The Future of North Korea

May 1, 2002

Introduction

The Korean peninsula has entered a period of considerable change and uncertainty. This paper attempts to sketch out how internal and external forces may shape outcomes in North Korea over the next several years. The range of plausible outcomes is huge, and the paper identifies four possible end states: successful reform and engagement, “muddling through,” elite conflict that could affect the nature of the state, if not the regime, and finally, mass mobilization that could threaten the regime itself. This analysis proceeds under a number of assumptions.

First, the North Korean regime is concerned foremost with regime survival; it regards economic reform as potentially destabilizing. Admittedly, evidence on this point is mixed. Certain recent changes in rhetoric, diplomatic opening, and economic policy signal an amenability to change. Kim Jong-il’s 2001 visit to China and the visit’s coverage in the North Korean media, for example, are often cited as a signal of a new receptivity to reform. Yet one wonders if the North Korean leadership comprehends what reform entails. After seeing the skyscrapers of Pudong, Kim Jong-il reputedly told his subordinates that he wanted the same for North Korea -- though whether he meant a center of financial intermediation or simply “tall buildings” is unclear. Perhaps some insight can be gleaned from the request, made shortly after the visit, by the DPRK embassy in Canberra that the Australian government supply North Korea with architects specializing in large commercial structures! Whatever the motivation, these initiatives have thus far involved only a small share of the population directly and have required little change in existing internal social and political relations “on the ground.” It would be premature to characterize the North Korean regime as irreversibly committed to reform.

Second, the North Korean economy remains in dire straights; the Bank of Korea’s characterization of the North Korean economy as experiencing a sustainable industrial recovery is probably not credible. If one takes the Bank of Korea estimates seriously, they imply North Korean GDP increased more than 11 percent and agriculture output increased more than 14 percent between 1999 and 2001. If this is the case, it begs the question why North Korea continues to rely on outside assistance and why in May 2002 World Food Program officials described the DPRK as being on the brink of a famine.