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For North Korea’s leader, it’s the economy

Apr 19,2018
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The first face-to-face interaction between South Korean President Moon Jae-in and North Korean leader Kim Jong-un is only eight days away. In a four-part series, the JoongAng Ilbo analyzes Kim’s major change of course this year, the struggles of the country’s economy that could have triggered that change and Kim’s powerful inner circle.

The North Korean song that best reflects the era of Kim Jong-un might be “Without a Break” by the Moranbong Band, an all-female group favored by the 34-year-old leader. Its upbeat electronic sound resonates through Pyongyang concert halls whenever the North tests a missile or nuclear weapon.

“Without a Break” reflects Kim’s will to preserve the country’s socialist ideals on which it was founded while overcoming economic hardships through scientific and technological development. Hoping to depart from the era of his father’s rule, when tens of thousands of people starved to death in the worst year of the nationwide famine, the younger Kim, who rose to power in late 2011 after his father’s death, promised a new era of hope.

On April 15, 2012, during his first public speech as leader, Kim told his people that they would no longer have to tighten their belts. It was essentially a declaration that he would prioritize the economy.

Six years later, there are signs of change, at least on the streets of Pyongyang. Western-style restaurants, aquariums, water parks, neon lights and street lamps are everywhere. One recent visitor to Pyongyang noted that the capital definitely seemed more posh than before Kim Jong-un started ruling the country, a statement echoed by other North Korea watchers.

The number of cellphone users in the entire country has gone from 3.6 million in late 2016 to five million today, according to Statistics Korea, the South’s government data agency. The Bank of Korea in Seoul estimates that per-capita gross national income in the North has exceeded $1,200 since Kim Jong-un took over the country, up from below $1,000 under his father.

Government officials in Seoul say a change that has especially impacted North Korean society is Kim Jong-un’s greater tolerance for marketplaces. Under his father, black markets where people could barter for goods were tolerated but restricted. Now, South Korean authorities believe there are over 500 permanent markets in North Korea.

“A manager-level official in the ruling Workers’ Party gets paid about 4,000 won ($3.75) in monthly salaries, which is hard to get by with when you have three other members in your family,” said a North Korean defector who worked as a high-level official in the country before escaping to South Korea. “People make more money at the markets, and North Korean authorities don’t hamper the trade.”

But the future of North Korea under Kim’s rule is far from rosy. The country carried out 17 missile tests and one nuclear experiment last year, leading the Trump administration in the United States to call for a “maximum pressure campaign.” That meant harsh sanctions of unprecedented levels against the regime. China, North Korea’s biggest trading partner, jumped on the bandwagon, sending their relations to their lowest in years.

Under current United Nations Security Council resolutions, the North is prohibited from exporting coal, iron, seafood and textiles. It is also banned from sending workers to foreign countries. Their labor pool was once a source of hard cash to prop up the country’s weapons program.

An assessment of Chinese customs data by the Korea International Trade Association in the South shows that bilateral trade between North Korea and China shrank to $4.98 billion in 2017, down 14.5 percent from $5.83 billion the year before.

Jeong Hyung-gon, a senior research fellow at the Korea Institute for International Economic Policy, estimated that North Korea’s export volume dipped 66 percent last year compared to 2016 after the UN Security Council imposed a coal ban in resolution 2321. Coal used to take up 45 percent of North Korea’s total exports.

Chin Hee-gwan, a professor of unification studies at Inje University in Gimhae, South Gyeongsang, said the international sanctions were starting to choke North Korea’s economy. And because the North Korean public has already gotten a taste of capitalist values by trading in markets, Kim Jong-un might experience a fatal blow in his leadership if he fails to get the economy back on its feet.

Kim has periodically declared “speed battles” to get people in his country to work longer and harder without taking a single day off. It is a national campaign that the regime resorts to in order to increase production in the face of international pressure.

But as North Korea finds itself economically shunned by the outside world, even by its biggest ally, Kim will have to use the upcoming summits with South Korea and the United States to explore a fast exit from the status quo.

BY KO SOO-SUK, JEONG YONG-SOO [lee.sungeun@joongang.co.kr]