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N Korea's reformist PM may be
shooting star
By Yoel Sano
As North Korea prepares for a delayed
session of its rubber-stamp parliament, the
Supreme People's Assembly (SPA), the spotlight is
likely to fall on Prime Minister Pak Pong-ju.
Postponed from March 9, the session has been
rescheduled for Monday, but no explanation was
given.
Over the past year, Pak has emerged
as an increasingly prominent member of Pyongyang's
ruling elite. He has accompanied the country's
"Dear Leader" Kim Jong-il on numerous domestic
trips, and on Kim's most recent visit to China
last April. Pak also led a delegation to China
last month, where he toured the country's economic
powerhouses and discussed China's economic
reforms.
All of a sudden, Pyongyang
watchers have hailed Pak as an economic reformer,
one who just might, finally, speed up the
country's tentative transformation to a more
free-market economy. However, while Pak's efforts
are indeed encouraging, he possesses only a
limited ability to revive North Korea's
dilapidated economy. The main obstacles are the
sheer magnitude of his task, the fact that
previous premiers have tried but failed to
engineer an economic turnaround, and the
difficulty in reducing defense spending (estimated
at 30% of gross domestic product, GDP) during the
ongoing nuclear dispute with the United States.
Who is Pak Pong-ju?
Prior to
being appointed premier in a major personnel
reshuffle in September 2003, Pak served as
minister of the chemicals industry. Overall, there
is little if anything in his background to suggest
that he should emerge as a vanguard of economic
reform.
Pak began his career in 1962 as
manager of the Yongchon food factory in North
Pyongan province, becoming an alternative member
of the ruling Korean Workers Party (KWP) Central
Committee in October 1980, and chief of the
Namhung Youth Chemical Combine Committee in July
1983. In May 1993, he became vice director of the
KWP's Light Industries Department, and in March
1994 the vice director of the party's Economic
Policy Supervisory Department. In July of that
year, Pak ranked 188th out of 273 members on the
funeral committee of the late Great Leader Kim
Il-sung, indicating that he was on the periphery
of the elite hierarchy. However, in September
1998, he was appointed to the chemical-industries
portfolio under premier Hong Song-nam, and
replaced him five years later.
Perhaps the
greatest sign of Pak's rising importance was
speculation in early 2004 that Kim Jong-il had
fallen out with his powerful and influential
brother-in-law, Jang Song-taek, over the direction
of economic reform. Pak's reformist views had
apparently prevailed over Jang's opposition.
Pak's poisoned chalice
For Pak,
assuming the post of prime minister was something
of a poisoned chalice, given the dire state of
North Korea's economy. Fifty years of tightly
regulated, centralized state planning - not to
mention occasional micro-management by the two
Kims, the Great Leader and his son the Dear Leader
- and a decade of stagnation following the
isolation of North Korea after the end of the Cold
War has left the economy and population
impoverished. Mass starvation and malnutrition,
chronic power shortages, industrial
under-utilization, and infrastructure decay were
all reported by defectors and visitors. Although
North Korea's economy has registered limited
economic growth in recent years, this represents
only a tiny rebound after the sharp declines since
the late 1980s.
Despite this stagnation,
North Korea's leaders have been slow to respond
with economic reforms, partly out of inertia, but
most probably because these could prove highly
destabilizing for the regime, as was the case in
Eastern Europe and the Soviet Union. On the other
hand, neighboring China managed to implement
gradual reforms over a 25-year period without the
Communist Party losing political control of the
country. The stability of its modernization must
give the Chinese model great appeal to Pyongyang's
policymakers.
Kim Jong-il himself toured
China's economic zones in January 2001, and
appears to have been impressed with what he saw.
Yet it would be another 18 months before Pyongyang
announced, in July 2002, that from that time
onward, prices and wages would be allowed to float
in response to market forces, and would be
dictated by demand and supply. This marked the
start of the current phase of economic reforms,
which many observers now call "irreversible".
Other changes introduced since that date
include allowing farmers to make profits on their
produce, in order to promote efficiency in the
agricultural system after several years of
on-and-off famine that killed as many as 2 million
people. In addition, in October 2002 the regime
established a special administrative region run
under separate laws from the rest of North Korea
in Sinuiju, in the northwest of the country on the
border with China. This capitalist enclave was
designed to lure foreign investment. The regime
also created the Kaesong Industrial Park, just
north of the inter-Korean Demilitarized Zone
(DMZ), which is being developed by South Korean
firms.
However, reports from foreign media
citing defectors from and visitors to North Korea
suggest that rising social inequalities caused by
the reforms may prove destabilizing. The director
general of Japan's Public Security Intelligence
Agency, Takashi Ohizumi, recently told the Reuters
news agency that a widening gap between rich and
poor was leading to increasing criticism of Kim
Jong-il. Ohizumi also warned of a similar rift
within the 1.1-million-strong Korean People's Army
(KPA), which constitutes Kim's main power base.
A gulf between the country's ruling elites
and ordinary North Koreans has always existed -
especially with the Kim dynasty and its closest
supporters acting like medieval Korean nobility.
But this gap is becoming ever more visible,
promoting anger and resentment.
In
essence, Pyongyang is in a race against time in
trying to turn the economy around before the
converging social and political changes pass
beyond the control of the regime and lead to its
collapse. Yet if the country falls victim to
widespread unrest, a conservative, anti-reformist
coup by the military cannot be ruled out.
Pak Pong-ju: A safe pair of
hands
From Kim Jong-il's point of view,
Premier Pak Pong-ju's increasing public profile
does not necessarily threaten his position. By
associating Pak with painful reforms, Kim can
always blame the premier for any resulting public
hardships, thereby deflecting criticism from
himself - even though Pak is almost certainly
receiving authorization and guidance from Kim.
On the other hand, if the reforms
eventually prove successful, Kim Jong-il can still
claim credit for them, arguing that he appointed
Pak and gave him orders all along.
Additionally, Pak's age - he is believed
to be in his late 60s - means that he cannot come
to be seen as North Korea's "next generation"
leader in place of one of Kim's three sons. The
oldest of these is Kim Jong-nam, 34, but he is
thought to have been usurped as heir-apparent by
one of his two younger half-brothers, Kim
Jong-chol, 24, or Kim Jong-un, 22. By the time
either would be ready to take over, Pak would be
at least in his early 80s. This makes him a safer
pair of hands than would a young, fortysomething
hot-shot technocrat who in time could harbor his
own leadership ambitions.
Previous
'reformist' premiers have
failed
Unfortunately for Pak, the track
record of his predecessors does not impress. One
reason for not investing too much hope in Pak is
that he is by no means the first reformist premier
to have come along. Additionally, the post carries
far less weight than it does in countries such as
China, France or Russia, where the prime minister
is often No 2 behind an executive head of state.
Kim Il-sung held the post of premier from
the establishment of North Korea in September 1948
until December 1972, when he elevated himself to
the newly created post of president, apparently to
put himself on the same level as his South Korean
counterpart, General Park Chung-hee. Thereafter,
the post of premier passed successively to two
veteran associates of Kim's days as an
anti-Japanese guerrilla fighter in Manchuria,
namely Kim Il (1972-76) and Pak Song-chol
(1976-77). Both were former military men with
little experience in economic matters.
However, in 1977, realizing that South
Korea was finally starting to overtake the North
in economic terms, Kim Il-sung appointed a career
technocrat, Ri Jong-ok, to the premiership. Ri's
ability to implement reform was limited by the
fact that he had to operate within North Korea's
official communist ideology and its juche,
or self-reliance, philosophy established by the
Great Leader himself. In 1984, Ri was removed from
the post of prime minister, and like his two
predecessors, was elevated to the essentially
ceremonial post of vice president of the republic.
After Ri, a series of technocratic
premiers with backgrounds in industrial management
came and went, but with little to show for their
expertise. Kang Song-san, a maternal relative of
Kim Il-sung, took over in 1984, but his tenure
lasted only until 1986, when he was replaced by Ri
Kun-mo. Ri held the post until 1988, when yet
another reformist technocrat, Yon Hyong-muk, was
appointed. Like Pak Pong-ju, Yon seemed to make a
greater push for reforms. He visited South Korea
in 1990, becoming the first Northern premier to do
so in the country's history. The following year,
he also oversaw the creation of the Rajin-Sonbong
special free trade zone, located in the extreme
northeast of the country, at the border with China
and Russia. Like Sinuiju, Rajin-Sonbong was
supposed to boost foreign investment and attract
foreign companies. Unfortunately, despite its
favorable location, it has largely failed to take
off, its main attraction being a casino and hotel
complex.
As North Korea began to suffer
from the collapse of the Soviet Union - with
Moscow now demanding that Pyongyang pay it
international prices for key imports, instead of
barter trade - Kim Il-sung reportedly received a
candid account of the country's dire economic
situation from ex-premier Kang Song-san, who had
served as party secretary in charge of North
Hamgyong province since his dismissal. Kim
promptly reappointed Kang to the premiership, in
December 1992. Kang's new economic team included a
number of younger and capable technocrats, and it
appeared that the regime at last was taking
economic reform more seriously.
By then,
however, North Korea was coming under increasing
international pressure over its nuclear weapons
program, which left it marginalized on the
international stage. Although Kang officially
ranked second after Kim Jong-il in early 1995, he
disappeared from public view after January 1996,
and was dismissed in February 1997. It was rumored
that his reputation suffered from the 1994
defection of his son-in-law, Kang Myong-do. The
elder Kang was replaced by an aging
career-technocrat, Hong Song-nam, who initiated
the current phase of reforms.
Pak's
headache: 'Military first' policy
It will
not be the fault of Pak Pong-ju if he fails. He
faces a near-impossible situation, and can
probably only revive the economy with widespread
international (especially, US and Japanese)
assistance. Yet for as long as the nuclear-weapons
dispute remains a feature of North Korea's foreign
relations, aid is likely to be limited at best.
Since Pak does not control Pyongyang's foreign and
defense policies - and indeed is not a member of
the all-powerful National Defense Commission,
headed by Kim Jong-il - his ability to improve the
conditions for foreign capital will amount to
little.
Pak's room to maneuver will be
further constrained by North Korea's official
"military first' (Songun) policy.
Defense-related activities consume about 30% of
the gross domestic product (GDP), according to
unofficial estimates by South Korea. Kim Jong-il
has prioritized the allocation of resources to the
military, which is the only group that can
challenge his rule. He must therefore keep the
generals happy.
Meanwhile, the generals
are running an economy-within-the-economy. Kim
Jong-il has reportedly curried favor with senior
officers by appointing several as heads of
"trading houses" dealing with the export of North
Korea's minerals and metals in order to earn hard
currency. It is not clear whether any of this
money is trickling into the civilian sector, but
clearly these funds would be beneficial to Pak's
reform drives.
Even if North Korea's
relations with the outside world were to improve
dramatically, it is not clear whether foreign
investors will flood in, given the country's
appalling human-rights record. Even if democracy
is not the issue, there is still Pyongyang's
unfamiliarity with Western economic practices,
lack of transparency, and poor infrastructure.
Myanmar, after all, has no nuclear-weapons
program, yet it receives hardly any foreign
investment in comparison with neighboring
Thailand, which has for decades enjoyed a more
business-friendly climate.
For now, Pak's
- and North Korea's - main lifeline will be China.
Beijing does not wish to see North Korea collapse,
since this would mean instability on its border,
hundreds of thousands of Koreans fleeing into
China, and the possible deployment of US
"peacekeepers" on its doorstep. As such, it will
continue to provide food and other aid, while
quietly pressing Pyongyang to continue with
reforms that will improve the livelihood of its
people, reduce discontent, and engage the regime
gradually with the outside world.
Pak will
oblige, but with North Korea's level of
development analogous to China's 30 years ago, it
will be a long and winding road.
Yoel Sano has worked for
publishing houses in London, providing political
and economic analysis, and has been following
Northeast Asia for many years.
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