Following the death of North Korean leader Kim Jong-il, a debate has flared up on whether his successor would push for economic reform and opening to better feed the nation’s starving 24 million people.
On one side are skeptics who suggest that Kim Jong-un, the third son and heir of the deceased leader, won’t be able to change the course of the economy because his power base is still shaky.
Yet a larger number of experts predict that the twenty-something new leader would seek to open the economy wider to foreign investment than his father did.
Before his death, the senior Kim adopted a two-pronged economic policy. On the domestic front, he pursued a self-sufficient socialist planned economy. While he had to allow unofficial private markets due to the breakdown of the rationing system, he kept them under tight control to prevent North Korea from becoming a market economy.
Externally, however, he promoted economic opening to attract much-needed foreign investment. But he did not go far enough for fear of “unwholesome” capitalist elements penetrating and undermining North Korean society. He had a few free economic zones built in remote border areas but they did not bring in much foreign capital.
The new leader is expected to go beyond his father in terms of economic reform and opening for several reasons. First, he needs to consolidate and stabilize his leadership by winning broad popular support. To gain support from the public, he should lift them out of abject poverty.
Currently, ordinary North Koreans have to purchase food and other daily necessities from markets. But many people do not have the money to purchase the goods they need. This problem cannot be resolved without reforming the economy and attracting foreign direct investment.
This is why China has consistently pressed Kim Jong-il to follow its economic development model but to no avail. Now China is expected to step up pressure on his young successor to change course.
Since Kim Jong-un has to rely on China’s support to keep the basket case North Korean economy afloat, he would have no choice but to follow China’s advice.
One may add that the young leader’s overseas educational background should make it easier for him to embrace the Chinese development path.
For these and other reasons, North Korea in the post-Kim Jong-il era is likely to open its doors wider and seek investment from foreign countries, especially the United States. But one important question for us is whether it will try to mend fences with the South.
Since President Lee Myung-bak took office in 2008, the Seoul government has scaled back support for the North. In particular, following Pyongyang’s deadly provocations in March and November last year, Seoul decided to ban all inter-Korean cooperation projects, except the Gaeseong Industrial Complex, until the North offers an apology.
Pyongyang responded by reinforcing ties with China. And increased support from Beijing has enabled it to get along without assistance from the South. Now, Seoul’s support would definitely help the North ease its economic difficulties. But it is not indispensable.
This means the North is unlikely to go so far as making an apology for the provocations to get assistance. Under these circumstances, it would be unwise for the Seoul government to insist on an apology.
Hence, President Lee suggested on Thursday that the government would soften its demand for an apology. He justified his flexible stance by citing the death of Kim Jong-il, the man he blamed for masterminding the armed provocations.
Lee also declared that “Seoul harbors no hostility toward Pyongyang.” It was a well-advised and timely move. But the government needs to take follow-up actions to induce the North to open up to the South.
A good starting point may be resuming humanitarian aid to the North. If Seoul offers to send rice, Pyongyang would not reject it. One string needs be attached, though ― rice should be delivered to starving North Korean people.
The next action to take is resuming the Mount Geumgang tour program, which was halted in July 2008 following the shooting to death of a South Korean tourist by North Korean soldiers.
The Seoul government also needs to consider expanding the Gaeseong Industrial Complex and promoting investment in the North’s infrastructure. In the post-Kim Jong-il era, inter-Korean economic cooperation should be promoted from the perspective of integrating the economies of the two Koreas.
