North Korea: The Show Must Go On! But Can It?

The Seventh Congress of North Korea’s ruling Workers Party (WPK), held “with splendor” (as official media put it) in Pyongyang on May 6-9, was a damp squib. It had been announced back in October, though, with typical furtiveness, the exact date was only revealed on April 25.

This was the first full Party Congress in 36 years. Back in 1980, before the current Supreme Leader Kim Jong-un was even born (he is 33), the Sixth Congress unveiled his father Kim Jong-il – himself the thitherto unseen son of the DPRK’s founder Kim Il-sung – as the latter’s chosen successor. That was a shocking monarchical twist on communism at the time.

Thereafter such meetings lapsed. The second Kim evinced scant concern for due process, or indeed the Party. During his reign (1994-2011) the Central Committee (CC) never met; elderly Politburo members died but went unreplaced. While the WPK atrophied at the top – at the grassroots, its grip on the populace remained tight – the Korean People’s Army (KPA), buoyed by Kim’s military-first policy (Songun in Korean), all but usurped the Party’s political ascendancy.

His son is having none of that. Pyongyang politics is often opaque, while endless incantations of fidelity to past Kims and their doctrines – now Kimilsungism-Kimjongilism, clunky in any language – emphasize continuity. Yet there is change too, usually unannounced. Kim III’s determination to rein in the KPA is plain. Musical chairs are one sign of this. Since December 2011, when his father’s death pitched him into power ready or not, Kim Jong-un has changed his defense minister five times and chief of general staff four times. That is extraordinary.

Toy soldiers are a second ploy. The top military figure, KPA political director Vice Marshal Hwang Pyong-so, is actually a senior career Party cadre, given military rank only in 2011 and uniformed since 2014. His predecessor and rival, Choe Ryong-hae, now recivilianized, has a similar background. One can only wonder what the real soldiers think of such parachuting into high rank.

Above all, Kim Jong-un has rebooted the central Party. Just months after he took charge, in April 2012 a delegates’ conference (a slightly lesser conclave than a Congress, and even rarer) saw the WPK regain a full and functioning CC and Politburo for the first time in nearly two decades. The Party is back in charge – under the Leader, of course. Reviving the Congress, preceded as it was by local provincial and functional (e.g. within the Cabinet and the KPA) congresses to “elect” delegates – all thoroughly stage-managed, needless to say – completed the restoration of what passes for due process in North Korea, even if it did nothing else.

Continuity Rules

The disappointment is that the Congress did indeed do nothing else, and nothing new. This was all about re-establishing formal continuity, not grasping the nettle of much-needed change. The hope had been that going through all this organizational and logistical effort –  not without potential risk – to resuscitate a gathering most North Koreans had either never known about or not expected to see again, meant that a still newish leader wanted a new platform to announce a new Party line and policies. Speculation focused on two areas: the nuclear issue and economic development.

With hindsight, this was a case of hope trumping experience. Kim Jong-un had already made his position clear three years ago. A WPK CC plenary meeting in March 2013 added a new layer to the DPRK’s ideological cake. On top of – by no means instead of – his grandfather’s Juche (self-reliance) and his father’s Songun, Kim III’s watchword is Byungjin. This means tandem, or parallel: equal commitment to both nuclear weapons and economic development.

Byungjin has been regularly trotted out ever since, including at the Seventh Congress. It raises many questions, both as a concept and a reality. The economic pole is new. This was not a theme Kim Jong-il dwelt on, presiding as he did over a meltdown of the old system. In the 1990s the USSR’s collapse and the abrupt end of Soviet aid (self-reliance, bah humbug) saw GDP halve and precipitated a deadly famine in 1996-98; malnutrition remains widespread. Kim Jong-un’s first public speech as leader, though mostly reprising familiar militant and militaristic themes, also included a new note – arguably a bold hostage to fortune. Kim Jong-un pledged the Party’s “resolute determination to let our people who are the best in the world … not tighten their belts again and enjoy the wealth and prosperity of socialism.”

While Kim will never be held to account like a democratic leader, this statement and similar ones are out there. He has raised expectations, but can he fulfill them? That is the key question for North Korea going forward, and like most DPRK questions it has no clear or certain answer.

All visitors to Pyongyang in recent years, including the 128 foreign journalists given visas for the recent Congress (but then kept away from it, to their understandable dudgeon), note signs of growing prosperity and apparent dynamism. These include fresh construction – upscale apartments rather than monuments – more taxis, restaurants, retail shops, and services, plus low-key advertising. Many of these new businesses are privately run, if often in partnership with state bodies. The details are obscure, but this new mixed economy is a striking change.

It is also largely limited to Pyongyang, the showpiece capital and home to privileged elites. The DPRK countryside, as glimpsed by journalists and others, by contrast remains medieval.

Cake and Yellowcake, Too?

The task is huge: to drag the DPRK economy out of the trough where it has been stuck ever since the cataclysmic 1990s. Pyongyang has published no statistics for half a century, but by some estimates much sectoral output has yet to regain its pre-crisis levels of the late 1980s.  

Can Byungjin kickstart growth? Some think so. In a felicitous phrase, the Council on Foreign Relations’ Scott Snyder wrote last year that “there is nothing to stop North Korea from having its cake and its yellowcake, too.” He wisely added “under current circumstances,” noting that increased sanctions had by no means generated enough pressure to fulfill their intended goal of “driving North Korea to make a strategic choice to give up its nuclear weapons.”

That assessment now looks too optimistic, or at least may not continue to hold. There are at least three separate reasons to think Byungjin cannot work over the medium and long term.

One is the old economist’s adage: guns or butter. Economics 101 teaches the obvious zero-sum truth: Given finite resources – extremely finite in North Korea’s case – more of X means less of Y. There is no getting around that, in general or particular. The DPRK’s slowdown in the 1960s and ever since from its initial stellar growth rates was unambiguously caused by Kim Il-sung’s hyper-militarization, even before the Soviet demise turned a chronic crisis into a life-threatening catastrophe. True, some new asymmetrical weapons (e.g. cyberwarfare) are far cheaper than conventional arsenals, but the nuclear effort is hugely costly. The military “second economy” – over which the Cabinet has no control – remains a crippling burden.

An economy starved of capital at home – self-starved, by excessive military spending – must seek it abroad. Kim Jong-un is doing just that, announcing 20 new special economic zones with more in the pipeline. The scale is new, but not the principle. Giving the lie to its vaunted self-reliance, North Korea has always wanted your money: It never had an ideological issue with foreign capital. But it has always struggled to attract any, given badly decayed infrastructure (decrepit transport, unreliable electricity) and a well-earned negative image owing to unpaid debts and other practices. Its single largest foreign investor, the Egyptian conglomerate Orascom, which inter alia built the DPRK’s first 3G mobile network, has been rewarded by seeing its local state partner launch a rival firm and is also unable to repatriate any profits.

This alone would deter most FDI. But a second blow to Byungjin is sanctions, which pit the tandem’s two wheels against each other. Like guns versus butter, this too is a simple either-or proposition: If North Korea brandishes nuclear weapons, the world will not only abstain from assisting its economic development, but must actively seek to impede it, by imposing punitive sanctions. Somewhat ineffectual hitherto, the sanctions regime is now much stronger – on paper at least.

On March 2 the UN Security Council passed – unanimously, as always – its fifth resolution in a decade condemning the DPRK’s nuclear and missile tests: specifically its fourth nuclear test on January 6 (claimed, doubtfully, to be a hydrogen bomb), and its successful satellite launch on February 7, which doubles as a test of ballistic missile technology. UNSCR 2270 extends existing sanctions to mandate cargo inspections and ban or restrict such key DPRK exports as rare earths, coal, and iron ore. UN and other sanctions – the United States, European Union, Japan, and others have their own on top – are a mighty deterrent to doing business with the DPRK. Why would anybody risk incurring the Treasury Department’s wrath and exclusion from the U.S. financial system?

Sanctions are external, but Byungjin’s third problem is internal. Economic growth requires, if not necessarily capitalism, then at least a shift in that direction. In China and Vietnam, since the 1980s, and more recently in Cuba, reforming communist regimes – with varying degrees of enthusiasm, and under sometimes obfuscatory slogans – have all taken similar steps to free up key parts of their economies, notably farms and services, and unleash market forces. Like Margaret Thatcher’s famous TINA (There Is No Alternative), this course is ineluctable. No other way exists to rejuvenate a sclerotic economy where state control has become a fetter.

Reform That Dare Not Speak Its Name

While not quite ignoring this unpalatable truth, North Korea is far from embracing it. Back in  2002 the July 1 Measures, never publicly promulgated, devalued the won (KPW), raised wages and prices, and gave some autonomy to enterprises and their managers. Cautious reform by stealth continues under Kim Jong-un, with no more pushbacks like 2009’s disastrous currency exchange. The June 28 Measures of 2012 and 2014’s May 30 Measures – opaque date-names seem de rigueur – both apparently devolve some production decisions to sub-work teams, meaning family units. But with nothing officially announced, crucial unknowns remain: what exactly is happening and where – are these pilot schemes, or rolled out nationwide? – and how well it is working on the ground (some credit it with improving harvests in recent years). There must be strict limits. The idea that a collective farm (for they are still collective) in the key Hwanghae granary region could ever decide not to supply rice to Pyongyang is surely unimaginable.

Skepticism is wise, given the wider context. The DPRK has three big problems, as usual self-inflicted. First, it is not doing nearly enough, fast enough. Second, the country’s absurd refusal to talk openly about any of this means that reform (still a taboo word) lacks clarity and legitimation. Above all, a wholly unreformed politico-ideological system – if anything tightened by Kim Jong-un’s Party-rebuilding, yet increasingly irrelevant to how most North Koreans now make a living – remains a dead weight, stifling growth and suffocating initiative in a myriad ways.

Here the Seventh Congress was a sadly missed opportunity. Far from making an open or even discreet break with the old ways, it reasserted them. Hundreds of mind-numbing exhortatory slogans, new only in wording, rammed home the fallacy that science, loyalty, and toil are all you need. None hinted that economics is a science too or mentioned markets. The run-up to the Congress saw a dismally old-school 70-day “speed battle”: exhausting everyone, distorting resource allocation, and yielding diminishing returns. Targets were claimed as over-fulfilled, without a statistic in sight. Similarly, this year’s budget in April vouchsafed no hard numbers, just the usual vague percentages. Such pervasive secrecy is incompatible with real reform.

In sum: If Byungjin’s nuclear wheel means further entrenchment of the militarized hothouse society the DPRK has long been, this in itself militates against any economic takeoff. Not to mention the many other burdens and irrationalities, like the sheer cost and opportunity cost of a personality cult: all the statues, parades, hours wasted learning useless lies about leaders’ lives, and so on. None of this is soil in which a healthy economy can grow. That would need space for individuals to make their own market choices, above-board and under no pressure.

Reading page upon page of turgid yet vapid speeches by Kim and others, one gets a strong  sense that North Korea in 2016 is trapped by its own discourse. The very success, on its own terms, of this truly Orwellian project – to put on a perfect show, make all hearts beat and all minds think as one; not a speck of litter on the streets outside, not a smidgen of dissent or debate within – has created a prison, perhaps even for the DPRK leadership, too. If loyalty and fidelity are paramount, this allows no political space for saying some things need to change.

If leaders past and present were and are always absolutely correct (likewise the Party), then errors can hardly be admitted; only the odd – and surely inexplicable – crime, as when Kim scapegoated and purged his uncle by marriage Jang Song-thaek as a traitor in 2013, can be admitted. Nor can the economy be discussed in any meaningful way – let alone the new market economy – since this would puncture the myth. By contrast, China and Cuba, though Party-run dictatorships, have no problem in admitting (within limits) that they have problems, and are stronger for it.

Fifteen years ago we saw a glimpse of how North Korea might, if so minded, dig itself out of this hole. In January 2001 Rodong Sinmun, the WPK daily, carried some very atypical remarks by Kim Jong-il. The first gives the flavor: “Things are not what they used to be in the 1960s. So no one should follow the way people used to do things in the past. A new age ushering in the 21st century requires us to seek perfection in doing everything.” The new century apart, Kim had recently visited Shanghai, whose vibrancy must have concentrated his mind. Yet this new openness was a one-off; thereafter his rhetoric reverted to standard DPRK boilerplate.

In principle Kim Jong-un could have taken such a tack: new times demand new methods. But he flunked the challenge, though less so than reports imply. Pyongyang has yet to publish full translations of his lengthy main report and several other speeches. The summaries it released say next to nothing about the economy. In fact about a tenth of his big speech was devoted to this. But except for a couple of hints, like encouraging private livestock, this broke no new ground. He mentioned a five year plan, but gave no details. Overall, a scathing dig at “the filthy wind of bourgeois liberty and ‘reform’ and ‘openness’ blowing in our neighborhood” was squarely aimed at China, and could not be clearer: the DPRK will not go the same way. (No Chinese were there to hear it; unlike in 1980, no foreign fraternal parties were invited.)

Few Fresh Faces

In personnel too the Congress exhibited more continuity than change, at least at the top. There were no new purges and few meteoric rises. Kim Jong-un’s younger sister Kim Yo-jong, who runs his secretariat, is now a CC member at age 29. At the very apex of the Party, its Politburo Presidium almost doubled in size from three to five; old and new alike are familiar faces.

Besides Kim Jong-un, who took on a new title as WPK Chairman, the pre-existing members were Kim Yong-nam and Hwang Pyong-so. The former is titular head of state from his other post, chairing the presidium (standing committee) of the Supreme People’s Assembly, North Korea’s rubber-stamp parliament, which meets for only one or two days a year (and skipped even that this time). Foreign minister in the 1980s, and tireless at 88, on May 17 Kim Yong-nam passed through Beijing en route to Equatorial Guinea; he seems to have met no Chinese officials in transit. South Korea’s President Park Geun-hye is off to Africa too, on May 25. Two of her destinations, Ethiopia and Uganda, receive military aid from North Korea.

Hwang, the toy soldier, is Kim Jong-un’s closest aide – or more. According to elite defector Jang Jin-sung, he is actually the power behind the throne as head of the WPK Organization and Guidance Department (OGD). That theory seems belied by a photograph last December which showed Hwang kneeling at Kim’s feet. New to the Presidium are Hwang’s rival Choe Ryong-hae, whose three-month disappearance at the turn of the year led to suspicion he had been purged; and Premier Pak Pong-ju, a technocrat who impressed ROK officials in 2002 when he came South on an economic study tour headed by Jang Song-thaek (who did not impress: he seemed bored, and once overslept. His hosts had to wake him, as no North Korean dared to).

Indubitably a modernizer, Pak’s return as premier – he served previously in 2003-2007 – is one sign that Kim Jong-un is serious about the economy. But if he fails to deliver – as he must, if sanctions bite while reform remains elusive – he may be scapegoated and sacrificed. For now though, he is on the up: also joining the Party’s powerful Central Military Commission (CMC) as a rare civilian, perhaps to bring the military economy under Cabinet control or at least oversight.

Another personnel change came after the Congress. Announced in typically eccentric fashion, in a note on May 16 by its embassy in London to the U.K. Foreign and Commonwealth Office (FCO), the DPRK has a new foreign minister: Ri Yong-ho, hitherto one of several vice foreign ministers and a former nuclear negotiator. Some past holders of this post were figureheads, but not Ri. The Congress made him an alternate Politburo member, while also promoting his predecessor Ri Su-yong (no relation) on multiple fronts: full Politburo membership, vice chairman and department director of the CC, and a member of its newly created Executive Policy Bureau.

Name changes are another North Korean peculiarity. As Ri Chol, Ri Su-yong spent 30 years (1980-2010) in Switzerland, managing Kim Jong-il’s bank accounts while supervising his children’s schooling. Despite this intriguing vita, no Western interlocutor sought him out, for instance in New York, which he visited three times on UN business during 2014-2016. Nor did any South Koreans, although Park Geun-hye attended the same UN meetings. Ri was due at Davos this year, but the invitation was rescinded after North Korea’s latest nuclear test.

The shunning looks set to continue. It should be a positive that Pyongyang is fielding, and has empowered, an urbane and personable foreign policy team. Yet their talents may go to waste, due to the nuclear impasse. Far from offering an olive branch (as if), the Seventh Congress reaffirmed the DPRK’s nuclear commitment; amending the WPK’s rules to assert this, just as one of Kim Jong-un’s first acts in 2012 was to write it into the DPRK Constitution. His father, by contrast, practiced strategic ambiguity. The premise of the Six Party Talks held in 2003-2009 was that the other five – China (the host), the United States, South Korea, Japan, and Russia – had good reason to believe that North Korea was moving, however slowly, toward eventual nuclear disarmament. If that is off the table, there can be no table: there is nothing left to discuss.

Pressure or Diplomacy?

Not that this is the end of the story. North Korea’s fraught relations with an outside world it has never trusted go in cycles, depending on its own actions and the reactions of its various interlocutors. Those in the latter may not see eye to eye – especially the United States and China – and there is scope for misjudgment on both sides. To start 2016 with a brace of nuclear and quasi-missile tests was provocative, but Kim Jong-un perhaps did not anticipate quite so sharp a response.

His own motives may have been largely domestic: fireworks to adorn the Seventh Congress. But the United States and South Korea saw a recidivist regime insolently defying the world yet again, rather than a young leader feeling the need to boost his position. Park Geun-hye openly lost patience with what she called Kim’s “runaway” regime. She retaliated by closing down the Kaesong Industrial Complex (KIC): the last inter-Korean joint venture from the “sunshine” decade (1998-2007), when Seoul sought to engage the North. Even China, while insisting that sanctions alone are not the answer, signed up to UN measures far stronger than any before. Kaesong’s demise means that nearly all (90 percent) of Pyongyang’s trade is now with Beijing.

Enforcement is another matter, and early signals are mixed. China is taking less DPRK coal, but this ill wind means more for domestic use. Power stations are amply supplied, so for once electricity is regular and ample. (We shall see if that remains the case, or was a special effort for the Congress.) On the other hand, Chinese customs statistics no longer give a breakdown of DPRK-PRC trade by commodity, which might suggest they have something to hide.

Kim may rant about filthy winds, but his realm depends on China’s support. So far, despite wishful thinking in Seoul and Washington, he can count on that. In Beijing’s eyes, even worse than a nuclear North Korea would be the DPRK’s collapse, with all its risks: a refugee crisis, loose nukes, and likely South Korean or even U.S. intervention. While Kim would be foolish to push Xi Jinping – whom he has yet to meet – too far, the stark geopolitical fact is that as long as China chooses to sustain the Kim regime, nothing that any other power does will have much impact.

Partly for that reason, the current ascendancy of hawks will eventually yield to fresh diplomacy – though not soon, given presidential elections in the United States this year and South Korea in 2017. Unlike Obama, Bill Clinton actively engaged Pyongyang, and Hillary Clinton, if president, may do the same. Donald Trump, ever the maverick, has expressed a willingness to meet Kim Jong-un. In South Korea, the ruling Saenuri Party’s shock defeat in April 13’s parliamentary elections has weakened Park, increasing the chances that the center-left may regain the Blue House next year. (Park cannot run again: her successor will be elected in December 2017 and take office in February 2018.)

Yet the next round of diplomacy, when it comes, will fail unless all parties grow more realistic. The West must shed two delusions: that the DPRK will collapse or will surrender its nuclear arsenal. Both views are wishful thinking and have led to bad policy. The refusal to accept North Korea as a nuclear power is understandable, but futile: the genie is out of the bottle. Containment must be the goal now: for instance, a verified freeze and pledge of non-proliferation under the aegis of a peninsular peace treaty to replace the 1953 Armistice. Beijing is pushing this idea, and there are hints that Washington may be finally ready to entertain it.

North Korea’s delusions run deeper. Worryingly, some recent statements suggest it may think that having the bomb ipso facto renders it a major power, which henceforth can call the shots; and that all else – including riches – will somehow follow. If the implicit mechanism here is nuclear blackmail, then Kim Jong-un will learn the hard way that that game is over: No one is prepared to play any more. Or if he imagines that behind its nuclear carapace North Korea can forge ahead economically in the old way while eschewing reform, he will soon be disabused of that notion too. The DPRK has long been its own worst enemy. The shared challenge for everyone else – to ward off its threats, but also try to guide it into more peaceable and sustainable modes of existence and interaction – will grow no easier in the years ahead.