The political obstacles to economic reform in North Korea: The ultra cautious strategy in comparative perspective

Abstract

Unlike other surviving communist regimes (China, Vietnam, Cuba), North Korea has not been able to achieve sustained growth by reforming its economy. This article will trace the failure of economic reform in North Korea to the prevailing system of political governance based on Monolithic Leadership System (MLS) reinforced by Military First Politics (MFP). The political risk aversion of the MLS–MFP system permits only an ultra cautious reform strategy, but the potential of even ultra cautious reform cannot be fully realized. The detrimental effects of the MLS–MFP system include: excessive restriction of the development of grassroots capitalism; entrenchment of the wasteful economics of militarization and the perpetuation of international isolation. The combination of stubborn regime under economic duress sets off a vicious circle of economic failure, anti-marketization, and external confrontation. Escape from this predicament depends on external initiative focused on steering the regime back onto the path of ultra cautious reform, especially by easing its need for militarization. The viability of such an initiative depends on the extent the US is prepared to accept the regime in its current form.

Keywords:

• centrally planned economy
• engagement strategy
• military first politics
• mono transition
• monolithic leadership system
• regime change

Acknowledgements

This work was partly supported by the Academy of Korean Studies (KSPS) Grant funded by the Korean Government (Ministry of Education ) (AKS-2011-BAA-2104). I am also grateful to the two anonymous reviewers and to Professor Shaun Breslin, the Editor of The Pacific Review, for their helpful advice. The normal caveats apply.

Notes

1 Based on estimates by South Korea's Bank of Korea. North Korean statistics are notoriously unreliable.

2 Original faction members consisted of those who had close association with Kim Il-Sŏng during the guerrilla days of the 1930s-40s. With the hereditary succession, the factional circle was expanded to friends of Kim Chŏng-Il from his school and college days during the1950s-60s.

3 Kim's explanation of hereditary succession to Chinese leader Deng Xiaoping was that his colleagues would not be united otherwise.

4 FDI in Cuba was concentrated in the sectors of tourism, telecommunications, pharmaceuticals, and cash crops (such as sugar).

5 As a share of GDP, Chinese military expenditure fell from 5.5 (1979) per cent to a low of 1.06 % (1996). As a share of central government expenditure, it fell from 15 % to 8 % (1979–86). The military controlled some 20,000 enterprises by the end of the 1980s. See Crane, et al. (2005: 109–10, 112).

6 Based on official US estimates, Cuban military expenditure as a share of GDP fell from 4.3 % (1991) to 2 % (1993) while the total number of military personnel fell from 297,000 (1991) to 175,000 (1993). See Pérez-López (1996: 135).

7 In 1995, Kim Chŏng-Il allotted 100 pyŏng (330 square meters) of land to military families and 40 pyŏng to individual members of the army (Lim, 2009: 120). The regime maintained a stockpile of 1.2 million tons of rice (about 20 % of total annual consumption) for the military (Jeon, 1999: 134).

8 The most serious of these were the two nuclear tests (2006 and 2009), attempted rocket launches (2009 and 2012), the alleged torpedoing of a South Korean frigate (2010), and the shelling of the South Korean island of Yŏnp’yŏng (2010).

Additional information

Notes on contributors

Tat Yan Kong

Dr. Tat Yan Kong is Reader in Comparative Politics & Development Studies, Department of Politics & International Studies, SOAS, University of London, Thornhaugh Street, London WC1H 0XG.