N Korea reforming economy while denying change
PYONGYANG: On the side streets of Pyongyang, small traders sell vegetables from impromptu stalls. At markets, dealers offer imported household goods-even Coca-Cola-and in state-owned department stores hard currency is openly exchanged at black-market rates. Officially, North Korea denies it is reforming and declares it remains guided by the Juche, or self-reliance, philosophy of founder Kim Il-Sung whose 105th birth anniversary is being marked this weekend. But under his grandson Kim Jong-Un-the third generation of the dynasty economic change is quietly happening in the impoverished, nuclear-armed country, analysts say.
The North was once better off than the South, but decades of mismanagement saw it descend into stagnation and food shortages, while its neighbor propelled itself into the OECD group of leading economies. Pyongyang remains almost entirely devoid of commercial advertising, its wide avenues instead lined with propaganda posters of heroic soldiers and striving workers, or slogans such as “Let us follow the decisions of the 7th Congress of the Workers’ Party of Korea”. “We are a socialist country so we stick to our socialist principle economically,” said Ri Sun-Chol, chief of the economic research institute of the North’s Academy of Social Sciences. “We do not push for national reforms adopting a market economy.”
But a series of rulings under Kim Jong-Un is taking the North in exactly that direction, say diplomats and researchers. Many agricultural collectives have been effectively dismantled and farmland management distributed between individual households referred to as “family-based work units”, sending food production climbing.
Beyond what they must produce for the state, under what Pyongyang calls the Socialist Corporate Responsible Management System, factory managers have been given freedoms to find suppliers and customers of their own.
Kwon Yong-Chol, chief engineer of the Song Do Won General Foodstuffs Factory in Wonsan, explained that as well as manufacturing goods according to government instructions, “there is also a commercial network of vendors we use to sign our own contracts.”
‘Filthy wind’
Officials have been told not to interfere with private businesses, even while many remain technically illegal. Enterprises are often still set up under state entities to ensure political protection, but analysts estimate that the private sector, broadly defined, could be responsible for anything from a quarter to half of the North’s gross domestic product. All such figures are riven with uncertainty, as Pyongyang does not publish meaningful economic statistics. Last year, major South Korean think tanks were unable even to agree whether its economy grew or shrank in 2015. — AFP