North Korean Reformer’s Return May Signal Economic Policy Shift
August 22, 2010, 11:32 AM EDT
By Frances Yoon
Aug. 23 (Bloomberg) -- North Korea restored economic reformist Pak Pong Ju to its leadership, Yonhap News said, a sign the communist nation that’s relied on food handouts since the mid-1990s may be ready to give market forces another chance.
The former North Korean premier was reinstated as first deputy director of the central committee of the Workers’ Party of Korea, according to an announcement on state-run Central Broadcasting Station, Yonhap News reported Aug. 21.
Pak, 71, fell afoul of North Korea’s military and party hardliners three years ago over his efforts to push market- oriented reforms, according to the Yonhap report. His return may indicate the leadership is willing to test economic changes again, said Kim Yong Hyun, a professor of North Korean studies at Dongguk University in Seoul.
“The North may be thinking that they don’t have a choice but to use more flexible policies to fix the economy,” Kim said. “Pak may have been emphasized within the North’s party as the hands-on person to fix its problems.”
A poor harvest and a currency revaluation combined to cause widespread economic hardship in the communist state last year, according to a UN Human Rights Council report in March. Rice prices jumped 70-fold, Free North Korea Radio reported, citing a resident of Chongjin on the country’s east coast.
North Korea executed Pak Nam Gi, head of finance and planning, after the botched revaluation sparked unrest by fueling inflation, eroding savings and worsening shortages, South Korean media reported earlier this year.
Food Shortage
North Korea is suffering from worsening shortages, and the UN World Food Program said in May its food aid to North Korea would run out after one more month.
Sanctions imposed on the communist state after its second nuclear test caused the country’s international commerce to shrink 9.7 percent last year, according to Seoul-based trade agency Kotra. North Korea doesn’t release its own trade figures.
North Korea’s economy is equivalent to 3 percent of South Korea’s nominal gross national income, according to Bank of Korea data released June 25.
“Pak’s return may not be successful if North Korea doesn’t improve relations with the international community,” professor Kim said. “He may provide short-term solutions but without improvement externally, and within North Korea’s system, radical change will be impossible.”
South Korea’s government can’t confirm Pak’s return to a leadership position in North Korea, said Lee Jong Joo, a spokesman for the Unification Ministry, who acknowledged the broadcast announcement.
August 22, 2010, 11:32 AM EDT
By Frances Yoon
Aug. 23 (Bloomberg) -- North Korea restored economic reformist Pak Pong Ju to its leadership, Yonhap News said, a sign the communist nation that’s relied on food handouts since the mid-1990s may be ready to give market forces another chance.
The former North Korean premier was reinstated as first deputy director of the central committee of the Workers’ Party of Korea, according to an announcement on state-run Central Broadcasting Station, Yonhap News reported Aug. 21.
Pak, 71, fell afoul of North Korea’s military and party hardliners three years ago over his efforts to push market- oriented reforms, according to the Yonhap report. His return may indicate the leadership is willing to test economic changes again, said Kim Yong Hyun, a professor of North Korean studies at Dongguk University in Seoul.
“The North may be thinking that they don’t have a choice but to use more flexible policies to fix the economy,” Kim said. “Pak may have been emphasized within the North’s party as the hands-on person to fix its problems.”
A poor harvest and a currency revaluation combined to cause widespread economic hardship in the communist state last year, according to a UN Human Rights Council report in March. Rice prices jumped 70-fold, Free North Korea Radio reported, citing a resident of Chongjin on the country’s east coast.
North Korea executed Pak Nam Gi, head of finance and planning, after the botched revaluation sparked unrest by fueling inflation, eroding savings and worsening shortages, South Korean media reported earlier this year.
Food Shortage
North Korea is suffering from worsening shortages, and the UN World Food Program said in May its food aid to North Korea would run out after one more month.
Sanctions imposed on the communist state after its second nuclear test caused the country’s international commerce to shrink 9.7 percent last year, according to Seoul-based trade agency Kotra. North Korea doesn’t release its own trade figures.
North Korea’s economy is equivalent to 3 percent of South Korea’s nominal gross national income, according to Bank of Korea data released June 25.
“Pak’s return may not be successful if North Korea doesn’t improve relations with the international community,” professor Kim said. “He may provide short-term solutions but without improvement externally, and within North Korea’s system, radical change will be impossible.”
South Korea’s government can’t confirm Pak’s return to a leadership position in North Korea, said Lee Jong Joo, a spokesman for the Unification Ministry, who acknowledged the broadcast announcement.