Second Republic in the DPRK

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Second Republic in the DPRK
DO NOT CITE OR DISTRIBUTE WITHOUT PERMISSION The
views expressed in this presentation are personal
opinions of the author and do not reflect the
official positions of the APCSS or the U.S.
government

• Continuity and Change under Kim Jong Il

Dr. Alexandre Y. Mansourov
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Outline

• What has changed since
  Kim Il Sungs death in July 1994?
• What remains the same?
• Where is Kim Jong Il likely to
  take his country from here
  in future?

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Elements of Continuity Nature of Economic
System

• Command and control economy, central planning
  (partly defunct), state ownership
• Results misallocation of resources,
  proliferation of inefficiencies, wastefulness,
  mismanagement
• Isolation from world markets
• Militarization of economy

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Elements of Continuity Nature of Political
System

• It is still a totalitarian dictatorship based on
  one-party rule of WPK and the cult of personality
  of Kim Jong Il
• Kims clan still
• holds power

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Elements of Continuity Nature of
Ideology

• The ideology of Juche (self-reliance) still
  permeates all spheres of social, economic,
  political, and cultural life

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Kim Il Sungs Legacy Intact

• In sum, there have been NO principled changes in
  the nature of economic and political systems,
  substance of ideology, or core of the ruling clan
  in North Korea since 1994

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Elements of ChangeEmergence of Three Neos

• The 2nd Republic can be characterized by
  three Neos

Cultural neo-traditionalism
Political neo-authoritarianism
Pre-market-oriented economic neo-corporatism
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Clan Rules

• Succession politics is OVER. KJl is in firm
  command.
• Any collectively organized opposition failed to
  emerge in the past decade.
• Against the background of wide-spread famine and
  economic depression, yes, there is some grumbling
  and disquiet but, everyone suffers. Hence,
  personal survival is the name of the game for
  all.
• The message is out if one is loyal to Kim Jong
  Il, one will survive this time of hardship and
  will be taken care of in the long run.
• Ruling elite is rejuvenated. The KJI-groomed
  three revolutions generation is firmly in power.

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Assault on the Party-State
KJI is elected the Secretary -General of the
entire WPK, not of its Central Committee, as it
used to be.
Frequent purges decapitated the WPK CC,
especially in such areas as agricultural policy,
energy policy, foreign trade, ideology,
counter-intelligence
WPK's influence in decline
Growing separation of Party and State
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Military Rule Songun
politics

• National Defense Commission is the supreme state
  organ
• Vertical hierarchy of the NDC-authorized
  representative offices subordinated directly to
  KJI in all economic, social, and public entities
  at all levels (like groups of three revolutions
  in the 1970s)
• Is the military in control of the state sector of
  the national economy and all public institutions,
  like in wartime?
• Paradox how can the KPAs influence seemingly
  grow under the army-first politics against the
  backdrop of the hollowing out of the NKn
  military capabilities?
• Potyemkin village?
• Does the military represent its own corporate
  interests or does it represent the selfish
  interests of Kims clan?

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Military Rule
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Constitutional Reform of Sept. 1998

• First Session of the 10th SPA passed a new Kim
  Jong Il era Constitution
• Abolished the institution of the President and
  Vice-President
• Diminished the powers and status of the Central
  Peoples Committee
• Made the NDC the supreme state body defining
  national security strategy, economic and
  political development strategies Kim Jong Il as
  a de-facto supreme leader
• Made the President of the Presidium of the SPA as
  a formal head of state (plus three
  vice-presidents and four honorary VPs)
• Abolished the Administrative Council and
  instituted the Cabinet of Ministers composed
  mainly of economic ministries
• All power ministries were subordinated directly
  to NDC
• Private ownership is allowed. Party rule is
  curtailed.

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Government Administration Reform of Sept. 1998

• Objective to cut down government expenditures
  and increase government efficiency through
  greater centralization of functionally related
  government bureaucracies at the center and
  through delegation of responsibilities to local
  actors
• Solution creation of super-ministries and
  super-commissions
• Result decrease in central control over local
  governments and economic actors

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Political Neo-authoritarianismSummary
Unchallenged rule by Kim Jong Il
Less party
More military
Loosening of central control at the local level
Centralization of government bureaucracy at the
center
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Economic Collapse

• In Pyongyang, there is a policy-making consensus
  that
• the status-quo is unacceptable
• NK is facing a profound macro-economic crisis
• a new structural adjustment strategy must be
  adopted to improve the economic situation
• Strategic goal to build a powerful and
  prosperous nation (kangsong taeguk)

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Models of Structural Adjustment

• Proliferation and expansion of FETZs (6), i.e.,
  growth poles or market anclaves, trickle
  down approach(Sinuiju, Kaesong, Rasong, Nampo,
  Wonsan, etc.)

• Big leap forward (2nd Chollima march, shock
  therapy à la NK)
• Quasi-liberalization of prices, wages, and FOREX
  on 7/1/02 (7/1 measures to improve economic
  mgmt)
• The logic is simple NKs economy is at the
  bottom already so its radical restructuring
  should not have much negative impact on either
  public welfare or economic output anyway.

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Black markets
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Economic Actors

• Apparatchik (bureaucratic) capitalism
• Ministries-led restructuring

• Clan/cronies capitalism
• Conglomerates-led restructuring

Should property rights over the public sector be
retained by the State or transferred to
enterprises through securitization of assets?
Is privatization of SOEs on the horizon?
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Economic Neo-CorporatismBattle of Ministries
versus Combines
Battle of Laws

• Laws on central planning, agriculture, mineral
  resources, etc.

• Laws on Stock, Joint Stock Company, Kim Jong Ils
  decrees

Emergence of multi-layered and partly
decentralized economy
Corporatization of assets in oil refining,
mining, manufacturing, textiles, food
processing Delegation of administrative and
managerial responsibilities from party officials
to industrial/commercial managers
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Economic Neo-Corporatism
Sources of Financing

• Debt advocated by government economic
  bureaucracy (external borrowings from IFIs,
  Japanese settlement, ROKs indirect BOP support)
• Rus bad lesson much aid will be stolen via
  corruption
• Equity (development of local capital
  markets) advocated by industry
• Chinas positive lesson good for FDI,
  KJIs visit to the Shanghai Stock
  Exchange
• Confiscatory monetary (print more money,
  inflation) and fiscal (raise hidden taxes)
  policies advocated by MinFin

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Economic Neo-CorporatismSummary

• Move away from absolute State control of the
  economy (statism), but not in the direction of
  greater economic liberalism rather towards
  greater corporate control in the emerging
  pre-market conditions
• NK is no longer a centrally planned economy.
  But, concurrent new institution-building is
  absent.

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Cultural Neo-TraditionalismPolitics of Filial
Piety and Red Flag Ideology

• The politics of filial piety practiced by KJI
  during 3-yr mourning period facilitated the
  revival of neo-Confucian values in the NKn
  society

Yuhun chongch'i
Fatherly Leader
Respect for the Elderly
Motherly Party
Politics of Virtue
Filial Loyalty
Family-State
Benevolent politics
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Cultural Neo-Traditionalism Rise of
Nationalism

• Communist aspects of the juche ideology are
  toned down, whereas nationalist elements are
  increasingly emphasized
• NK projects itself as the sole independent
  guardian of authentic traditional Korean
  values and depicts SK as a Westernized and
  Americanized modern day puppet of global
  imperialism.

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Cultural Neo-TraditionalismRevival of Religions

• State-sponsored revival of religions (both
  Christianity and Buddhism), unthinkable ten years
  ago

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Cultural Neo-Traditionalism
Symbolism and Cult of Personality

• Renewed emphasis on symbolism (rather than
  rationalism) in ideological propaganda
• Introduction of the Juche-Era calendar (1st year
  1912) and the Sun Day April 15
• Propaganda of the myth of Tangun as the founder
  of the Korean nation
• Eternalization of Kim Il Sung as Eternal
  President the cult of his personality is given
  mystical attributes

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Foreign Policy Legacy of
the First Republic

• Kim Sr.s legacy dominates Kim Jrs f/p
  priorities.
• With all Kim Il Sungs great accomplishments,
  he left three historical tasks unfulfilled
• To settle scores, conclude peace, and normalize
  official relations with the United States and
  Japan
• To reunify the Korean peninsula on the basis of
  the Juche Idea.
• To repair broken ties with Russia and China
• Kim Jong Ils mission is to complete these
  Herculean tasks. CAN HE DELIVER?

Is Kim Jong Il a Super-Kim Il Sung?
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China is the Key

• Policy divergencies
• PRC recognizes NKs military inferiority vs SK
• PRC is against WMD in K.
• PRC is against NKs use of force to unify
• NK resents PRCs two Korea policy
• NK plays Taiwan card

• Common values and interests
• traditional ties lips teeth)
• communist ideology
• M-L political system
• fight against US hegemony
• defend socialism by modernizing economy and
  preserving political system
• manage refugee flows

Developmental model
Political legitimacy
Military protection
As long as PRC is behind KJI, his survival is
assured, and China is likely to give enough aid
to NK to keep it afloat.
NKs economic dependency on PRC food,
fertilizer, fuel, debt
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Welcome to KEDOLAND
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KEDO Miracle

• a State within a State - status of
  exterritoriality, own banking and legal systems,
  postal and telecom services, intl ID docs and
  immunities
• a Western enclave inside NK (like Japanese
  settlements in open ports, following the opening
  of Korea as a result of the Kanghwa Treaty of
  1876)
• how far can KEDO push the envelope?
• KEDOs impact new notions of what is acceptable
  and desirable in policy-making in NK a new
  constituency of NKn experts in intl law,
  contract law, IOs, nuclear energy field support
  for local economy
• Is KEDO dead for now?
• Common belief SK will absorb NK before the LWR
  project is complete. But, what if the DPRK
  government remains in power indefinitely? What
  will happen to KEDO-land then?
• Permanent SKn anclave inside NK? KEDO-run FETZ?
  Open industrial park? LWR shutdown?
• How much enough (evidence of past activity) is
  enough?

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Russian Card

• Goal is similar strong and powerful Korea and
  Russia, although means are different. Russia
  serves as a window into the West for NK learn
  from Russian experience how to reform and survive
• Pragmatism, instead of ideology, in the economic
  area
• Personal chemistry between Kim Jong Il and Putin,
  intensified elite interactions
• Strategic interaction
• Russia wont join any anti-NK coalition, nor will
  meddle into NKn domestic affairs
• Moscows assurance of Kim Jong Ils personal
  safety
• Russian commitment to provide NK with arms up to
  the level of defensive sufficiency
• shared understanding regarding U.S. hegemony in
  Korea and worldwide

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On-again Off-again
DPRK-ROK Relations

• Fear of entrapment versus fear of abandonment
• Complex of inferiority (mil., ec.) vs sense of
  superiority (cultl, historical)
• Symbolic summit diplomacy in exchange for the
  balance of payments support and humanitarian
  assistance
• Military deterrence and economic/cultural
  exchanges
• Foment nationalistic, isolationist,
  traditionalist sentiment in ROK
• Break up the ROK-US alliance
• Propaganda of unification, but no desire to
  unify the goal is to stem SK-led absorption at
  all costs and bid time

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DPRK and the
Axis of Evil

• Engagement strategy is dead
• Perry process is dead
• Kelly process is on
• We are back to rollback

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Fighting Evil with Evil DPRK MOFA Reply on
January 31, 2002

• The prevailing situation where the U.S. openly
  disclosed its intention to stifle the DPRK by
  force of arms makes us keenly realize once again
  what a just stand the DPRK took when it has
  followed the U.S. with vigilance and what a
  far-sighted policy it has pursued to equip itself
  with powerful offensive and defensive means,
  tightening its belt.
• Bushs remarks clearly show what real aims the
  U.S. sought when it proposed to resume the talks
  with the DPRK recently and why the present U.S.
  administration ruled out even the possibility of
  seeking a negotiated settlement of the nuclear
  and missile issues created in the period of the
  preceding administration.
• The option to strike impudently advocated by
  the U.S. is not its monopoly.

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Voice of Evil

• Korean Central Broadcasting (Feb. 4) Bushs
  remarks revealed Washingtons intention to
  destroy the DPRK through military means by
  falsely connecting it with terrorism. The DPRK
  joined a number of anti-terror conventions last
  year and there is absolutely no evidence of its
  support for terrorism or any other evil. In
  fact, the title (evil better suits the U.S.
  itself, which is a source of true evil.
• Rodong Sinmun (Feb. 5) There has been no
  precedent in the modern history of DPRK-U.S.
  relations as that which Bush openly threatened
  the DPRK with aggression. What merits a more
  serious attention is that the U.S. attempts to
  designate the DPRK as a target of its military
  operation. However, it will be a fatal blunder
  for the U.S. to ignite a new war on the Korean
  Peninsula. The DPRK is neither Afghanistan nor
  Yugoslavia nor Iraq.
• Minju Joson (Feb. 7) Bushs remarks in U.S.
  Congress clearly prove how crazy he has become in
  pursuing his hostile policy to stifle the DPRK.
  The bellicose elements consider that if tensions
  are defused on the Korean Peninsula, their policy
  of military presence in South Korea as well as
  their Asia-Pacific strategy will go bust. That is
  why they have left no stone unturned to wreck
  peace on the peninsula whenever a favorable
  atmosphere for the Korean people is created.

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Japan What?

• Kims fundamental belief Japans policy t/NK is
  contingent on U.S. predisposition and progress in
  N-S dialogue
• Hence, Tokyo will not make a deal unless
  Washington pushes for it (like with SK in 1965).
  Alternatively, Tokyo may rush to settle with
  Pyongyang on its own once it concludes that a
  U.S.-NK normalization or a breakthrough in the
  inter-Korean relations may be imminent (like
  Japan-PRC settlement in 1972).
• In the meantime, Kims strategy is not to give
  too many concessions under duress, continue to
  harass the Japanese, and hold out for more
  compensation at better times when his own hand
  gets stronger and the Japanese become more
  flexible and eager to deal.
• In sum, Kim is in no rush to normalize relations
  with Japan, despite his fathers will, possible
  financial windfall, and diplomatic advantages.

Koizumi-Kim Summit on 09/17/02
failed to lead to normalization of the
DPRK-Japan relations
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European Offensive

• Tradition of cooperation with Europe
• Dismantlement of the Cold War legacy
• Improved international reputation
• Transfer of resources and technology in exchange
  for transparency and respect for EU humanitarian
  concerns
• Marginal leverage vs U.S.

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Bait and Frustrate NGOs

• Give me, give me, give me
• Dark chamber of planks with glass ceiling
• Limits on access and transparency
• What donor fatigue?
• Be sincere and work harder!
• What will future hold for NGOs in NK? Co-opt
  or getem outta here!

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Foreign Policy Report Card

• China bleeding lips and broken teeth
• Russia mission accomplished
• EU mission accomplished
• KEDO going nowhere
• United States needs a power defroster
• Japan moribund, needs an electric shock and a
  new compass
• ROK on track
• NGOs under repair

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Kim Jong Ils Era UnfoldingPredictions

• A gradually reforming authoritarian DPRK will
  have no interest in reunification.
• A prosperous, democratic ROK will have declining
  interest in reunification.
• Relations between the two, and between the DPRK
  and others, will improve.
• Reconciliation, but no unification as long as Kim
  Jong-Il is at the realm in NK.
• Wild Card will Kim Jong-Ils death cause a
  military coup or popular uprising and an
  avalanche-style unification?