The communist dynasty’s fits and starts stem from an economic Catch-22: Reform may prove suicidal
Back in 1989, as the communist bloc began its tumultuous collapse, North Koreans were more than twice as wealthy as their comrades in China. Then came the Chinese economic miracle, offering the most successful formula for transition from poverty to prosperity in recorded history. Across the border in Pyongyang, however, the ruling Kim dynasty resolutely declined to follow.
Just why successive North Korean leaders—not only Kim Jong Un, but also his father Kim Jong Il and grandfather Kim Il Sung—were so reluctant to embrace change is an enduring puzzle. The Beijing model, after all, managed to pull off a rare trick, delivering market-led growth, integration with the global economy, and entrenched Communist Party rule all at the same time.
As recently as 2016, in a party congress speech, Kim still championed his country’s heroic, guns-over-butter resistance to the “wave of bourgeois liberty and wind of ‘reform’ and ‘openness’ around us”—a thinly veiled rebuke to China.
His more recent comments suggest a shift. He has charmed South Korea with talk of opening up for investment, at least in restricted economic zones. And he’s talked of switching focus from the development of North Korea’s nuclear arsenal to concentrate full time on a more China like “socialist economic construction.”
Whether that represents a true change of heart, or just a tactical retreat in the face of sanctions that reduced trade with China by more than 60 percent in the first quarter, is impossible to know for sure. What’s clear is that Kim and his family have long seen the opening up of the state they so ruthlessly isolated from the rest of the world as a severe risk to the legitimacy of their rule.
This story is from the May 28, 2018 edition of Bloomberg Businessweek.
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This story is from the May 28, 2018 edition of Bloomberg Businessweek.
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