When we launched this research project last year, there were fundamental questions about the North Korean economy we felt needed to be examined: How does Pyongyang view its key economic and financial interests? How do those interests translate into policy decisions? How, once decisions are made, are new policies rolled out? And is there any pushback to those policies from within?1 Note: This paper 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 Rachel Minyoung Lee and Robert Carlin, “Understanding Kim Jong Un’s Economic Policymaking: Project Overview,” 38 North, May 28, 2021, https://www.38north.org/2021/05/understanding-kim-jong-uns-economic-policymaking-project-overview/. On the evolution of North Korea’s defense spending policy, see Lee and Carlin, “Understanding Kim Jong Un’s Economic Policymaking: Defense Versus Civilian Spending,” 38 North, September 22, 2021, https://www.38north.org/2021/09/understanding-kim-jong-uns-economic-policymaking-defense-versus-civilian-spending/. For North Korea’s banking policy, see Lee and Carlin, “Understanding Kim Jong Un’s Economic Policymaking: Pyongyang’s Views on Banking,” 38 North, December 22, 2021, https://www.38north.org/2021/12/understanding-kim-jong-uns-economic-policymaking-pyongyangs-views-on-banking/. It seemed that too often, discussions of North Korean economic policy are constrained by common wisdom about “regime survival.” We sought to break out of this straitjacket and examine internal regime consideration of broader questions concerning resource allocation and the balance between central control and autonomy for lower-level units.
Though we understand why the North Korean economy is usually discussed in the context of details such as trade, market price and foreign exchange rate data, our view was that these issues would be better raised after a careful look at the larger frame in which the smaller data points make sense.
Since Kim Jong Un’s assumption of power at the end of 2011, these larger, more fundamental policy concerns appear to have been a focus of intra-regime discussions. The central question—explicit and implicit—was how to boost the economy by increasing incentives for workers and farmers and by easing, though certainly not abolishing, higher-level state and party control. These tensions became evident when examining discourse in the Democratic People’s Republic of Korea (DPRK)’s economic journals Kyo’ngjeYo’ngu and Hakpo—the Kim Il Sung University journal of economics. Articles in the journals provided guideposts for understanding Kim Jong Un’s commitment to implementing what in North Korean terms amounts to a form of economic reform. Tracking this evolution over time provided a window into the process of the North’s continuing experiments—moving ahead, tacking, falling back—with new economic ideas and practices.
North Korean thinking about economic policy tells us more than just what reforms the regime is contemplating. While often overlooked, it should always be a central component in considering a range of issues that seem much higher on the list of concerns to the outside world—namely denuclearization, inter-Korean ties, and US-DPRK relations. To the extent positive movement on any of these is possible, they will inevitably have an economic component, and the effectiveness of that component will depend on how well it resonates with Pyongyang’s economic policy thinking. Simply projecting onto North Korea what we believe they should want will not work. Instead, greater consideration is needed of what already exists in terms of concepts, perspectives and goals in the regime.
Understanding Kim Jong Un’s Economic Policymaking: A Review & Implications
By Robert Carlin • Rachel Minyoung Lee
Korean Peninsula
Originally published on 38 North.
When we launched this research project last year, there were fundamental questions about the North Korean economy we felt needed to be examined: How does Pyongyang view its key economic and financial interests? How do those interests translate into policy decisions? How, once decisions are made, are new policies rolled out? And is there any pushback to those policies from within?1 Note: This paper 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 Rachel Minyoung Lee and Robert Carlin, “Understanding Kim Jong Un’s Economic Policymaking: Project Overview,” 38 North, May 28, 2021, https://www.38north.org/2021/05/understanding-kim-jong-uns-economic-policymaking-project-overview/. On the evolution of North Korea’s defense spending policy, see Lee and Carlin, “Understanding Kim Jong Un’s Economic Policymaking: Defense Versus Civilian Spending,” 38 North, September 22, 2021, https://www.38north.org/2021/09/understanding-kim-jong-uns-economic-policymaking-defense-versus-civilian-spending/. For North Korea’s banking policy, see Lee and Carlin, “Understanding Kim Jong Un’s Economic Policymaking: Pyongyang’s Views on Banking,” 38 North, December 22, 2021, https://www.38north.org/2021/12/understanding-kim-jong-uns-economic-policymaking-pyongyangs-views-on-banking/. It seemed that too often, discussions of North Korean economic policy are constrained by common wisdom about “regime survival.” We sought to break out of this straitjacket and examine internal regime consideration of broader questions concerning resource allocation and the balance between central control and autonomy for lower-level units.
Though we understand why the North Korean economy is usually discussed in the context of details such as trade, market price and foreign exchange rate data, our view was that these issues would be better raised after a careful look at the larger frame in which the smaller data points make sense.
Since Kim Jong Un’s assumption of power at the end of 2011, these larger, more fundamental policy concerns appear to have been a focus of intra-regime discussions. The central question—explicit and implicit—was how to boost the economy by increasing incentives for workers and farmers and by easing, though certainly not abolishing, higher-level state and party control. These tensions became evident when examining discourse in the Democratic People’s Republic of Korea (DPRK)’s economic journals Kyo’ngje Yo’ngu and Hakpo—the Kim Il Sung University journal of economics. Articles in the journals provided guideposts for understanding Kim Jong Un’s commitment to implementing what in North Korean terms amounts to a form of economic reform. Tracking this evolution over time provided a window into the process of the North’s continuing experiments—moving ahead, tacking, falling back—with new economic ideas and practices.
North Korean thinking about economic policy tells us more than just what reforms the regime is contemplating. While often overlooked, it should always be a central component in considering a range of issues that seem much higher on the list of concerns to the outside world—namely denuclearization, inter-Korean ties, and US-DPRK relations. To the extent positive movement on any of these is possible, they will inevitably have an economic component, and the effectiveness of that component will depend on how well it resonates with Pyongyang’s economic policy thinking. Simply projecting onto North Korea what we believe they should want will not work. Instead, greater consideration is needed of what already exists in terms of concepts, perspectives and goals in the regime.
Read the full analysis on 38 North.
Photo: Rodong Sinmun
Notes
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