CE’s work in the context of the New Year Address

Back in 2011, when many observers were still pessimistic about North Korea’s strategic intentions after the 2006-2009 tightening of North Korean economic policy, Andray and I pointed to how North Korea is shifting the basis of its legitimacy to economic performance. This year’s New Year Address by Kim Jong Un bears this shift out in its strong focus on the economy. As we have discussed before, North Korea faces significant challenges in developing its economy. Many observers of North Korea conflate intention with capability when it comes to economic development in North Korea. “Intention” deals with the question of whether the leadership in the country considers economic development a priority. “Capability” is about whether North Korea is able to successfully pursue the priority. Andray and I question whether North Korea has the economic policymaking capabilities and institutional capacity to avoid falling into the “resource curse.”

Some observers have argued that North Korea will not pursue a new economic trajectory, as this would risk regime collapse once North Koreans learn more about South Korea’s economy. In making this prediction, these analyses conflate “intention” and “capability,” and assume that North Korean policymakers also share the analysts’ conjectures.

As with any strategy, quality of execution matters. North Korea can prioritize economic development without risking collapse, if it executes well on this approach. People are more apt to compare their present and future to the past than to South Korea. If standards of living are getting better, and people believe it will continue to improve, North Korea can enjoy significant stability for a time. And the mood on the ground (in Pyongyang at least) is definitely one of optimism – people expect things to improve although clear policies supporting economic development have yet to be put into practice (but are being discussed). At the same time, Pyongyang has been using re-defectors to send the message that going to South Korea will not necessarily lead to better lives, and that it just might be better to stay put.

What does all of this mean for Choson Exchange? We first started pursuing the idea for CE in 2007, and launched our first program in 2009/2010 after a currency reform and the sinking of the Cheonan. Despite the gloomy and tough start, over the last 2.5 years, we have impacted over 200 program participants. Next year, we are poised to rapidly grow our program and we are excited that we will be reaching more young North Korean professionals in the 20-40 age range, and reaching more women through our Women in Business in program. We will be covering a wider range of policy and business topics. However the future evolves in the country, North Korea will need young businesspeople and young policymakers who have the skills needed to develop the economy and raise living standards. We are excited for the New Year.