An Atmosphere of
Departure and Two Speeds, Korean Style: Where is North Korea Heading?
By Ruediger Frank 02 October 2012
The Country Is
Changing
Not that it has ever
been static, but within the few months between my travels to North Korea in
spring and autumn of this year, the country has changed to the degree that even
a foreign visitor cannot avoid noticing. While in April, everyone seemed to be
somewhat tense and edgy, unsure about what would happen under the new leader
and torn between hope and concern, by September, the atmosphere was almost
upbeat and optimistic. It is even now clear which is the new standard badge (the big red
flag with the two leaders), and everyone is waiting patiently to receive his
own. Admittedly, the season is nicer in the fall than in the spring: the
temperature is warmer, the landscape greener, and food from the new harvest is
on the table, while hard manual labor in the fields and the cold of winter are
still a few weeks away. But there is more.
This may just be the
beginning. The people in the DPRK have noted a new wind blowing from the top
and seem to be welcoming it. In some cases, we have even seen an instant
reaction, like the small but growing number of short haircuts among women that
I noticed on this trip, particularly in Pyongyang. With remarkable speed, the
new leader’s wife Comrade Ri Sol Ju has become a fashion icon in a country that
previously has been rather conservative regarding hairstyle and dress code. Kim
Jong Un has been in power for nine months now. If we can believe the image
produced by the DPRK state media, he started
showing his own personality earlier than expected and went beyond a mere preservation of the status
quo. While continuity is being emphasized, his public scolding of
officials at Mangyŏngdae, the somewhat bizarre Disney
performance in July, the quick ending to the career for rising star Vice
Marshal Ri Yong Ho, the growing and shared media spotlight on top-level
officials such as Premier Choe Yong Rim and Vice Chairman of the Party’s Central Military
Commission Choe Ryong Hae, and not least, the appearance of a first lady both
in public and in the media are markedly new signals.
In many regards, Kim
Jong Un is just harvesting what had been sown years ago, be it long-term
macroeconomic trends like marketization, monetization and intensified foreign
trade with China, or specific construction and renovation projects. But as
noted by leading Russian expert Georgy Toloraya over
beers in Pyongyang, in traditional East Asian fashion, North Koreans regard the
new leader’s fortune (regardless of its causes) as a sign of approval from
Heaven. What a contrast to how his father’s rule started—with the Arduous
March.
One noticeable
difference on this trip was that the number of sales booths selling bread,
soda, pingsu (water ice) and cigarettes has multiplied; they
can now be found at almost every intersection in the capital, as well as in
provincial cities and the countryside. Particularly in the big cities, there is
seemingly an atmosphere of departure. Not only the simple stalls, but also the
more sophisticated sangjŏm(literally: “shop”; usually housing a store
on the ground floor, and a restaurant and a sauna on the top floors) seem to
have mushroomed in the past months. Again, Pyongyang is taking the lead, but Namp’o,
Sariwŏn and Kaesŏng also seem to be catching up. Prices are
horrendous; three kilograms of apples cost as much as one (official) month’s wages. But the fact that even things like bananas are being
sold is remarkable. The problem does not seem to be access anymore, as was the case in classical
socialist economies. All that counts now is having the right amount of the
right currency. This is hard enough for many, to be sure. But as much as this
is a new type of challenge for many North Koreans, it is not uncommon in
Western market economies. The bottom line: the DPRK is catching up.
I also noted that the
number of taxis I saw in Pyongyang was the most I have ever seen, and the
diversity in clothing for both men and women has increased markedly.
Inline-skating is the latest trend among kids and can be observed on squares on
both sides of Taedong River, including Kim Il Sung Square. In the Pyongyang
Gold Lane, a bowling alley that the Eternal President himself once visited,
youngsters in t-shirts and sweaters enjoy bowling and play billiards and table
tennis. Some of them even spend their hard currency at slot machines. The
cafeteria sells opulent meals, of which, much (including strips of beef) is
left behind by North Korean customers.
Museums and other
places that are visited by foreigners now also inevitably have shops; visitors
with hard currency can even buy souvenirs and snacks on the top floor of the
Grand People’s Study House. For someone like me who twenty years ago had to walk
a few miles from his dormitory to the Rakwŏn Store in
East Pyongyang or the Koryŏ Hotel to be able to spend some
Western money, this is a remarkable development. If you have the cash, you can
even buy a small brush painting by Chŏng Chang Mo,
one of the country’s leading
artists, for 1,400 EUR. There are not one but at least two cash cards (the
red-blue narae issued by the Foreign Trade Bank and the golden koryŏ issued by Koryŏ Bank) that
can be used in taxis and in dedicated shops, not to mention the number of mobile phones has long passed the
one million mark.
The number of traffic
lights replacing the “Flowers of Pyongyang” (a.k.a. traffic ladies) seems to
have increased further, and smaller traffic jams are frequent. The streets are
now dominated by a great variety of passenger cars manufactured both at home
(Pyonghwa Motors) and abroad—still a far cry from Seoul’s crowded highways, but
already much more diverse regarding represented brands. The number of yellow
license plates, indicating “private” ownership, is increasing, although white
state owned license plates still dominate, along with black military ones. The
old trolley buses, some of which have run millions(!) of kilometers (you can
easily tell: a red star is painted on their side for each 50,000 kilometers
they have survived) are being replaced by new ones.
The newly built and
meanwhile opened Mansudae apartments are not only a good example of modern city
architecture, they also tell the story of a new management philosophy: Kim Jong
Un allegedly informed the builders that he would prefer quality over speed, and
that there was thus no need to finish everything rashly in time for the April
15th centenary of his grandfather. This does not seem to have been the case for
all projects, however; the new statues of the two previous leaders on Mansudae
Hill that were unveiled in April have been covered in white cloth since
September 11.
On the ideological
side, we note an ongoing renovation of slogans and monuments. Unlike in April,
when Kim Jong Un was referred to as the “dear respected comrade” on most
banners and steles, he is now frequently called “great sun of songun” and
“Great Leader.” While the former is at least in part different from “great sun
of the 21st century,” a title used for his father Kim Jong Il, the latter term
(widaehan ryŏngdoja) is identical. Who would have thought that
within less than a year, Kim Jong Un would assume the same status as his
father?
Another interesting
detail concerns the very appearance of the slogans. Traditionally, they have
been painted in white letters on a red background. Some were carved in stone
above the entrance to public buildings, and often the carvings were painted in
red or more recently, in a less conspicuous gold-bronze. In September, however,
I noticed that in a few cases, the color was skipped altogether. Unless there
was simply a shortage of paint, this more subdued and modest (for North Korean
standards) new appearance invites further speculation about the new leadership
style.
Last but not least:
the Arirang mass performance. While it did take place again this year, the
rumor is that from 2013, it will be completely updated or even changed. I
attended two previous performances (2005 and 2010) and noted this time that
there was an absence of any aggressive messaging. The only weapons shown were
the two handguns that Kim Il Sung had received from his father along with the
slogan “aim high.” The chapters on Chinese-Korean friendship and on unification
were still included, but the main focus was on nationalism and the country’s
economic and social achievements.
Pyongyang First?
Like many other
visitors have reported recently, I was impressed to see the widening gap
between Pyongyang and the countryside. Paying particular attention to the
nation’s capital is neither a new policy nor is it limited to the DPRK. But my
impression was that stagnation in the countryside regarding road
conditions, houses, service facilities, clothes and overall standard of living stood
opposed to almost breathtaking development in Pyongyang. How will
North Koreans react? We should not necessarily assume that the widening gap
will be regarded negatively. Deng Xiaoping himself had coined the
idea of “two speeds,” arguing
that it was alright for one part of China to achieve prosperity first as long
as the other would have a fair chance to follow.
Perhaps we could even
argue that such huge differences in affluence within the country smartly divert
attention away from the outside world. Rather than dreaming about life in
Shanghai or Seoul, young and ambitious people in North Korea can dream about
the lights of Pyongyang. Besides, this makes living in the capital an even
bigger privilege and relegation to the provinces a more severe punishment.
Developmental
economists will be familiar with the debate of balanced versus unbalanced
growth. It seems that at least for some time, the DPRK leadership has decided
in favor of developing one city as best as they can, rather than spreading
their scarce resources across the country with a watering can and achieving no
visible results. With some optimism, as a next step we could expect a
spill-over effect to the provincial cities and the area around the capital. My
evidence so far is rather arbitrary, so due caution is advised. Nevertheless, I
dare say that I noticed slight improvements in the larger cities along my
travel route in September; most notably, the above mentioned sales booths and a
number of newly opened siktang(restaurants) and sangjŏm. Not only do they indicate more diversity on the supply
side, they also imply that people have more money to spend. In any case, the
appearance, the attitude and the body language of
Pyongyangites is still notably different from the rest of the country.
Reforms In
Agriculture: Catching Up?
Is the countryside
next in line for a major improvement? Or was the beautification of Pyongyang a
deliberate step to make up for an expected welfare boom among farmers?
If the rumors spread
by Reuters on
September 24 are true and reforms in agriculture will once again take place
after a decade, then we need to ask what the leadership wants to do about
inflation this time. External
conditions for a reform effort are not necessarily better than in July 2002:
George W. Bush is long gone, but Barack Obama has not been as forthcoming as
many had hoped; the government in Seoul is much less supportive than the Kim
Dae Jung administration; and the abduction issue still stands in the way of
normalization with Japan. On the other hand, China’s potential to help has
grown; there is a new young leader in Pyongyang; and the past decade of ups and
downs have taught painful but valuable lessons to the DPRK’s economic
policymakers.
No matter what the
balance is: a few structural
restraints remain unchanged. North Korea is not an agricultural
society. A liberalization of prices and production decisions will benefit
the farmers, which by way of incentives might eventually lead to increases in
productivity and output. But in the DPRK, farmers are a minority. Given the
country’s chronic shortage of staple food, after liberalization, prices will
soon skyrocket and fill the pockets of the few producers (which is good) at the
expense of the majority who are consumers (which is very bad). In China in the
early 1980s, it was the other way round—the vast majority was farmers who saw
their incomes exploding, while the minority population of the cities was
protected by the state’s subsidies, which were in turn financed by income from
rural taxes.
But there is no way
the Chinese blueprint can work in North Korea. Income from taxes on farmers
will be too low, and demand for subsidies by urbanites will be too high. There
are two ways out of this dilemma: either the agricultural reforms are flanked
by similar measures in industry, so that the urban incomes can rise along with
food prices; or there is a large injection of cash to allow the state to import
food for a few crucial years. This would reduce upward pressure on domestic
food prices and/or finance subsidized food distributions to the urban
population until domestic production has reached the level of market
saturation. This does not only sound risky, in fact it is.
The announcement at
the September 25 session of the parliament to extend compulsory secondary
education by one year fits very well into this analysis. Note that the
extra year is explicitly not to be spent on ideology; students will be taught
“general basic knowledge and basic knowledge of modern technologies” (KCNA,
25.09.2012). Kim Jong Un kills two birds with one stone: true to his
promise to improve the
people’s living, he gives a gift to North Korean parents who, like their
compatriots to the South, are highly concerned about getting their offspring the
best possible education; he also invests in training a future workforce for the
new and dynamic domestic industry that will form the backbone of a reformed, or
rather, call it “adjusted,” national economy. Experience tells us that the
parliament might also have deliberated on a few more issues, about which we
will hopefully learn in the next few weeks.
To conclude, we
should give the new leader due credit for having acted faster and more
decisively than we had expected. The direction he is headed seems to point
toward pragmatism and economic
development. Meanwhile, the capital has turned even more into an object
of admiration or envy for the rest of the country. The stage has been set;
expectations have been created. Now comes the tough part: finding ways to deliver
on the economic front while maintaining stability of the political
system and managing the new diversity in DPRK society. Investment in
education is not the worst idea in this context. However, to cure the disease
without killing the patient won’t be easy.
