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Dissecting the ‘new path’

Jan 09,2020
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Kim Byung-yeon
The author is an economics professor at Seoul National University.

North Korea has vowed to take a “new path” defying the U.S. strategy of forcing changes through heavy economic sanctions. North Korean leader Kim Jong-un flagged the possibility of abandoning the path of dialogue in a New Year’s address in 2019. A few months later, he came home empty-handed from summit talks with U.S. President Donald Trump in Hanoi, Vietnam. Washington thumbed its nose at his proposal of dismantling the Yongbyon nuclear complex in return for removal of sanctions. Humiliated, Pyongyang needed a different strategy to use with Washington. After indicating a change of direction last April, he unveiled an action plan at a year-end Workers’ Party convention.

The new strategy places the military in the offensive position, diplomacy in the midfield and the economy taking up defense. Its star player is a yet-to-be-revealed “new strategic weapon.” Although what that refers to is a mystery, Kim claimed its development is for “offensive” action to ensure the sovereignty and security of his state. Pyongyang is sending a message to Washington that it will be coming up with more powerful weapons if it does not hurry with some kind of compensation it can be happy with.

North Korea’s new strategy won’t work. Its biggest weakness is the economy, of course. Kim devoted half of his address to the party on the economy, stressing a battle for a “frontal breakthrough.” Kim pleaded for public confidence in self-reliance in the lengthy confrontation with the United States. But how that’s possible is unclear. He has chosen a near-sighted strategy for a long-term battle. Moreover, the strategy has not been coordinated with other players on the defense. Aid from China and Russia cannot take the place of long-term relief. There are neither strong tactics against powerful sanctions nor eligible players. Moreover, the coach is an amateur who has no knowledge of the basics of defense.

Although he envisions a lengthy battle, Kim’s economic governance has been all show. He praised cultural developments in the mountain regions and congratulated greenhouse farmers and spa construction. Although they were “gifts to the people to enjoy advanced civilization life,” they can hardly be regarded as meaningful achievements to a national economy. They are showpieces that cannot help people who worry about food for their families. Optimization of limited resources is essential for a prolonged battle, and yet Kim is running the economy with the opposite policy.

Defining the confrontation with the United States as a contest between self-reliance and international sanctions, or proclaiming a “frontal breakthrough” through maximization of manufacturing potential are nothing but propaganda. They are aimed at keeping up a bold face for the sake of national dignity. But the country’s thinning foreign exchange reserves show that Kim can not afford a protracted confrontation. The more Kim pushes his policy, the greater pressure will mount on state institutions to keep up their output targets. North Korea cannot reduce imports to keep up supplies of necessary consumer products for its people. Oil, equipment and parts must be smuggled in to produce heavy chemical goods. North Korea’s trade reliance already reached 52 percent in 2014 — just 8 percentage points off the global average. Forcing self-reliance on an economy dependent on external trade could be suicidal.

A policy lacking in consistency could put the fragile economy in greater danger. Kim was right in permitting community farming and socialist corporate responsibility that borrows some concepts from capitalism by enabling some rewards for production. The system allows the government to share profits with farmers and companies. But it could be wrecked under the new order to “strengthen national control and supervision.” The command on “manufacturing and creative” struggle is simply a return to the old state-controlled system that brought about the doom of socialist economy.

The new path is politically risky too. Kim cannot win people’s hearts. Kim has skipped his New Year’s address for the first time. He would have wanted to avoid telling his people to tighten their belts again when he vowed to make them never do so. Public complaints could surge if people are forced to endure greater suffering.

Kim’s new strategy can work if South Korea and the international community are deceived by North Korea to give up efforts to denuclearize North Korea. South Korea then would have to arm itself with nuclear weapons or live forever under the North Korean nuclear threat. The government must not stay idealistic about a so-called peace economy. It must intently work with the United States to keep North Korea on the denuclearization path.

Translation by the Korea JoongAng Daily staff.

JoongAng Ilbo, Jan. 8, Page 31