The Primary Importance of the DPRK Reshaping its Economy in 2001

|Korean Peninsula

The Democratic People’s Republic of Korea (DPRK) has improved its ties with China, Russia and Western countries as well as establishing relationships with international organizations all at once as a result of the summit with the Republic of Korea (ROK) last June. The country has also worked actively to improve the relationships it was concerned about, with the U.S and Japan. However, the U.S. Presidential election interrupted negotiations when they had reached an advanced stage, and in the transition from the Clinton to the Bush administration, which is anticipated, against expectations, to execute a strict policy towards China and the DPRK, political progress will inevitably falter as prospects for a presidential visit to the DPRK fall by the wayside. In addition, the anticipated economic exchange between the DPRK and the ROK, which is indispensable for the DPRK to reform its economy, hasn’t progressed due to the recent recession in the ROK and the cooling down of the fever in the corporate sector of the ROK. Furthermore, the Hyundai Group, a leader in private economic exchanges with the DPRK, has been so directly affected by economic crises that cooperative projects and private economic exchanges are at a standstill.

In a related development, reports dealing with the DPRK have come into prominence in the Japanese media, e.g. there will be a shortage of 2 million tons of grain this year, which is worse than last year; an unusually cold spell has hit the country and affected economic activities, etc.

On the contrary, “Rodong Shinmun”, a newspaper in the DPRK, carried an article on December 29th, 2000, at the end of the 20th century, entitled “We reminisce with a deep impression”, in which the country demonstrated its high spirits by praising the glory of the nation that has maintained a socialist system, despite the collapse of socialism in the Soviet Union and Eastern Europe, and has advanced to become a powerful socialist nation.

Also, the joint editorial of three newspapers, including “Rodong Shinmun”, on January 1st and 4th, introduced the Supreme Leader Kim Jong Il’s statement on the necessity of developing and promoting its economy by casting aside old idealistic notions and time-honored precedent, as well as introducing the newest equipment and technology confidently to adjust all its business to the needs of the new century.

I would like us to pay attention to the facts which support his statement and let us anticipate the beginning of the actions for the future which emerged at the end of last year.

That is, the cabinet member related to economic issues was suddenly replaced on December 28th last year. Prior to that, the supreme leader sent the party members to Shanghai and a special economic zone in the south of China from October to the end of the year. In particular, it is noticeable that the supreme leader himself unexpectedly visited China on January 16th this year and inspected factories with the latest technological equipment in a Japanese-affiliated joint venture and stock exchange in the Shanghai Pudong Area.

His visit to China can be seen as a part of his attempt to deal with anticipated political problems in the future relationship with the U.S. However, we should take these matters more seriously than merely political issues which indicate how the country was going to deal with its economic problems. The inspection of the state-of- the-art factories in Shanghai, which have enjoyed the prosperity of market-oriented economic reform, was not simply to learn the technology of the equipment. It indicates that while the DPRK maintains conventional “Our-Style Socialism”, the country is trying to invite foreign investment and high-technology to make the first step towards the reformation and development of its economy by presenting the notion of the special economic zone in China, although it is limited to a special area and a specific factory.

[Translated by ERINA]