Kim Jong-un needs market economy to tighten control



By Kim Jae-kyoung



North Korea is expected to unveil reforms at a rare party congress in May, in a desperate bid to subdue internal tensions and maintain leader Kim Jong-un's domestic control, according to North Korea experts.



The effects of international sanctions against North Korea and its worsening relations with China are deepening the isolation of the hostile country and forcing Kim and his regime to find a breakthrough internally.



The experts forecast that Kim will introduce important economic changes at the seventh Workers' Party Congress, slated for early May. The last party congress was held in 1980.



"With disruptions to his U.S. dollar cash flow caused by the sanctions, the closure of the Gaeseong Industrial Complex and the upcoming seasonal dips in the availability of food, Kim needs to show the people that he has not forgotten the ‘prosperity' line of Byeongjin," William Brown, a professor at the Georgetown School of Foreign Service, told The Korea Times.



The Byeongjin line is the country's policy of pursuing simultaneous development of nuclear weapons and bolstering the economy. In his New Year message, Kim vowed to revitalize the moribund economy and upgrade people's living standards.



"I would think he would use the congress to do that," Brown said. "Optimistically speaking, he might formalize more of a legitimate market system, changing the exchange rate and state wages and prices to reflect market realities."



This expectation does not sound implausible considering North Korea's isolation from the rest of the world has been deepening, with China halting purchases of its coal, metal ore and other minerals, which could sharply lower the cash flowing into the economy.



North Korea's economy is so weak that China withdrawing its support will further deteriorate not only the nation's finances but also the people's living standards. This will combine to force Kim to allow an open market, if limited in scope.



"The command economy is becoming so weak that it can't fend off the rise of natural and rather chaotic private markets," Brown said. "The best evidence for this is the growing circulation of U.S. dollars in North Korea.



"This is an amazing development in an economy that not long ago only used socialist ration tickets as a kind of pseudo money. Kim Jong-un has been smart enough not to resist the increased use of money, especially hard currencies, and markets."







Worsening relations with China



The worsening relationship with China, which used to be North Korea's last resort, is lending credence to the expectation that Kim will introduce some changes at the May gathering.



"The North Korea-China relationship is worsening and social control is tough," said Kongdan Oh, an Asian Studies specialist at the Institute for Defense Analysis in the U.S. "Kim Jong-un needs large funds to stage the party congress."



Since China agreed to join the latest sanctions against North Korea, the two countries have been trading barbs.



On March 2, the United Nations Security Council passed unanimously a resolution to deprive Pyongyang of funds if it continues its nuclear and ballistic missile programs, following its fourth nuclear test in January and the launch of a long-range rocket in February.



Chinese President Xi Jinping has been calling for dialogue to resolve the conflict on the Korean Peninsula but North Korea has rejected the demand, saying that the repressive country will not give up its nuclear and ballistic missile programs.



Asked whether his country felt pressure from China and other powers, So Se-pyong, North Korea's ambassador to the United Nations in Geneva, told Reuters: "Whether they are going to do anything, we don't care. We are going on our own way. (We are) not having dialogue and discussions about that."



In a recent interview with The Straits Times, Peking University Northeast Asian expert Wang Dong said China's sanctions will likely trigger ramifications for bilateral ties with North Korea.



"China will not tolerate North Korea's continuous pursuit of nuclear weapons and delivery capabilities, which poses a serious threat to China and to regional security," Wang said.



