news from Pyongyang
SCMP August 12
latest verbal spat across the Taiwan strait has overshadowed what may
prove a more far reaching development for Northeast Asia: change in
that anything good can come out of that country barely exist. There
has been more than a decade of dashed hopes of change, disappointments
punctuated by famines and mini-crises over strategic arms. However,
two apparently inter-related developments in the past few weeks indicate
that change is in the air, if not yet an established fact.
was the announcement by the North of economic changes which seek to
use price mechanisms to influence demand and supply in place of the
(official) planning and ration and (unofficial) barter systems which
came the meeting in Brunei between US Secretary of State Colin Powell
with his counterpart from this member of the "axis of evil", Paek Nam
Sun. This was signal for the restarting of dialogues between the North
and the US, the South and Japan which had been almost frozen since George
W. Bush came to office.
initiative for the re-start came from the North. It would have been
impossible without Pyongyang's surprising expression of "regret" for
the recent naval clash which left four South Koreans dead. But almost
as surprising was the speed with which Mr Powell responded, taking advantage
of the ASEAN Regional Forum to break away from his master's "evil" rhetoric.
the South's lame-duck President Kim Dae Jung was relieved to find that
after months of frustration there was a possibility of progress, and
perhaps even of the long delayed visit by Kim Jong Il to Seoul, reciprocating
KDJ's Pyongyang trip two years ago, taking place before he leaves office.
what are the factors which have brought all this together? The cause
of the naval clash is still a mystery. Possibly it was bad judgment
on the part of local commanders. Possibly it was engineered by the North's
leadership to make the sea boundary issue an issue in any talks. The
location of the boundary is politically sensitive for Seoul but is not
an issue which excites the US so could complicate US/South Korea perceptions
of priorities in dealings with Pyongyang.
the cause, the "regret" was evidence of Kim Jong Il's desire to re-start
dialogue. Various reasons are apparent. Firstly, the regime will badly
need to show that its new economic policy delivers results in the form
of improvement, however marginal, in living conditions. In turn, that
requires continued if not enhanced supplies of fuel, food and raw materials
from the outside world - including food from the South, fuel from the
US and others under the KEDO (Korean Energy Development Organisation)
the North may well have become worried that the lack of North-South
progress was playing into the hands of hard liners in the South and
would hand the presidency to conservative opposition leader Lee Hoi
Chang. There is a sense in the South that the "sunshine" policy had
failed. Whilst any government would want dialogue with the North, the
South had received little in return for its material help. There has
been scant progress on family reunion, almost none on economic cooperation,
and none at all on security issues. It was time for the North to appear
Pyongyang may have calculated that the "axis of evil" tag was to its
advantage. It increased the bargaining power of its missiles and other
so-called "weapons of mass destruction". Next year sees the expiry of
the North's moratorium on testing long range missile, and is also the
target date for providing light water reactors to the North. Given the
US fixation on missile sales especially to the Middle East, Pyongyang
may feel it is in a strong position to bargain money and recognition
in return for not selling weapons to other "rogue" states.
US for its part knows that its diplomatic priorities are now elsewhere.
It will be easier to claim some sort of victory over "evil" by a trade
with Pyongyang than in the Middle East. It also needs to shore up support
among its sceptical Asian allies in advance of any conflict with Iraq.
They want dialogue with the North.
there is the influence of China and Russia. Beijing's embarrassment
over refugees from the North may have increased its determination to
pressure Pyongyang both for dialogue and economic change. Russia meanwhile
has again become a player. President Putin has presented Russia as a
friend of North as well as South. Significantly, the breakthrough followed
immediately on Russian Foreign Minister Igor Ivanov's visits to Seoul
and Pyongyang. The
US could not afford to find itself in a minority of one, particularly
as it has been sensing a renewed anti-Americanism in the South based
on a perception that Bush's strong anti-North stance was against the
will all this lead very far? In 1994 , the situation seemed on the verge
of a major breakthrough when Kim Il Sung died suddenly just before he
was due to meet then South Korean president Kim Young Sam. Again in
2000, following the two Kims' summit and US Secretary of State Madeleine
Albright's visit to Pyongyang there was even a prospect that Mr Clinton
would meet Kim Jong Il. But the US election and subsequent events put
everything back on ice. Is there anything different now?
the diplomatic equation looks more favourable for the reasons given
above. Secondly, Kim Jong Il seems to be on firm political ground at
home. And now too there is a more direct link between Pyongyang's diplomatic
and strategic weapons manoeuvering and its domestic agenda - rescuing
economic changes are not yet a Chinese style liberalisation towards
a "socialist market economy". They are an attempt to rationalise the
North socialist system through more realistic pricing. Prices and wages
are being dramatically increased and the currency's value slashed. But
prices of scarce goods such as food and fuel will rise faster than wages.
This is partly an effort to influence supply and demand and partly to
bring the informal and barter economy within the official money economy.
They also provide incentives for over-plan production.
of this is similar to the very first reforms in China. However, North
Korea has yet to dismantle its commune system. Furthermore, the rural
impetus which first powered China's economy cannot be replicated in
North Korea. China was 80% rural, North Korea is only 40% rural. So
even price reform and improved availability of fertiliser and other
inputs cannot have such a major impact. At the best of times, the North
has usually needed to import food - in Japanese days it came from the
North should be an industrial country. So the question now is whether
it will be willing or able to get outside help to rebuild its physical
infrastructure, its railways, coal mines and heavy industries, and capital
to start labour intensive industries of the kind that spurred China's
export development. That takes us back to the problem that has stymied
North Korean reform for a decade. Dare it open up to foreign and South
could open to Hongkong and Taiwan capital without fearing they would
carry political dangers for a vast country. North Korea is rightly worried
that its political system can only be sustained if the country is sealed
off from a larger and vastly more prosperous South. The North may be
able to get some more help from China, Russia and Japan to rebuild without
relying on the South. But these neighbours want to see progress in links
with the South too.
the economic reform which seems to have been started with the price
reform will run into the sand if the regime is not prepared to take
more risks with its own survival. Only time will answer that question.
But recent events have got North Korea into a position from which real
change is a possibility. ends