North Korea’s New Years Resolution
Kim Jong-un delivered a rare public speech on New Year’s Day, the first of its kind in 19 years. Among the usual calls for North Korea to remain a strong military power, there were also calls for North Korea to become an “economic giant” and signs that they could be looking to repair ties with neighbours, South Korea. This could be in the form of a much less restricted economy, which would allow for a lot more trade and investments to pour into the country. Recent reports in Germany are even suggesting that the regime have hired German economic and legal experts to help plan for an opening up of the economy. These reports have suggested North Korea will follow Vietnam’s model, with specific companies chosen for investment.
This seemed impossible only a few years ago under Kim Jong-un’s father (who passed away a year ago), as North Korea has been the most secluded country in the world. Its people are heavily controlled by the government; entry and exit from the country are extremely hard to come by, information is censored so much that the public knows little about the outside world and human right violations are common especially in the prison system. Alongside this the country is relatively broke, relying massively on the financial support of China and aid from South Korea and America to feed its people.
Leaving North Korea can prove a little tricky…
This is the where cynics are worried about Kim Jong-un’s motives. North Korea have made promises to stop nuclear weapon development in the past to help attain food aid from America, only to then renegade on said promises afterwards. North Korea are again in such a position with masses of their population starving, so critics are arguing Obama shouldn’t fall for such tricks again. To add insult to injury, North Korea launched a rocket on the 12 December to put a satellite in space, despite violating clear UN rules. The rocket showed the progress North Korea are making in creating Nuclear weapons, though there are no signs of the re-entry technology needed, let alone the capability to attach a nuclear bomb. Such actions betray the words of unity Kim Jong-un delivered in his New Years Speech.
North Korea’s missile range, as found on the Economist.
Yet the timing is good. Kim Jong-un has just completed his first year in power and looks a more passive figure than his father. He has the chance to change his countries fortunes and is still in the infancy of his reign, which is important because as times passes by the chances of Kim Jong-un changing the regime that so many deplore will diminish. Alongside this, South Korea has just elected a new president, the conservative female Park Geun-hye. This means the departure of Lee Myung-bak, who was a particularly hated figure in North Korea, and the start of a new more welcoming government in South Korea. President Park’s stance has been a halfway point between optimism and pessimism, stating that her agenda is to start with some small projects between the two countries and then see how Kim Jong-un reacts. If he follows his own speech then more unity between the two countries could begin.
South Korea’s first female president makes it onto the Times Front cover.
This would be extremely important to North Korea’s chances of success in opening up their economy, as its neighbours have been extraordinarily successful in expanding theirs. South Korea was one of the poorest countries in the world in the sixties, now they are ranked in the top 20. They are in fact the only nation to have gone from being a major recipient of aid to a major donor. If North Korea could gain access to such a lucrative market, then they could revolutionize their economy.
In 2011, South Korea were the 15th largest economy in the world in nominal GDP terms.
If they needed a model to follow then they should look no further than Myanmar. The nation was in a similar situation to North Korea only a couple of years ago, with little hope for change in the future. But as quick as you click your fingers, Myanmar have begun dramatic reforms to their country; opening up their economy, relaxing press censorship and even freeing the pro-democracy leader Aung San Suu Kyi. These reforms have seen improved growth for Myanmar, with its leaders now aiming to triple GDP per capita by 2016. North Korea on the other hand saw GDP shrink by a half in the 90’s, with little or no recovery since. By opening up its economy, North Korea could see real growth just like Myanmar, which could help lift a large proportion of its people out of poverty over the long run.
This graph found at the Washington Post, shows South Korea improvement and North Korea’s stagnation in GDP per capita terms.
Alas, this is just hopeful talk right now. If the north and south were ever to unite truly, it would cost the richer south a lot of money and time to integrate the deprived north – just look at the re-unification of Germany. While South Korea are more likely to be worried about North Korea’s nuclear weapon ambitions, with the two countries still technically at war and the country the most likely target of any attack. This makes Ms Park’s stance more understandable, as she remains cautious on fully accepting North Korea yet. For the same reasons America will remain weary to invest in North Korea if they did open up their economy, as the money could be directed into Nuclear Weapons development. All this also ignores the current UN sanctions on the country because of their continued violation of international rules. This puts the opening up of North Korea’s economy beyond just their control.
A New Year and a new leader could see the development of a new North Korea. But by continuing along the path to Nuclear Weapons, they could be shutting off the path for economic freedom.