When news tidbits about North Korea’s “New Economy Management System” trickled out from early July 2012, curious and uneasy observers on the North had some expectations on possible economic reforms under the new leadership of Kim Jong-un. A year and a half later, we are hearing about an indefinite delay, if not total scrapping, of the supposedly innovative plan to improve people’s lives with loosened state control. 

The world knows that there are two North Koreas on the northern half of the Korean Peninsula. One is represented by the spectacles of military parades at Kim Il-sung Plaza and the huge assembly of power elite in colossal halls such as the one seen on the second anniversary of Kim Jong-il’s death last week. The Masikryong Ski Resort now nearing completion and a luxurious water park that opened in Pyongyang last summer may be added to this fantasy side of the D.P.R.K.

Yet, we also know the other North, the reality part of the People’s Republic which is best visualized by the hidden camera footage of “kkotjebi” homeless children picking up crumbs of unknown edibles from the muddy ground of a back alley market. KBS recently aired another piteous image: two shabbily uniformed North Korean border guards at the Amnok (Yalu) River on the Chinese border were quarrelling over loot collected from Chinese tourists who approached the beach in a boat.

Experts generally classify about 3 million people out of the total population of 23 million as the privileged class, including 1 million members of the Workers’ Party at central departments down to collective farms. In the Dec. 17 memorial rally at an unnamed auditorium in Pyongyang, thousands of officers from the upper echelons of the party, military and administration listened to eulogies read by Kim Yong-nam and Choe Ryong-hae, the older and younger top deputies to the ruler.

South Korean TV stations broadcast the scenes of the day’s mass events “live,” hooked up to the (North) Korean Central Television because of the keen interest here in the changes in Pyongyang’s power hierarchy following the execution of Jang Song-thaek, and particularly the fate of his wife Kim Kyong-hui, aunt of Kim Jong-un. Yet, I doubted too many North Koreans were as concerned about the lineup of their leaders as TV watchers in the South.

From the “arduous march” of the 1990s, the 20 million common people of the North have suffered from one failed economic policy after another until the latest New Economy Management System. There was the July 1, 2002, New Economic Management Reform Measure which was withdrawn after barely a couple years of experiments with a market economy, a return to the Public Distribution System in 2005 and the disastrous currency reform and salary hikes in 2009, which cost the life of the party economic planning chief who engineered it.

To look into the goings-on in the North, researchers depend chiefly on the party organ Rodong Sinmun, the Joson Sinbo for the Jochongnyon in Japan and Pyongyang radio and TV. The U.S. government-funded Radio Free Asia offers North Korean news from reliable sources, including recent refugees and residents of areas close to the Chinese border. The experts manage to provide some detailed accounts of the current situation of the North, despite struggling with the limited information.

The latest issue of the KDI North Korean Economic Review carried an article on the progress ― non-progress actually ― of the New Economy Management System, which was the first major economic measure taken after the installation of Kim Jong-un as the ruler. Author Park Hyeong-jung, senior researcher at the Korea Institute for National Unification, observes that non-cooperation and resistance from power groups put the reform into disarray and that factory enterprises were being told to do whatever they could to feed their employees.

Factories remain idle without power to run the machines and unable to secure raw materials. Collective farms were divided into family-based subunits which were supposed to enjoy freedom in cultivating their allotted land, except that they share their produce with the state by a ratio of 3 to 7 instead of the previous 1 to 9. However, People’s Army trucks from nearby regiments preemptively collected crops from the farms as soon as harvests were made. In the remote Yanggang Province, subunits have been reunited into collective farms under the pressure of local party authorities.

According to Park’s paper, a collective farm with an average of 100 households and about 200 farmhands requires the stationing of 40 to 50 officials, who include the secretary of the basic party unit and cadre members of the Socialist Youth Workers’ League, the Farm Workers’ Union and the Women’s League. Many of these overhead personnel will have to leave when collective farms are transformed into subunits, hence the desperate repercussions.

Uncertainties with the new management system prevented the Chinese from increasing their investment in North Korean enterprises. The indictment-verdict on Jang Song-thaek blamed him for smuggling mineral resources and selling out (to China) valuable land in the Rason special development zone for a 50-year lease. This must have irked Beijing deeply and discouraged them from future economic aid schemes and, consequently, any more fantasy projects in Pyongyang will hardly be possible.

By now it is obvious that the dynastic Pyongyang leadership passed through three generations is incapable of salvaging the country from an economic abyss. Creativity, spontaneity and other positive human qualities have been corrupted in the long reign of nepotism while systemic drawbacks inherent in the socialist economy wasted both the mechanisms and dynamics of self-improvement. When the Pyongyang TV announcer recited the catalogue of Jang’s crimes in hideous and vulgar words, he was reading to the world the diagnosis of the fatally ill North Korean regime itself.

Aware that they cannot save themselves, do we in the South have to just sit in front of the TV and watch Pyongyang rallies idolizing the young ruler with bloodstained hands from killing one of his closest relatives? We are still stunned by the upheaval in Pyongyang, but it is time to think earnestly of what to do to help the wretched people in the North who will eventually live together with us some day.

Seoul needs two sets of strategies to deal with the two North Koreas. These strategies will decide the future of the D.P.R.K.

By Kim Myong-sik 

Kim Myong-sik is a former editorial writer for The Korea Herald. ― Ed.