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North Korea Rolls Back Some Economic Reforms, Strengthens State Controls

North Korea has claimed it has exploded a nuclear device, bringing the isolated country to the center of the world stage. A year ago, VOA correspondent Luis Ramirez became one of a very few Western journalists to visit Pyongyang. He had this report about the impoverished country's tentative economic reforms.

At Pyongyang's Grand People's Study House, a giant library, students listen to a teacher describing how to use the latest version of an American computer operating system.

Outside, Pyongyang's streets are dotted with vendors selling snacks, drinks, and offering bicycle and shoe repairs. Second-time visitors to this reclusive nation say there are a few more cars on what are, overall, largely empty streets.

These scenes, combined with reports of growing trade with China and South Korea, might give the impression that North Korea is opening up. However, there are - more often than not - indications that little is changing.

Moments after arriving in Pyongyang, a government guide lays out the rules for a group of visiting American journalists.

"If you want to take photos of Korean people, then beforehand you have to ask permission. So before you take photos, first of all, you ask permission," the guide said.

The guides repeatedly refused reporters' requests to interview or photograph Pyongyang's sidewalk entrepreneurs. They also refused to let reporters near a joint economic zone established two years ago near the South Korean border - a sign that North Korea is no longer eager to showcase its reforms.

The reforms began three years ago, as part of an effort to revive the economy, which began to collapse in the 1990s after North Korea stopped receiving subsidized fuel and other goods from its former communist allies in Eastern Europe and the old Soviet Union.

Among other things, the government ended controls on wages and most prices, which led to massive inflation. But at the same time, it began to officially allow some private commerce, after more than 50 years of controlling distribution of most goods - from food to clothing to steel.

There are questions as to whether the changes reflect any serious desire to reform the battered economy.

Instead of expanding the 2002 reforms, the government appears to be scaling them back. In October 2005, authorities resumed the ban on the sale of grain on the open market - forcing people to once again depend on the public distribution system for their most basic food needs.

Andrei Lankov, Korean studies professor at South Korea's Kookmin University, says the Kim Jong Il government is not following communist ally China's economic liberalization path. He says the two cases are vastly different with China leading the reform plan and North Korea legalizing an underground system.

"In China, they were leading the development. In North Korea, the government was sort of dragged by the situation. It was not really leading the economy. The economy moved itself," he explained. "The government had no way but to reluctantly admit the changes, which had been taking place before."

Professor Lankov says reforms or change are viewed by the Kim regime as a threat to its tight grip on power on the divided Korean Peninsula. He notes that South Korea's high standard of living and democratic government is seen as dangerous competition. He says Korea could be compared with what happened to Germany - which was also a country with Cold War divisions. He says North Korea is painfully aware that communist East Germany ceased to exist after reforms led to its unification with capitalist West Germany.

"In Korea, you have a divided country and if North Koreans start reform, started changing themselves, what will stop North Koreans from simulating (emulating) East Germans? It's a question (for which) the North Korean leaders themselves have no answer," he said. "They understand that if they lose control, they can be overthrown in no time."

At the capital's Mangyongdae Children's Palace, youngsters are taught to venerate their leader through painting, performances and poetry.

Twelve-year-old Rim So Yon zealously praises Kim Jong Il. She says she has never met him but hopes to do so one day.

When a reporter asks the girl if she knows what life is like in South Korea, a guide protests and orders the reporter to shut off his recorder.

"Excuse me, excuse me. Turn it off. It's too big," the guide instructed.

The guide says the question is "too big for a 12-year-old child." After the reporter insists, the guide hesitantly and vaguely asks the child the question. The child meekly answers that she knows life in the South is "good."

Despite official bans on communication with the South, many North Koreans get glimpses of life there through radio broadcasts and illicit recordings of South Korean television soap operas.

North Koreans are taught that their country is a paradise. The government promotes a cult of personality - teaching North Koreans their leader is god-like - a stark contrast to his international image as an absolute ruler who enjoys a life of luxury and has embarked on building nuclear weapons even while his people endured famine.

Choe Hye Ok is a 26-year-old guide at a tower honoring the country's ideology of self-reliance, known as Juche. She says Kim Jong Il is the man of her dreams.

"Of course, he is a great theoretician and noble man. He has a noble nature. He is a genius. He can create art and literature. He's a real genius," she said.

RAMIREZ: "Is he a handsome man?"

"Haven't you seen him?" she asked. "You see, I'm not married yet, but I'm looking for the leader general's style - if there is a man like him."

It is difficult to gauge whether the devotion shown by Ms. Choe and others is sincere. Those who are allowed contact with foreigners are carefully screened to ensure their ideology will not be swayed by outsiders - whom one guide described as "contaminants."

In this culture isolation from the rest of the world, some analysts question whether North Korea could truly liberalize under the current government. One Korea expert points to the examples of China and the former socialist nations of Eastern Europe, saying transitions there happened only after changes of leadership.

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