North Korean leader Kim Jong Un envisions far-reaching economic reforms to bring his country closer to the form that China is currently taking.
In his speech, Kim Jong Un announced that the “new strategic line” of the Workers’ Party of Korea would be “socialist economic construction”. The aim is to run away from the shadow of South Korea and find an option where the system is simultaneously reformed, but without unlocking centrifugal forces that could lead to the destabilisation of the regime.
For a certain period after the end of the Korean War (1950-1953), the North is richer than the South, but in recent decades, this trend has been completely reversed because of the impressive boom of the South and the collapse of the country-controlled North Korean economy, which has led to a loss of major investment and aid.
So in the 1990 s, the country fell in a severe economic crisis and hundreds of thousands of inhabitants died of hunger and disease. In order to maintain the existence of the regime, Kim Chen Ir has done a final militarisation and accelerates the development of nuclear weapons while promoting partial reforms with market orientation.
In 2016, the average wage was 20 times higher in South Korea, according to Seoul’s statistics. North Korea does not publish any data on its gross domestic product. The economy of North Korea is planned and it is one of the most closed ones in the world. It focuses on the heavy industry and agriculture. The strongest are the weapon, machinery and only recently, the high tech industries.
In the last two years, the North Korean economy has experienced its strongest growth, as estimated by the South Korean Central Bank. However, this trend could be affected by the strengthening of international sanctions. Pyongyang will therefore seek to gain experience from countries such as China and Vietnam, as examples of Communist parties who have taken over capitalism without destroying the one-party system. Moreover, successful reforms will allow authoritarian power even to be strengthened, because greater prosperity strengthens the positions of the regime.
The steps are small, but tangible, such as that once they fulfil their production quotas set by the State, the North Korean plants are free to buy and sell at agreed prices with suppliers and customers. State enterprises can also invest in other sectors of activities through subsidiaries. Thus, the national air carrier Air Koryo started business in the non-alcoholic beverage and taxi sector.
The same applies to agriculture, because the villagers that work for state-owned cooperatives can treat their own areas and sell their products into a market which, in theory, is illegal, but exists in all North Korean cities. This is particularly important because North Korea is among the ten largest fruit producers in the world and takes 15th place in regard to apple production.
