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Reviewing North Korea’s Domestic Situation from the Aspect of System Maintenance

January 5, 2010

The following article by Kim Yun Tae, secretary general of NKnet, appeared on pages 18-25 of the November-December 2009 issue of NK Vision.

In 2009, North Korea had gone through a year of violence with lots of weighty issues. It carried out the launch of a Long Distance Rocket, 2nd Nuclear Test, and ICBM test, as if to attract the attention of the International society, while internally carrying out the establishment of the succession system, 150 Days and 100 Days battle, constitutional reform, and currency reform. While externally creating tensions and pursuing negotiation tactics, North Korea internally oppressed citizens and reinforced its system. Especially North Korea has constantly made a good use of outside issues according to its inner situation.

Thus, thoroughly reviewing these major strategies held by North Korea, we’d be able to have deeper understanding of the situation in North Korea as well as its current need, and will also be able to forecast its direction in year 2010. Since the basis of Year 2009 strategies is likely to be maintained in 2010 as well except in case of any dramatic changes in North Korea, analyzing the current situation will be helpful for our foreseeing the year 2010.

In 2009, the biggest interest of the North Korea government was the rearrangement of the system for establishing the succession system.

As Kim Jong Il’s health problem became a political issue last year, in August, the political malaise in North Korea was strengthened. The discussion over succession around Kim Jong Eun started during this process. Kim Jong Eun has concentrated on accumulating his accomplishment as a successor, beginning with extensively popularizing the admiring song toward himself, and also taking the lead of 5.1 anniversary celebration and ‘Chook Po Ya Hwe’, the large scale fire work. Furthermore, Kim Jong Eun is accelerating his preparation for the three generation heredity by publicizing himself on a large scale through all sorts of lectures, inner refinements, and propaganda.

Thus, it is not too much to say that year 2009 was the year of the successor Kim Jong Eun in North Korea. All the political schedules of 2009 and main policies of the nation was well knit for settling the establishment of succession system. Actually the 150 day battle, the 100 day battle, and currency reform have lots to do with the establishment of Kim Jong Eun’s succession.

Moreover, it can be analyzed that the objective of great reinforcement of Defense Commission Chairman’s status and power, through amending the Constitution at the Supreme People’s Committee held this year in April is to accelerate the discussion over future Succession around Kim father and son. Likewise, North Korea is speeding up to rearrange its establishment of the succession system. This seems to be done under the calculation that time is running out.

We must especially give a closer look at the heightened tension and conflictual elements created among the powers of father Kim Jong Il-successor Kim Jong Eun -anti Kim Jong Eun around the succession issue. These kinds of conflictual elements have the potential to intensify the inner sentiment of anxiety eventually driving North Korea over the edge.
These days, the succession system with Kim Jong Eun as a center is seemingly ‘peacefully stabilized’ due to Kim Jong Il’s health recovery, but regarding the attributes of power, we cannot tell for sure what is going to happen in the future.

Specially if Kim Jong Il took a serious turn again, the power struggle is likely to get into an uncontrollable confusion. Although Jang Sung Taek, the Director of the Ministry of Administration of the Chosun, poses as a supporter for Kim Jong Eun at the moment, there is no reason for him to stick to Kim Jong Eun if the situation changes. Moreover, if North Korean people’s distrust and resistance toward Kim Jong Eun’s leadership and statecraft grow up, the outline of the succession might face fully different aspects. So, many variables around the succession issue remain as unsolved problems for Kim Jong Il and Kim Jong Eun. Likewise, the succession issue, on the one hand, is an only alternative for Kim Jong Il whose status is at risk due to ill health, but it is also like a time bomb that internally causes a power struggle on the other hand.

North Korea is likely willing to return to the planned economy through market control

During the year 2009, North Korea had struggled to restore its massed up planned economy through market control.
First, it focused on preventing the extension of marketizing with the black market as a center. North Korea has consistently carried out the control over the market by regulating the standards for trading, such as age, sex, time and items. It even took the measure of closing the largest wholesale market in North Korea, ‘Pyung Seong Market’. However, due to the limitation in this kind of market control, North Koreans’ loyalty and solidarity toward the nation is continuously falling.

The unseen power of the market is pulling North Korean people and North Korea administration apart. There is no way the state economy can stay on its feet, under likewise situation. The rate of factory’s operation is under 20-30 percent, and the absentee rate of local residents has been meaningless since long ago, under the condition of raw materials being exhausted. Even the workers guaranteed of their employments at the corporations or factories are mostly focusing on 8.3 activity. They are not interested in attaining the production of national goal at all.

In a situation like this, the North quickly promoted the 150 day battle and 100 day battle to overcome the financial difficulties. A large-scale Mobilization business including construction of power plant, road maintenance and improvement, and homebuilding takes place all over the North Korea. During this period, North Korea not only controlled the market and movements but also cracked down on people going to work and called out for labor. North Korea is trying to overcome the current crisis by raking in as much drained inner resources as possible through the nationwide mobilization business. It wants to suppress the mind and body of the people focused on the market, in order to return to the planned economy system. Although North Korea keeps insisting that “The objective of 150 day battle and 100 day battle is to accelerate the construction of the socialist economy”, in fact, the objective is to keep the labor power in the boundary of national economy. Moreover, this 150 day battle and 100 day battle held by the North, is a multipurpose card with a political objective to heighten the achievement of the successor Kim Jong Eun.

Furthermore, the North recently carried out the policy that enforces people to exchange old currency into new currency at the rate of 1:100. This currency exchanging policy, on the one hand, is objected to solve the current inflation problems and regulate the recently formed power of marketization, but, on the other hand, it indirectly reveals the North’ willingness to return to the past planned economy system of the socialist.

Of course, the North administration has never officially admitted any form of market economy and has also kept on regulating and suppressing the market, but it is predicted that, without proper food rationing and salary payment, the North will inevitably accept the market system at the passable level. Thus, throughout this currency reform, the North administration apparently revealed the message saying, “Take advantage of the market only in purpose for the survival,”, “Accumulating wealth through the market can never be allowed.” Therefore, this currency exchanging policy can be regarded in many respects as a war between the North administration and the principles of the market beyond the regulation. Plus, in recent years, throughout the inner lectures on the topic, “Socialist economy principles are basic guarantee for the construction of Socialism”, the North strongly criticized those factories that had accepted the capitalistic working principles during ‘150 day battle’.

This criticism is based on the thought that the administration will never accept those who pursued the capitalistic working principles by forcing arbitrary obtainment of raw materials and competence in price, under the guise of activating the production during the ‘150 day battle’. Likewise, the main objective of 150 day battle, 100 day battle, and currency exchanging policy is to regulate the market, but with a closer look, it can also be interpreted as a policy to maintain and strengthen the hereditary system and planned economy. The North administration has made it clear that it will never allow any kind of challenge, in order to achieve the goal mentioned above.

The year of trying to grab two hares at once: “system maintenance” and “economy recovery”

Due to this inner social malaise raised by Kim Jong Il’s health problem last year in August, the North has concentrated more on maintaining the system and regulating the inside. The North administration is suffering from growth of both political malaise and economic difficulties each caused by the succession issue and the collapse of planned economy, and furthermore, it is obsessed with its responsibility and impatience that it must at least put up a good show until year 2012. It is chasing two hares at once, since it can give up neither the 3rd generation succession nor the Socialist planned economy.

However, this goal seems to be too out of this world. Without open door policy for superior skills from foreign countries and economy back through the industry of foreign capital, it is impossible to achieve the goal by 2012 only depending on the inner resources and mobilization business. The problem is that, although the North is partly aware of this likewise situation, it is stuck in a dilemma which prevents it from giving up the Socialist Planned Economy that guarantees its system maintenance. This is because, acceptance of the Market Economy will mean self-denial for the North.

Besides, since the North administration is well aware that the progress of marketization will accelerate the collapse of the planned economy, it cannot allow any capitalistic element beyond its regulation. Still this does not mean it can carry out a total ban against the marketization. Thus, in the years ahead, the North is likely to face a great deal of trouble swinging between the planned economy and the market economy.

Right now, the North administration isn’t carrying out any positive attempt or decision for a change. It is rather obsessed with maintaining current condition and returning to the past. Sticking to its unique Socialism or restoring the planned economy to its original state is all part of this. It is dreaming of the hereditary dictatorship and return to its planned economy throughout stabilizing the succession and regulating the principles of market. Reform at the fundamental level will never be a choice. Therefore, the administration is tightening the control over its people in order to overcome the anxiety.

Even worse, its way of control is not leading out the voluntary loyalty from people like the old days. It’s been a while since the enlightening style of loose control such as refinement of idea, has lost its effect. Thus, the strong regulation and punishment is the only way of enabling the North administration to carry out its policies and maintain its power. This is why we have constantly pointed out that when facing the North Korea issues, the maintenance policy of the system and the Reform policy cannot coexist.

The public sentiment of alienation toward the North’s administration is accelerating.

Then, does the North’s wish to maintain the current system through 3rd generation succession and its lingering desire for the collapsed planned economy match with the thoughts of North people? What kind of reaction and thoughts will the North people possess toward the succession issue, 150 day battle, and 100 day battle? Lots of negative reactions are shown among the North people toward the succession structure with Kim Jong Eun as a center. According to the results of our continuous monitoring, most of North People’s reaction to successor, Kim Jong Eun, is like, “He is too young”, “He’s too young to reign a country”, “3rd generation succession will drawback the reform and open policy”, and “powerful countries will look down on us”.

It can be assumed that although no physical rebellion will be carried out against the likewise succession map for the moment, it won’t be accepted easily as well. Even if the succession issue gets resolved smoothly, it seems impossible for them to maintain power as absolute as they had during the Kim Il Sung – Kim Jong Il era. The problem is, if the public sentiment is formed like this, not only the middle bureau class which supports the Kim father and son power will rapidly collapse, but even the most privileged class, the people close to Kim Jong Il, will be in disturbance as well.
Chances of inner anxiety and accidental trouble caused by unavoidable split and confusion, cannot be completely excluded. Another problem is that, the control system is now even laying itself open to attack, eventually not working as normally as it should be in certain situations.

Moreover, North people’ rebellion against the 150 day battle and the 100 day battle is growing larger and larger, eventually tearing down the faith and solidarity toward the administration. People are strongly resisting against the policies of the administration by facing those mobilization movements as a mere formality or actively avoiding it. It is obvious that this kind of mobilization event without any benefit for those in such hardscrabble life, will not work at all.
Furthermore, people’s dissatisfaction and resentment cannot but go higher, owing to the regulation and crackdowns with the object of people mobilization. The market regulation policy held by the federal administration is unlikely to progress properly because of the fact that even the bureau system who are in charge of these crackdowns are co-existing with the market power.

In addition, due to recently held currency exchanging policy, people’s dissatisfaction is now at its height. Of course, those lower class people, not damaged by the currency exchanging policy, are right now reacting in a way, “I have nothing to do with this.”, “This is not once or twice….”, in longer-term, they will eventually realize that this policy will end in a harm, leading up to regulations over their markets. It won’t be easy for the North administration to accept the marketization beyond its control. This is because the administration is well aware of the fact that progress of marketization will accelerate the collapse of the planned economy. Therefore, the North administration is likely to face a great deal of trouble swinging between the planned economy and the market economy on its way carrying out the economic policies.

The problem is that changes in North people’s consciousness is progressing at an alarming rate under this situation. The anti-governmental attitude among the people is expanding, because most of the policies suggested by the North administration are rather functioning as hindrances for people to figure out their independent survival measures.
Moreover, as people recognize the absolute power of the market and become more market-friendly, capitalism-friendly, their dissatisfaction and resistance against their anti-governmental administration is growing larger and larger. Thus, the North people are not only grumbling around the planned economy held by their administration but also actively finding diverse ways to make their living.

Even without the salary and distribution, they are carrying out their own silent resistance in a way they can avoid the crackdowns and punishments. Soundless voices from the North people like, “None of my business, I’m already messed up with my own life.” “Anything is possible with money “, “I don’t even expect any distribution from the administration”, “Isn’t the economy of Chosun capitalistic?”, “We know that we cannot survive without reform and opening policy like China” is accelerating the collapse of Kim Jong Il father-son system and Socialistic planned system.

Succession issues and poor economic policies amplify key domestic concerns

The North administration is not in a position to drastically accept the market economic elements which will have great influences on the stabilization of succession and maintenance of the system. Thus, these days, North Korea is trying to somehow revive the Socialistic planned economy. The policies which are contrast to the requests of the North people are held due to its awareness of the crisis that “there is no place to move back”.

Moreover, such policies like ‘control over market’ and ‘crackdown over people’ will be constantly strengthened for a while, unless the North give up the succession issues recently being waived by Kim Jong Il’s health problem and also the maintenance of the planned economy without any dramatic reform. Thus, the struggle by North people for their survival will grow violent in this process. Various incidents caused by the conflicts with the North’s policies are expected to happen everywhere in North Korea.

Even the possibility of anti-governmental resistance like accidental trouble cannot be wiped out. Especially, if Kim Jong Il’s health takes a serious turn again, an inner struggle for power can arise and bring out the worst situation of sudden change. This is why the future of North Korea isn’t expected to be always ‘smooth sailing’. Let’s keep watch over whether or not the North will keep carrying out overreaching policies in 2010 as well.

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