A New North Korea: Could Kim Jong Un Liberate His Nation's Economy?

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KRT / Reuters

New North Korean ruler Kim Jong-un (C) pays his respects to his father and former leader Kim Jong-il (R) who is lying in state at the Kumsusan Memorial Palace in Pyongyang in this still picture taken from video footage of still images aired by KRT (Korean Central TV of the North) December 20, 2011.

To the outside world, the next leader of North Korea is a blank slate, a fat-faced young man in his late 20s who, according to people he went to school with in Switzerland over a decade ago, was a fan of Michael Jordan's. That's pretty much what we know. What we don't know is everything else, including what Kim Jong Un would do running one of the poorest, most isolated countries in the world.

At moments of transition like this, many people — government officials, policy analysts, scholars — want to hope for the best. They pick at any strand of information that might buttress a cause for hope. Call it the "Andropov likes jazz'' syndrome, after the late Soviet Premier and KGB chief, Yuri Andropov, of whom it was said at the height of the Cold War that he couldn't be all bad because, after all, "he likes jazz." So now, with Kim's father dead suddenly of a heart attack, the question is already being asked: Might he turn out to be a reformer? Cheong Seong Chang, a senior fellow at Seoul's Sejong Institute and one of South Korea's smarter North Korea watchers, is willing to answer in the affirmative. "I think there may be reason for cautious hope," he says.

The cause for hope, Cheong and others say, begins with the fact that as a young man Kim lived in Bern, Switzerland, attending school there under an assumed name from 1998 to 2000. He "has seen something of the outside world," Cheong says, "and he knows how affluent the West is." Cheong and others point out that Deng Xiaoping, the leader who transformed China, spent five years as a young man in France, where he hung out with Zhou Enlai and other young Chinese communists ("Dr. Mimeograph," Deng was called in those days, because of his facility around a copying machine).

Another reason the young Kim could move toward economic change, some say, is that he could claim to be building on small steps his father had taken. A special economic zone near the demilitarized zone is home to Kaesong Industrial Park, which houses factories of more than 100 South Korean companies making textiles, shoes and other low-end goods. In 2010 companies at Kaesong produced goods worth more than $300 million — not chump change in the Democratic People's Republic of Korea (DPRK). In the northern part of the country, Kim Jong Il had — at China's urging — blessed the creation of two new economic zones: Raeson, on the eastern coast of North Korea, and one on the island of Hwanggumpyong, near the border city of Sinuiju, through which three-quarters of all Sino-DPRK trade passes. China has long wanted the North to move toward more economic reform — and thus, stability — after the famine of the late '90s sent thousands of North Korean refugees across the border, putting the fear of God into Beijing about the possibility of economic collapse in the North.

Nor is it just the Chinese who might be prodding the younger Kim to go down the reform road. There is a lot of talk in Seoul and Moscow about the possibility of running a natural-gas pipeline from Russia down through the North to South Korea. According to press reports in Seoul, the South would agree to build a natural-gas-fired power plant in the North if Pyongyang would agree to the plan, which South Korean President Lee Myung Bak is said to be interested in. The Russians, moreover, have recently begun talking to Pyongyang again about forgiving the DPRK's Soviet-era debt — about $11 billion — in the hope of kick-starting greater trade ties between the two countries.

The point is that the younger Kim, if and when he establishes himself as the DPRK's new ruler, will have opportunities to push for change in his grim country. Beyond trade in low-end goods and minerals with China, North Korea has earned foreign exchange for years from a variety of illicit businesses: selling missiles and other weaponry to Iran, narcotics throughout East Asia and knockoff cigarettes and pharmaceuticals worldwide. It's not for nothing that North Korea has been called the "Sopranos State," given its portfolio of illicit businesses. Surely Kim Jong Un, having seen a bit of the outside world, and knowing how his fellow North Koreans live, would seek to change this. He just needs to make the right decisions after building support from the elders around him.

And there may lie the rub. Skeptics point out that Kim Jong Il never embraced the Chinese economic reform model, no matter how many train trips he made to allegedly gape at the wonders of the New China. North Korea's ruling ideology, invented by Kim Il Sung and called juche, means (among other things) self-reliance. To rely on outsiders for anything, trade included, can be seen as a sign of weakness. And if the price of greater economic engagement with the outside world beyond China means North Korea's standing down on its nuclear program — and with sanctions in place, it does — then the answer to that, from Pyongyang's perspective, has been clear for a long time. We'll just sit here, freezing in the dark.

Back in the 1990s, former South Korean ambassador to Washington Kim Kyung-won expressed his doubt that the so-called Agreed Framework — the nuclear agreement that President Bill Clinton signed with the DPRK in 1994 — would crack open the North politically and economically: "Substituting the strategy of opening and reform for the failed juche ideology would take away North Korea's raison d'être. North Korea exists as the antithesis of South Korea. If North Korea adopts an outward-looking market economy, it will inevitably appear to be a poorer, more backward, shabbier version of South Korea." Juche, the gift of the late Great Leader, has indeed been Pyongyang's raison d'être for six decades. Remember who Kim Jong Un is, and who his grandfather was.