There is a generally accepted view that a large—perhaps the largest—portion of the DPRK economy in one way or another is devoted to the defense sector, thus starving the civilian economy. This does not seem to be settled policy, however, and has not been for some time. Internal North Korean discussions on defense spending have been and continue to be key indicators of the range of leadership thinking on this central question, not merely in terms of allocation of resources, but in a larger sense, in terms of thinking about economic reform.
The Landscape
There has long been a tug-of-war in the North Korean leadership over military versus civilian spending. National priorities have almost always ended up favoring defense spending, not just for military hardware but also for priority access to talent and technology. To some extent, the debate surrounding those decisions has been conducted in full view. Contrary to the commonly accepted notion that there can be no dissent or inconsistencies in North Korean publications, North Korea’s primary economic journal Kyo’ngje Yo’ngu (Kyongje Yongu)—and to a lesser degree, Journal of Kim Il Sung University (Philosophy, Economy)—has served as a platform for voicing differing views on defense spending. Notionally, the journal is simply a platform for academics, but it is inconceivable that this level of disagreement over such a sensitive topic could be conducted without the concurrence, and more likely the active backing, of various elements in the leadership. In effect, the authors, some of whom are apparently on the leading edge of the discussions, are used to voice the contending views when a policy is under discussion within the leadership, sometimes inserting new ideas or even carefully voicing shades of opposition to the current line, again, almost certainly with high-level backing.
In that vein, over the past two decades, there have been frequent episodes where arguments have broken out in the journal over the value of defense spending, forcing those who favor giving defense industries such a large portion of the pie to justify that position in ways that went beyond simple traditional arguments about the need for strong armed forces. Simply put, there is an underlying argument that the more funds the regime allocates to national defense, the fewer resources can be spent to prop up and revitalize the civilian economy, leaving little room for reform-oriented ideas and measures to take root. In recent years, proponents of defense spending were forced to demonstrate how money in the defense sector is actually good for the economy, supports other non-defense sectors, and stimulates growth overall. The opponents, occasionally with unbelievable boldness, argued that defense spending was money down a rat hole, and actually undermined economic growth.
That debate was very evident in the period of 2001 to 2005, for example, when contending arguments appeared in the economic journal and the pages of the party daily Rodong Sinmunas Kim Jong Il’s efforts to introduce new, reform-oriented economic policies ebbed and flowed.
There was a resurgence of articles in Kyo’ngje Yo’ngu beginning in 2008 again advocating a more balanced approach, and thus implicitly less emphasis on the defense sector. This was despite the North’s hardening line against cabinet-led economic reforms, which culminated in Kim Jong Il’s “June 18 talk” in 2008 with senior party and state economic officials that appeared to be rolling back these reforms. Even after Kim’s stroke in August 2008, when the North seemed to swing toward a harder external line, most notably on the nuclear issue, arguments for more balanced economic policies continued to appear in the journal. There are many possible interpretations for that, but at one level, it suggests that Kim’s efforts to prepare for the eventual political succession consisted of two parts: a shield of toughness against external pressure, and a new look at ways to improve the economy to increase the chances of a smooth transfer of power.
Each year from 2007 to 2010, there were several articles in Kyo’ngje Yo’ngu that dealt primarily with or were exclusively dedicated to the defense industry and its correlation with other industries. These decreased sharply starting with the first volume of 2011, giving way to more articles on economic management—a theme which, as it developed, became increasingly linked with reforms. In other words, just four months after Kim Jong Un’s public debut in 2010, and nearly a year before his father’s death in December 2011, the economic journal was already reflecting a new focus on economic policies associated with reform and less on defense priorities.
Read the full analysis on 38 North.
Understanding Kim Jong Un’s Economic Policymaking: Defense Versus Civilian Spending
By Robert Carlin • Rachel Minyoung Lee
Korean Peninsula
This article was originally published in 38 North.
There is a generally accepted view that a large—perhaps the largest—portion of the DPRK economy in one way or another is devoted to the defense sector, thus starving the civilian economy.1This paper is the second installment of the “Understanding Kim Jong Un’s Economic Policymaking” series made possible through generous support from the Korea Foundation and the Luce Foundation. This paper also uses a modified version of the McCune-Reischauer romanization system for North Korean text, with some proper nouns following internationally recognized spellings or North Korean transliterations instead. For an overview of the project and the project’s scope and methodology, see: https://www.38north.org/2021/05/understanding-kim-jong-uns-economic-policymaking-project-overview/. This does not seem to be settled policy, however, and has not been for some time. Internal North Korean discussions on defense spending have been and continue to be key indicators of the range of leadership thinking on this central question, not merely in terms of allocation of resources, but in a larger sense, in terms of thinking about economic reform.
The Landscape
There has long been a tug-of-war in the North Korean leadership over military versus civilian spending. National priorities have almost always ended up favoring defense spending, not just for military hardware but also for priority access to talent and technology. To some extent, the debate surrounding those decisions has been conducted in full view. Contrary to the commonly accepted notion that there can be no dissent or inconsistencies in North Korean publications, North Korea’s primary economic journal Kyo’ngje Yo’ngu (Kyongje Yongu)—and to a lesser degree, Journal of Kim Il Sung University (Philosophy, Economy)—has served as a platform for voicing differing views on defense spending. Notionally, the journal is simply a platform for academics, but it is inconceivable that this level of disagreement over such a sensitive topic could be conducted without the concurrence, and more likely the active backing, of various elements in the leadership. In effect, the authors, some of whom are apparently on the leading edge of the discussions, are used to voice the contending views when a policy is under discussion within the leadership, sometimes inserting new ideas or even carefully voicing shades of opposition to the current line, again, almost certainly with high-level backing.
In that vein, over the past two decades, there have been frequent episodes where arguments have broken out in the journal over the value of defense spending, forcing those who favor giving defense industries such a large portion of the pie to justify that position in ways that went beyond simple traditional arguments about the need for strong armed forces. Simply put, there is an underlying argument that the more funds the regime allocates to national defense, the fewer resources can be spent to prop up and revitalize the civilian economy, leaving little room for reform-oriented ideas and measures to take root. In recent years, proponents of defense spending were forced to demonstrate how money in the defense sector is actually good for the economy, supports other non-defense sectors, and stimulates growth overall. The opponents, occasionally with unbelievable boldness, argued that defense spending was money down a rat hole, and actually undermined economic growth.
That debate was very evident in the period of 2001 to 2005, for example, when contending arguments appeared in the economic journal and the pages of the party daily Rodong Sinmunas Kim Jong Il’s efforts to introduce new, reform-oriented economic policies ebbed and flowed.2Robert L. Carlin and Joel S. Wit, “Preparation for Economic Reform,” The Adelphi Papers 46, no. 382 (2006): 27-52.
There was a resurgence of articles in Kyo’ngje Yo’ngu beginning in 2008 again advocating a more balanced approach, and thus implicitly less emphasis on the defense sector. This was despite the North’s hardening line against cabinet-led economic reforms, which culminated in Kim Jong Il’s “June 18 talk” in 2008 with senior party and state economic officials that appeared to be rolling back these reforms.3For more on Kim Jong Il’s rolling back of economic reforms, his “June 18 talk,” and the anti-market measures that followed, see 한기범, 북한의 경제개혁과 관료정치 [Han Ki-beom, North Korea’s Economic Reform and Bureaucratic Politics] (Seoul: Daewon Publishing, 2020), 176-205. Even after Kim’s stroke in August 2008, when the North seemed to swing toward a harder external line, most notably on the nuclear issue, arguments for more balanced economic policies continued to appear in the journal. There are many possible interpretations for that, but at one level, it suggests that Kim’s efforts to prepare for the eventual political succession consisted of two parts: a shield of toughness against external pressure, and a new look at ways to improve the economy to increase the chances of a smooth transfer of power.
Each year from 2007 to 2010, there were several articles in Kyo’ngje Yo’ngu that dealt primarily with or were exclusively dedicated to the defense industry and its correlation with other industries. These decreased sharply starting with the first volume of 2011, giving way to more articles on economic management—a theme which, as it developed, became increasingly linked with reforms. In other words, just four months after Kim Jong Un’s public debut in 2010, and nearly a year before his father’s death in December 2011, the economic journal was already reflecting a new focus on economic policies associated with reform and less on defense priorities.
Read the full analysis on 38 North.
Notes
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