, which is politically authoritative but has a developed economic model.”

Domestically, Chinese traders are being allowed to operate in the northerly, isolated Namyang Workers’ District in North Hamkyung Province too. A senior source has also said that the North is preparing to permit traders into areas as little as 100km from Pyongyang in the near future, too, though this is unconfirmed.

▲ All that opening: medicine or poison?

For logical reasons, reform and opening efforts should be limited for as long as North Korea is ruled by the invisible hand of Kim Jong Il’s ‘last instructions’. However, mention of these last instructions is fading from the propaganda narrative, and from the young leader’s point of view the existing economic crisis is a fatal weakness that must be overcome.

In other words, if the economic crisis does not show signs of alleviation during the grace period the new leader has been handed by the North Korean people, regime stability is likely to suffer. A partial opening that would suggest to the domestic and international audience that the regime is making an effort to improve the ‘welfare’ of the people would buy it a good amount of further assistance and another dose of goodwill. This has the potential to positively reinforce regime stability.

It is said that it was Kim Jong Il’s strong central leadership that allowed him to maintain the nation’s isolation. Because Kim Jong Eun’s leadership is far less secure, he needs to give more back. There is no longer term choice other than to move towards opening, given that the people are dependent on the market and are keen to see improvement in their economic conditions.

According to Cheong of the Sejong Institute, “Jang Sung Taek is the manager of Hwanggeumypeong and the Rason Special Economic Zone. Kim Kyung Hee also has an increasing interest in developing light industry rather than heavy industry. Likewise, Choi Ryong Hae (an increasingly influential Party secretary) and Choi Young Rim (Cabinet Prime Minister) both support Kim Jong Eun’s opening and appear to exercise a limited degree of autonomy.”

All of this, Cheong for one believes, is creating an atmosphere conducive to reform.