Understanding Kim Jong Un’s Economic Policymaking: Project Overview

A project that reviews the dynamics of North Korea’s economic policymaking under Kim Jong Un, from when he assumed power in December 2011 until 2020

This article was originally published on 38 North.

38 North has launched a project that reviews the dynamics of North Korea’s economic policymaking under Kim Jong Un, from when he assumed power in December 2011 until 2020.1The authors would like to thank Dr. Young Hui Kim, a graduate of Cho’ng Chun-t’aek Wo’nsan University of Economics, who is currently a senior researcher at the Korea Development Bank in Seoul and an expert on the North Korean economy, for her insights on Kyo’ngje Yo’ngu. In the coming months, the authors will follow up with analyses of the specific themes they have identified for closer inspection. Translations of the North Korean economic journal tables of contents and articles used for this project will also be made available on 38 North.

Significance of the Economic Policy Question

North Korea’s economic policy is not just about trade statistics, budget figures or the impact of international sanctions. It revolves around the deeper and broader questions of resource allocation priorities and the balance between central control and latitude in lower-level units. These two issues inevitably have implications for North Korea’s domestic and foreign policy and offer a glimpse of the extent to which Kim Jong Un will carry out economic reform. How the North Korean economic discourse evolves is critical as the country continues to experiment with new ideas and practices to improve its “economic management methods,” a codeword for the country’s reform-oriented economic measures.

A central component of progress toward North Korean denuclearization and improved inter-Korean relations, up to and eventually including unification, will be economic. It will be impossible to successfully implement economic initiatives that could support denuclearization without a full understanding of North Korea’s current and future economic policy calculus. Similarly, steps toward inter-Korean rapprochement and unification must resonate within the framework of North Korean thinking and experience. New ideas and economic concepts cannot simply be imposed from the outside. They will have to be formulated, introduced and implemented in a way that builds on what is already there, either in terms of practice or ideas that have already been discussed.

Methodology and Scope

MethodologyThis project focuses on the timing and sequencing of innovations introduced under Kim Jong Un and the type of opposition they have encountered. Crucially, it pinpoints articles in the regime’s two premier—and publicly available—economic journals that provide a window into the types of ideas which the regime allows for discussion, and the range of policy choices it appears to have seriously examined over the years. We know, for example, that from 2001 to approximately 2006, Kim Jong Il introduced new economic policies, which sparked different shades of opinion observable in North Korea’s main economic journal Kyo’ngje Yo’ngu2This paper uses a modified version of the McCune-Reischauer romanization system for North Korean text. Diacritics are replaced with apostrophes. Some proper nouns will follow internationally recognized spellings or North Korean transliterations instead. and the North’s central media.3Robert L. Carlin and Joel S. Wit, “North Korean Reform: Politics, economics and security,” in Adelphi Paper 382 (London: Routledge for the International Institute for Strategic Studies, 2006), 35-52. We assume, and think we can discern, a similar dynamic at work under Kim Jong Un.

There are many approaches to utilize in setting out on such an analytical journey. One popular method in recent years has been the use of machine-learning tools to examine huge swaths of North Korean text.4See, for example: Soo-hyun Kim and Sohn Wook, “Economic Policy Changes in North Korea: A Text Mining Approach to Economic Research,” Bank of Korea, February 25, 2020, https://www.bok.or.kr/portal/bbs/P0002240/view.do?nttId=10056673&menuNo=200092. This broad-strokes approach of semantic analysis is effective for identifying the general trends of Pyongyang’s areas of interest. But it fails to distinguish between significant and purely propagandistic articles, and overlooks the often-nuanced arguments presented in a pool of select important articles and the domestic or external context in which they appear.

By contrast, we have settled on a traditional but time-tested methodology that relies on refined and tested human understanding and intuition, the result of long experience actually dealing with and observing from a wide variety of angles the North Korean system and its internal media practices.

Scope of Sources: The primary source for this project is the North Korean economic quarterly Kyo’ngje Yo’ngu, translated into “Economic Research.” We will review the Journal of Kim Il Sung University (Economics) to supplement our research of Kyo’ngje Yo’ngu.5The Journal of Kim Il Sung University (Philosophy, Economy) through 2018, and the Journal of Kim Il Sung University (Economics) from 2019. The Journal of Kim Il Sung University (Economics) is the official English name of Kim Il Sung Chonghaptaehakhakpo (Kyo’ngjehak). Throughout the project, we will utilize the party daily Rodong Sinmun in order to compare, and in some cases contrast, Kyo’ngje Yo’ngu articles with the official economic line. We will also utilize North and South Korean open-source materials to check how Kyo’ngje Yo’ngu lines up with major North Korean domestic and foreign policy milestones. Finally, we will use articles and commentary in Choso’n Sinbo, a paper run by the General Association of Korean Residents in Japan (Chongryon). This source often conveys Pyongyang’s views—or at least a version of them—on important domestic and foreign policy issues which the North may be reluctant to comment on so directly in its own voice.

Screenshots of the cover pages of Kyo’ngje Yo’ngu, 2020, Volume 4 (left), and the Journal of Kim Il Sung University (Economics), Volume 66, No. 2, published in 2020 (right), obtained from the website of the Tokyo-based DPR Korea Media (KPM).

Our study reaches back to 2007, when Kim Jong Il’s reform policy started being rolled back, and before Kim Jong Un appears to have been directly involved in policy, though he likely already was being groomed as the successor. One reason for going back to this period is to avoid the pitfall of assuming that arguments—orthodox or reform-oriented—appearing after Kim Jong Un took power were new to his leadership; another is to examine how the North’s economic policies in the last few years of Kim Jong Il’s reign may have shaped his son’s economic policies. Out of nearly 1,900 articles and over 1,500 articles from Kyo’ngje Yo’nguand the Journal of Kim Il Sung University, respectively, we will examine in detail 100 or so from the former and approximately 20 from the latter.

Scope of Topics: Under the broad objective of gauging the regime’s current and future economic policy calculations, our research is driven by a number of questions:

  • What are the general trends observed in Kyo’ngje Yo’ngu? What subjects are covered, and how are they discussed, explained, defended or criticized either on the pages of the economic journal itself or in other North Korean media?
  • How do Kyo’ngje Yo’ngu articles signal new developments or explain changes to previous orthodoxy? How are they reflected—if indeed they are—in official party policies, such as in Kim Jong Un’s speeches, party meetings, or party daily editorials?

Out of a range of topics addressed in the two economic journals, we keyed in on themes that appeared to best represent the leadership’s thinking on reform and competing priorities, recognizing that in any single article, there could be clues and arguments about larger ideological or political issues we might miss. These themes included: socialist principles and economic management; economic systems; prioritization of industries and resource allocation; the accumulation-consumption dynamic;6Whether to put more weight on “accumulation” (investment) or “consumption” has long been a source of debate among North Korean economists and policymakers, going back to the mid-1950s. Traditionalists favor accumulation, which they view as the key to expanding production and improving the people’s livelihood, while reformists regard a balance between accumulation and consumption as necessary for raising the people’s living standards and keeping workers motivated. economic levers; banking; and “revisionism.” Some of these themes appeared to reveal tensions between the traditional views of socialist principles and the more flexible, reformist interpretations, the challenges facing the regime as it pushes its reformist agenda, and the extent to which the regime appears willing to go to implement its economic policy.

This research was made possible through generous support from the Henry Luce Foundation and Korea Foundation.

Read the full analysis on 38 North.

Notes

  • 1
    The authors would like to thank Dr. Young Hui Kim, a graduate of Cho’ng Chun-t’aek Wo’nsan University of Economics, who is currently a senior researcher at the Korea Development Bank in Seoul and an expert on the North Korean economy, for her insights on Kyo’ngje Yo’ngu.
  • 2
    This paper uses a modified version of the McCune-Reischauer romanization system for North Korean text. Diacritics are replaced with apostrophes. Some proper nouns will follow internationally recognized spellings or North Korean transliterations instead.
  • 3
    Robert L. Carlin and Joel S. Wit, “North Korean Reform: Politics, economics and security,” in Adelphi Paper 382 (London: Routledge for the International Institute for Strategic Studies, 2006), 35-52.
  • 4
    See, for example: Soo-hyun Kim and Sohn Wook, “Economic Policy Changes in North Korea: A Text Mining Approach to Economic Research,” Bank of Korea, February 25, 2020, https://www.bok.or.kr/portal/bbs/P0002240/view.do?nttId=10056673&menuNo=200092.
  • 5
    The Journal of Kim Il Sung University (Philosophy, Economy) through 2018, and the Journal of Kim Il Sung University (Economics) from 2019. The Journal of Kim Il Sung University (Economics) is the official English name of Kim Il Sung Chonghaptaehakhakpo (Kyo’ngjehak).
  • 6
    Whether to put more weight on “accumulation” (investment) or “consumption” has long been a source of debate among North Korean economists and policymakers, going back to the mid-1950s. Traditionalists favor accumulation, which they view as the key to expanding production and improving the people’s livelihood, while reformists regard a balance between accumulation and consumption as necessary for raising the people’s living standards and keeping workers motivated.

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