North Korea reforms? Hopes dashed after parliament session

North Korea appears on the verge of major economic reforms but reluctant to announce them while food shortages mount in the most severe test of leadership since Kim Jong-un assumed the titles of power earlier this year.

Experts offered that view after the North’s Supreme People’s Assembly failed to adopt long-awaited laws Tuesday that would have guaranteed greater incentives for farmers to produce needed food for the North’s underfed people.

“Everybody is eager to see the economy getting better,” says Bernhard Seliger, an economist from Germany who was in North Korea last week advising the government on agriculture and other economic issues. “They don’t want to tell so soon what they are doing.”

The need for agricultural reform confronts North Korean leaders with the challenge of how to ram through radical economic reforms in the face of powerful entrenched military and party leaders opposed to sweeping change. A basic question is whether Kim Jong-un will be able to reverse the pattern.

The answer may not emerge right away. The Supreme People's Assembly meets twice a year at most, and the government may announce reforms piecemeal to avoid creating controversy. Change, when it comes, is likely to be a surprise – revealed perhaps by appointments and dismissals of key figures.

“In the economic sector, there have been positive signs that North Korea is undertaking changes,” says South Korea’s unification minister, Yu Woo-ik. “Whether North Korea has the capability of undertaking change or will allow changes to be achieved is another matter.”

The most urgent area in need of change, says Mr. Yu, is “public welfare” – a term that encompasses the problem of feeding the North’s 24 million people. At the same time, he says, “Kim Jong-un’s regime is still endeavoring to stabilize the basis of power.”

That’s one way of saying that Kim Jong-un, surrounded by a tight-knit circle of advisers led by Jang Song-thaek, husband of the younger sister of his father, Kim Jong-il, who died last December, faces huge problems in consolidating his power and following through on reform.

“Stabilization of the economy is a core task in order to stabilize the North Korean regime,” says Yu, a former professor. “For a young leader to succeed will need significant efforts.”

Reform already under way?

Dr. Seliger, who frequently travels to North Korea, says he heard from longtime contacts there that the North has already begun to experiment with one basic reform. “They might reduce cooperative farms to smaller units,” he says. “Now they have huge farms. Instead of 100 families, they would have three or [around that] families on a farm. That would be a great incentive to work harder.”

Experts are dismissing widespread reports before Tuesday’s session that North Korea would increase the percentage of crops that North Korean farmers would keep for themselves and that farmers could keep everything after meeting a certain quota.

The problem with those reports, in the view of experts, is that they fail to take account of the power of top management to determine how much individuals receive.

“They allocate to a target level,” says Ha Tae-keung, a member of the National Assembly here who’s been a leading advocate of human rights in North Korea. “If they go to a certain level, they can take it, but the top level is so high.” As for reports of increasing the percentage of food that individual farmers can receive, he sees huge problems of coordinating the system for millions of perpetually hungry people, many on the verge of starvation.

‘Everybody is eager to see the economy getting better’

Seliger, the German economist based in Seoul, South Korea, with a German foundation, disagrees with reports that North Korea’s economy is showing signs of real improvement.

“In three or four months the foreign exchange rate of North Korean currency has doubled,” he says. “The price of rice is more than double in the same period. People are suffering. They cannot solve the problem unless the state is seriously increasing production.”

He stresses, though, that there’s “nothing new” in reports that North Korea is already giving a higher percentage of crops to those who produce them.

“If you have 1,000 farm members, there’s no real sharing,” he says. “It would all be decided by the management. The incentive is not there.”

Isolated nation

Mystery, however, shrouds what’s really going on. The only legislation announced after Tuesday’s session of the Supreme People’s Assembly was that all students had to complete at least 12 years of education. The announcement also said there had been changes in personnel on the budget and other committees – moves that might or might not be important.

The overwhelming impression among experts here is that North Korea needs time to begin to straighten out the economy.

“There will be many problems, such as the objections of the military,” says Kim Young-hwan, an activist here who once was recruited by North Korea to organize antistate movements among South Koreans but switched sides.  “I think in some years it will work,” says Mr. Kim, “but I am not so optimistic. There are too many obstacles.”

“Whatever Kim Jong-un attempts,” says Kim Sung-hak, a political science researcher at Hanyang University here, “will be limited by lack of party and military support.” The problem, he says, is that “their military ideology has not changed.”