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     Dec 13, 2006
Page 1 of 3
North Korea turns back the clock
By Andrei Lankov

Last Thursday in Seoul, the influential opposition daily newspaper Chosun Ilbo published a government document that outlined the plans for South Korean aid to be shipped to North Korea in the next financial year. In spite of the nuclear test in October and a series of missile launches last summer, the amount sent to Pyongyang this year was record-breaking - nearly US$800 million. If the document is to be believed, the target for the next year is set at an even higher level of 1 trillion won (about $910 million).

This generosity might appear strange, since technically both

Koreas are still at war. However, it has long been an open secret that this is not the war the South wants to win, at least any time soon. The Seoul politicians do not want to provoke Pyongyang into dangerous confrontation, and they would be unhappy to deal with the consequences of a sudden collapse of Kim Jong-il's dictatorship. Now South Korea wants a slow transformation of the North, and is ready to shower it with aid and unilateral concessions.

Many optimists in Seoul believe this generosity will persuade Pyongyang leaders to launch Chinese-style reforms. However, so far no significant reforms have happened. On the contrary, news emanating from the North since late 2004 seems to indicate that the government is now working hard to turn the clock back, to revive the system that existed until the early 1990s and then collapsed under the manifold pressures of famine and social disruption.

Signs of this ongoing backlash are many. There were attempts to revive the travel-permission system that forbids all North Koreans to leave their native counties without police permission. Occasional crackdowns have taken place at the markets. There were some attempts to re-establish control over the porous border with China.

Finally, in October 2005 it was stated that North Korea would revive the Public Distribution System, under which all major food items were distributed by state. Private trade in grain was prohibited, so nowadays the only legitimate way to buy grain, by far the most important source of calories in North Koreans' diet, is by presenting food coupons in a state-run shop. It is open to question to what extent this ban is enforced. So far, reports from northern provinces seem to indicate that private dealing in grain still takes place, but on a smaller scale.

From early this month people in northern provinces are allowed to trade at the markets only as long as an aspiring vendor can produce a certificate that states that he or she is not a primary breadwinner of the household but a dependant, normally eligible to some 250 grams of daily grain ration (the breadwinners are given 534 grams daily). It is again assumed that all able-bodied males should attend a "proper" job, that is, to be employees of the government sector and show up for work regularly.

In the past few years the economic situation in North Korea was improving - largely because of large infusions of foreign aid. If so, why are the North Korean leaders so bent on re-Stalinizing their country, instead of emulating the Chinese reform policy that has been so tremendously successful? After all, the Mercedes-riding Chinese bureaucrats of our days are much better off than their predecessors used to be 30 years ago, and the affluence of common Chinese in 2006 probably has no parallels in the nation's long history.

The Chinese success story is well known to Kim Jong-il and his close entourage, but Pyongyang leaders choose not to emulate China. This is not because they are narrow-minded or paranoid. The Chinese-style transformation might indeed be too risky for them, since the Pyongyang ruling elite has to deal with a challenge unlike anything their Chinese peers ever faced - the existence of "another Korea", the free and prosperous South.

The Chinese commoners realize that they have not much choice but to be patient and feel thankful for a steady improvement of living standards under the Communist Party dictatorship. In North Korea the situation is different. If North Koreans learn about the actual size of the gap in living standards between them and their cousins in the South, and if they become less certain that any act of defiance will be punished swiftly and brutally, what will prevent them from emulating East Germans and rebelling against the government and demanding immediate unification?

Of course, it is possible that North Korean leaders will somehow manage to stay on top, but the risks are too high, and Pyongyang's elite do not want to gamble. If reforms undermine stability and produce a revolution, the current North Korean leaders will lose everything. Hence their best bet is to keep the situation under control and avoid all change.

Until the early 2000s the major constraint in their policy was the exceptional weakness of their own economy. For all practical purposes, North Korea's industry collapsed in 1990-95, and its Soviet-style collective agriculture produces merely 65-80% of the food necessary to keep the population alive. Since the state had no resources to pay for surveillance and control, officials were happy to accept bribes and overlook numerous irregularities.

However, in recent years the situation changed. Pyongyang is receiving sufficient aid from South Korea and China, two countries that are most afraid of a North Korean collapse. The nuclear program also probably makes North Korean leaders more confident about their ability to resist foreign pressure and, if necessary, to squeeze more aid from foes and friends (well, strictly speaking, they do not have friends now).

With this aid and new sense of relative security, the North Korean regime can prevent mass famine and restart some essential parts of the old system, with the food-distribution system being its cornerstone. This is a step toward an ideal of Kim Jong-il and his people, to a system where all able-bodied Koreans go to a state-managed job and spend the entire day there, being constantly watched and indoctrinated by a small army of propagandists, police informers, party officials, security officers and the like.

No unauthorized contacts with the dangerous outside world would be permitted, and no unauthorized social or commercial activity would happen under such system. Neither Kim nor his close associates are fools; they know perfectly well that such a system is not efficient, but they also know that only under such system can their privileges and security be guaranteed.

This is a sad paradox: aid that is often presented as a potential incentive for market-oriented reforms is actually the major reason

Continued 1 2

Why N Korea's neighbors soft-pedal sanctions (Nov 30, '06)

Pyongyang watches as friends fall out (Nov 18, '06)


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