Yves here. The sensationalistic headline is based on what the author Barkley Rosser presents as a sensationalistic account about North Korea at the Washington Post, but Rosser then points out that the underlying information looks to be accurate. The short version is that North Korea tried to loosen China’s choke chain by developing other markets for exports, which isn’t working very well. That might lead Kim Jong Un to act out, although North Korea’s finely honed saber rattling is more likely.
Since this is a part of the world I haven’t had time to study, informed reader input is encouraged.
By Barkley Rosser, Professor of Economics at James Madison University in Harrisonburg, Virginia. Originally published at http://econospeak.blogspot.com/2021/01/the-end-of-embargo-against-qatar.html” rel=”nofollow”>EconoSpeak
This is what was forecast in a column in the Washington Post by Victor Cha. He sees a combination of economic collapse, massive spread of Covid-19, and a standard desire when a new US president to enter office to be behind a possible outbreak of military assertiveness, possibly exacerbated by a much more serious collapse of the DPRK economy and society. I suspect this is overdone, but there are definitely some major problems going on there, with much of the new attention on this coming out publicly as a result of a major address by Kim Jong Un at the 8th (only?) Korean Workers’ Party Congress, where he openly admits failures to meet Five Year Plan targets for almost everything and calls for a massive tightening of policy with a reassertion of stricter state control of the economy.
I have double checked this by checking on the North Korean Economy Watch blog, which has an extensive report on Kim’s speech, and also seems to avoid the hysterical edge that Cha takes, although with the departure of his pal, Trump, along with all his internal problems, I can imagine Kim may well be tempted to stir up some sort of trouble. Anyway, some details.
Indeed, targets for almost everything have not been met, ag production, manufacturing, and more. The one manufacturing sector that seems to be holding up, and was described as “the core industrial sector,” something I have not see claimed before, is the chemical industry. Apparently it is doing so well there is almost no use for some of its output, although what is useful is going to be fertilizer and other inputs to agriculture.
Both the blog and Cha noted a major collapse of international trade, with trade with China down 70%, Cha’s leading evidence for a more general collapse, although the blog does not seem to be quite as dramatic about economic collapse and does not suggest that some broader or bigger one will happen, much less some major social upheaval as Cha argues. The blog notes that one failure of the plan has been that there was a goal to diversify trade away from such a focus on China, but that has not happened at all. This in effect pushes the DPRK back onto its traditional juche self-sufficiency ideological schtick.
There has been apparently a major crackdown on a lot of private businesses, which are now a much larger part of the economy than many realize. This is where Cha forecasts an upheaval, suggesting many North Koreans will resist being forced to turn over foreign hard currency for worthless North Korean won. The blog notes foreign currency traders have been especially hard hit in arrests. It also says that there is a push for more local control of a lot of the private firms, which are especially prominent in ag and food.
There is however, along with the chemical industry hanging in there, plans for more development of nuclear weapons and advanced delivery systems, with ICBMs capable of hitting the entire US now being developed. This is another development that has Cha worked up.
The blog also notes that there seems to be a renewed emphasis on control of “cultural production” and other such matters, all going along with the general tightening and move toward orthodox views. Indeed, the blog says this is the end of hopes many had that market experiments and other loosenings that went on early in Kim’s regime now seem to be seriously over.
Not clear what is going on with Covid-19, although part of the trade decline with China is due to DPRK sealing off borders seriously. They claim no cases, but Cha thinks the place is overrun with it. The blog reports nothing on this front. Whatever is going on is being kept secret.
Probably is hyperventilating and things will not be as bad in North Korea as he predicts, with Kim hopefully not going completely gonzo. But it does seem likely that the incoming Biden admin will face some sort of unpleasant challenge out of there, quite likely pretty soon, which may be quite difficult to deal with. Welcome to the White House, Mr, Biden!
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A point on the articles questioning about the Congress being only the 8th – the Party congresses are very occasional events, there was a 36(!) year hiatus between the 6th and 7th. I don’t really know what status it has beyond the normal annual congress, I think its the equivalent of an EGM, but with a much wider group of attendees than is normal (i.e. lots of on the ground Party activist as well as the usual bigwigs).
I don’t know if there is any evidence of real internal strife within North Korea. I’m an occasional Korean watcher as I find the region’s politics fascinating, but even the constant naysayers haven’t been predicting imminent collapse (note, by the way that US commentary on Korea is heavily influenced by the right wing evangelical fringe, which has a very strong presence among Korean-Americans, even while their influence wanes in Korea). But it would be surprising if the combination of Covid and sanctions hasn’t caused a lot of stress. I’d suspect that informal trade and remittences from China have been severely impacted. But certainly nothing like the famines that have struck the country regularly in the past. Previously, when North Korea has been under economic stress, they’ve acted up to try to squeeze some sort of economic concessions from the Chinese or South Koreans, but I’ve not seen any examples of this.
My guess is that the main influence on this Congress has been China – not directly, but the north Koreans have no doubt been watching carefully what Xi has been doing – I would guess that their assessment is that the Chinese feel that they made a mistake in allowing markets too much freedom, and are now returning more to ‘basics’, in terms of control. As China has (so far) been very successful, its unsurprising that this would have given conservatives within North Korea a useful example in internal arguments. So I think we see a lot of shadowing of Chinese politics going on.
It is peculiar that Kim was so forthright in admitting that the 5 year plan was largely a failure. There is a ring of truth to some of what he said that indicated that its not all politics, it was the equivalent of a CEO listing out all the problems to senior managers to make it clear to them that he want them sorted, and he wants it now. Its also probably a reflection that as it was the main Party congress, there would be a lot of ‘on the ground’ attendees, who would not be fooled by a recitation of fake statistics. So Kim had to ground his talk in some sort of reality.
Either way, it seems that North Korea is not liberalising, it is not intent on either reunification or becoming a Chinese or Russian puppet, its going its own way, for better or worse. I doubt its going to collapse any time soon, so lets hope that Biden shows a little common sense and takes advice from the South Korean government rather than his own neocons.
Yes, Kim’s admission was very surprising, more so as it’s one of the very very rare occasions the system said openly something went wrong. The closes I can think of is Khruschev denoucement of Stalin.
I believe it very likely that Kim will do something post Biden, at least to elicit a reaction and test the waters. He might even ask Chines to pay him for it, because it will benefit both (while Kim will have more to lose).
That said, the fall of the Berlin Wall (and the whole 1989 change-of-regime) was entirely and totally out of the left field for all USSR block watchers and most local dissidents.
But I’ve heard unconfirmed voices that it was way less of a surprise to the higher-ranking members of the elites, of which apparently many expected something like that ever since Gorbachev’s perestroyka (because they knew the system was a charade, and any semi-serious attempt to reform would sink it) and prepared for it. It’s certainly true that many of the newly minted rich have dubious connections to the former regimes power figures, and often got the initial kick on their roads to riches by even more dubious and suspect means.
Re: Biden taking advice from his own neocons. That didn’t work out so well for Trump, who came out firing and thinking that he could subdue Kim through tough talk, mocking (calling him rocket man) and threats of escalation. All that bravado and chest thumping achieved nothing, save for a historic meeting when both sides briefly softened the rhetoric but hardly any important pieces on the chess board were moved. My own belief is that DPRK will continue being a headache for incoming US presidents and South Korea for the foreseeable future. Additionally, 3 bona fide nuclear powers (including China and Russia) as enemy states, and one, Iran, alleged (the only “evidence” being Netanyahu’s comical drawing) to be developing them is enough to keep US attention divided, so I doubt Putin and Xi will do anything to quietly encourage Kim to fall in line with US demands, quite the opposite actually.
None of this will dissuade Biden from the well worn tradition of tough talk by incoming presidents as it appears the neocon leaning constituency is always the one that needs the most appeasing, especially during the early days of a presidency. In other words, I believe Biden will stick to tradition, ratchet up the volume, achieve very little in extracting concessions/compliance from Kim and quietly move on to other things.
I think that you have it right about North Korea doing an about turn on their economic strategy. There is a guy named Pak Bong Ju who has been removed from the party’s Executive Committee. He was their czar in charge of North Korea’s marketization as well as moving away from China’s economy. As that has not worked out, his services as a czar are now no longer required-
https://asiatimes.com/2021/01/kim-promotes-self-demotes-sister-in-pyongyang-power-puzzle/
Tourettes-like “Pyongyang is about to collapse under its own weight!” outbursts are part of a hallowed, decades-old Washington rite that none of us should be at all startled to see once again this year. To pick just one example, one of the high priests of the rite is none other than… Victor Cha, cited above, who is coming up on the ten-year anniversary of this apotheosis of the genre in the NYT:
An actual Korea expert, Bruce Cumings, is far more sanguine:
Could possible statistics possibly pointing to possible less trade with China spell the possible collapse of the North Korean government? Possibly. But not likely.
When I saw that first sentence, I thought “c’mon”—as Victor Cha has a track record of being been consistently wrong and consistently ideologically hawkish.
Everyone has their own take—-mine is that NK/Kim wants to thread the needle and have NK become the next Vietnam in terms of economic development—heck, even Cambodia is lapping North Korea.
….If only the US will let NK have economic growth without regime change. I somehow doubt that given the appointments that Biden has announced so far.
And ya, I’d give more weight to Cummings than anything from Cha.
It’s kinda hard to say. I gotta admit that Cha is an unabashed warhawk so there isn’t really anything he can say that would sway my mind. Kim Jong Un’s speech focused on internal issues and didn’t even mention the United States beyond a passing reference to “reactionary forces”. That couldn’t honestly mean anything besides a minor slap at the US.
The real question is how successful will South Korea be in swaying members of the Biden administration. Moon is still advocating for dialogue and negotiations in the aftermath of the Singapore conference. Which means that the door Trump walked through is still open. I just hope that the Biden administration will be more receptive to Moon’s ideas on how to manage joint relations with the North.
Yves, your request for informed reader comment on this topic is very refreshing. Comments to articles on North Korea frequently stoop to caricature that does nothing to inform. So thank you for your request for informed (and enlightening) comments.
That said, realistically I don’t think it is possible to provide informed comment on North Korea simply because the information flow from that country is too tightly controlled. Any information I’ve found that purports to comment on North Korea itself has usually been indirectly sourced necessitating a speculative interpretation. Much of it is also ideologically driven.
It should, however, be possible to have much better informed comment on events or stories coming from our societies.
Victor Cha is not a stranger to North Korea and, as mentioned by both RabidGhandi and Robert Watts, has displayed a certain predisposition in his writings. When it comes to credibility, then, who has been proven correct – Mr Cha or Mr Cummings? As far as I can see, DPRK is still there. To me, that at the very least seems to confirm that Mr Cummings provides more reliable insight but then why is the Washington Post publishing an article from Mr Cha along the same lines as previous articles that have not proven to be the case? And why now?
Answer: there is a new US administration. Obviously, it is because those people that have been involved in establishing Washington’s policy towards the DPRK over the past 20-30 years want it to continue. It is equally obvious that that policy has failed in its stated goals of keeping the Korean peninsula free of nuclear weapons, but perhaps its goal is not what it is stated to be.
That is as far as I can go with it myself. I would speculate that that policy makes a lot of money for certain factions from weapon sales to the region, but I don’t know.
But I can certainly anticipate that we would get a lot more informed reader comment on that matter than on what the intention of the leaders of North Korea might be.
I haven’t said anything on the ROK situation because this post is already too long and I am short of time right now. But it is not irrelevant to the discussion. I would love to comment further on this:- I noted from a quick background search on Mr Cha that he’s written for JoonAng Ilbo, Chosun Ilbo and Japan Times. As far as I am aware (and I’m open to more informed readers than I here) these are all Japanese papers, two of which happen to be based in Korea).
re: “…the stated goals of keeping the Korean peninsula free of nuclear weapons,”
As you may well know this is complete and utter BS. I inspected and maintained atomic weapons in SK in the early ’60’s. I couldn’t be sure when they were first introduced, but my best guess was they were there by at least the late ’50’s. We would regularly get drunk and search the sky for NK paratroopers, because we knew we were target #1.
I would expect that both Russia and China are quite content to have the current NK regime in place as long as Japan and SK are occupied by the US, regardless of NK’s economic status.
Obama was consistently more confrontational and provocative than Trump. I would expect that Biden’s crew to be even more so. I don’t think it is a good idea to piss off the hermit nation, given the impressive progress they have made with weaponry. Everyone would benefit from a permanent peace treaty and the end of sanctions — except the offense contractors, profiting from 70 years of a state of war.