(Source: Rodong Sinmun)
Kim Jong Un’s report to the Korean Workers’ Party Congress in early January set a clear general direction for the North Korean economy. Although the report itself contained little new policy, it emphasized Kim’s ambition to restore government leadership and control over economic affairs. Given the tremendous growth in the role of semi-private economic activity over the past few decades, this is a worrying signal that the state may seek to limit market activity and semi-private business, both of which are vital to the livelihood of a large segment of the population.
None of this should come as a surprise, however. Despite Kim Jong Un’s apparent willingness to experiment with loosened state control over the economy during the early years of his tenure, regaining state authority in areas where it had been lost since the 1990s was a central goal during Kim’s reign . This ambition is not just limited to the economy.
The government in totalitarian states has always viewed economic control as a central way to administer social structures, distribute privileges and penalties, and advance their ideological agenda. In their classic framework for totalitarianism as a system of government, Carl J. Friedrich and Zbigniew Brzezinski set a “centrally directed economy” as one of six necessary components for complete state control over society. The other five elements include the authority of the mass media and mass communication.
Hence, Kim’s emphasis on economic governance is part of a much broader program of political and social control, and the Congressional report made this clear in terms such as the need for a “firm political climate” and the struggle to eliminate all kinds of anti-personal factors. “ This was in part a reference to those economic officials Kim has long claimed not to work hard enough and with sufficient creativity in politics and management.
However, these terms also have a broader meaning. Although they are standard phrases in the country’s political vocabulary, in the larger context of the speech they indicate a broader political priority. Kim spoke explicitly about the need to curb the infiltration of foreign culture and media into the country more strongly, an indication of the consumption of smuggled South Korean dramas by a significant part of the population. Since cross-border smuggling began to increase in the 1990s, illegal consumption of foreign (and especially South Korean) culture has been rampant in the country. The state always acts against it with varying degrees of intensity. Kim called for “a powerful mass campaign against the practices that run counter to the socialist lifestyle, with deep respect for belief in socialism and love for and trust in their own things”; He also called for a “revolution in newspapers, news services, radio and television”.
In other words, the state should seek to compete with illegal foreign alternatives and stamp out the infiltration of foreign influence. Indeed, repression from outside influences was a hallmark of Kim Jong Un’s tenure. In the winter of 2020, Daily NK reported, the Presidium of the Supreme People’s Assembly passed a law against “reactionary thinking” which was defined as illegal.[…] hear, record or spread strangers [radio] Broadcasts; Importing and distributing foreign “unclean” recordings, video content, books, or other published material; and copying or distributing music that has not been approved by the state. “Those caught distributing such materials can be sentenced to death, and the law even punishes people with up to two years in a labor camp for using South Korean expressions or speaking with a South Korean accent.
The crackdown on South Korean culture is of course nothing new in itself. The North Korean government has always severely punished smuggling and illegal consumption of South Korean TV dramas and pop music, but Kim’s regime has stepped up such raids considerably. Not only do these moves reflect the high priority he attaches to suppressing external information, but they were also reportedly taken in response to certain events the regime was keen to control narrative – such as the rapprochement with South Korea and the Kim Jong summit Un and Moon Jae-in 2018, as well as the general downturn in North Korea’s economic situation and relations with the US and South Korea at the present moment.
In addition, information control was an overall high priority during Kim’s tenure. In 2014, Kim gave a speech at a large-scale meeting for “ideological workers” accusing the “imperialists” of “trying to infiltrate corrupt reactionary ideology and culture into our country” and “young people” and “service personnel” highlighted as a particularly receptive target group. He also demanded “[…] Put up [sic] Double and triple the “mosquito net” to prevent the viruses of capitalist ideology, which the enemy is persistently trying to spread, from infiltrating our border. “
These political statements seem to have had practical implications. For example, a 2017 study based on defector interviews found that crackdown on foreign media and unapproved information, as well as general smuggling, had become significantly harsher and more frequent during Kim Jong Un’s reign. Indeed, “[n]Not a single respondent believed it had become less dangerous to watch South Korean and other foreign dramas under Kim Jong Un, and the majority believed it had become more dangerous. “ A source in North Korea told Daily NK in early 2018: “[i]It used to be that you only needed money to watch South Korean dramas, but that’s no longer the case. Now only officials or agents from the Ministry of State Security (MSS) can openly watch them, while ordinary people have to find secret methods to report them. “
Liberalization and control part of the same story
While this does not seem intuitive, Kim Jong Un’s early and significant experimentation with economic liberalization and relaxation aligns with the trend of greater control over information. Some of the most important changes have been summarized in the so-called “Our Style Economic Management Methods” for institutional changes that enabled a significant decentralization of management and production planning in the state sector and allowed agricultural units to freely sell or keep 30 percent of its production and allowed some limited private investment in the small business sector, to name a few examples.
Kim could have intended such market mechanisms to increase profitability and productivity. At the same time, as is the case with all other measures to ease economic détente in North Korea, these political experiments have primarily formalized the private economic activities already taking place in practice. In this way, the state also tried to manage and monitor such activities, in part to gain financial benefits through taxes and fees. In addition, in recent years the state has abandoned previous reforms in areas such as foreign trade in order to re-centralize control. Even in the heyday of institutional changes in economic management, the state refrained from legalizing common practices such as actual, fully private corporate governance.
The most obvious and visible example of this dual stance in economic governance is the growth of general markets in the country. Many facets of the market trade were illegal when they became commonplace after the famine, and yet huge marketplaces emerged to fill the void of the failed state distribution of food and other necessities. Now most markets are managed by the government, which collects taxes, fees and issues permits to trade in the market. Indeed, one of the most thorough empirical studies of the market system concluded: “[…] The general market system developed as a direct result of North Korean government policy. “ Although very little is known about the content of the amendment and its implementation, a recent example seems to be the revision of the country’s corporate law that the Supreme People’s Assembly passed in early November. According to reports, semi-private companies that enter into contracts with state-owned foreign trade companies are incorporated into the larger state-owned companies with which they are affiliated and placed under the administration of the Labor Party.
Hence, the formalization of private economic activity in the Kim Jong Un era was never about liberalization for liberalization’s sake. Increased government scrutiny has always been a key goal, and the recent declarations of increased scrutiny in Kim’s congressional report should be seen as accomplishing that goal. The state currently seems to be pushing back much of the freedom it had previously granted to economic actors. In retrospect, however, it remains doubtful whether Kim Jong Un was ever committed to comprehensive, transformative economic reforms. So it is important not to overdo the regime’s permissive stance on market mechanisms during the early years of Kim’s rule.
When the planned economy collapsed in the 1990s, the regime effectively lost several government tools central to any modern state, such as the ability to manage and monitor much of the economy and to fully regulate its borders. Corruption made smuggling and illegal crossings a matter of course, and the state tacitly allowed such activities because they were economically important. Symbolically, overflows to South Korea have declined fairly consistently during Kim’s tenure (by an extreme 78 percent this year), at least in part due to increased border controls. Simply put, Kim has affirmed social control throughout his reign, and the remarks in the Congressional report are part of that pattern.
Kim’s endeavors are somewhat understandable. Every state tries to control its borders and determine economic policy. The North Korean state, like all states, has to tax business transactions in order to generate state revenue. However, the measures currently under way and those on the horizon may significantly increase economic hardship for the civilian population who depend on market trade and private economic activity to survive, and their indulgence in innocent South Korean drama is now punished even more severely than before . The ambitions for a stronger role of the state in the economy expressed in Kim’s congressional report are part of a broader agenda of generally more robust social control and should not be understood in isolation.