Thursday, May 12, 2016

The North Korean Workers' Party Congress

The seventh Workers' Party of North Korea congress has just ended, the first since 1980 when the nations' first leader, Kim Il Sung, announced that his son, Kim Jong Il, would succeed him, which he did  in 1994.  This congress was convened by his son, the 33-year old Kim Jong Un, who has used it to consolidate his power.  Among the more noticeable  of  things that happened is that he was named to be Chairman of  the party.  It has been widely noted that the congress fits in with a policy of elevating the party in comparison with the military, which was apparently favored by his late party.  So the congress elevates both the party and Kim Jong Un.

What is of perhaps more interest for  readers of this blog is what economic policies came out of the congress.  It is interesting to me at least that prior to the congress outside observers were very much up in the air about what it would do regarding economic policy, aside from reconfirming the "byungjin" policy of simultaneous pursuit of nuclear weapons and economic growth, or as some wags have put, both guns and butter. 

A particular issue of controversy involves agricultural policy, which has involved an unofficial spread of more  or less free markets.  This came about after the famines and extreme food shortages of the 1990s and early 2000s, with the situation much improved, if not  great. Many thought that perhaps the congress would make this policy official, although it was always understood that they might not.  In the end, they did not.  Official ideology of socialism remains in place, even as the reality in agriculture at least is one of more or less free markets now.

Probably the only other notable decision was to resume five year plans.  Many outsiders probably think that they never went away.  We (and I am guilty of this) have long described its economic system as this holdover of Stalinist command socialist central planning, and indeed it is a socialist command economy, with the notable exception of the agricultural sector as noted above.  However, fiver year plans were abandoned in the late 1980s while Kim Il Sung was still in power and prior to the end of Communist Party rule in the Soviet Union and Eastern Europe.  So this is also a return to a more officially formal socialist position.

BTW, it should be noted that the North Korean economy is probably doing better than many think.  We are back to a situation where there are widely competing estimates of how  its economy is doing.  The Bank of (South) Korea estimates that North Korean GDP has been growing at about 1-2% per year, but numerous other observers, such as Andrei Lankov, who is based in Seoul, think it is  growing at more like 7% per year.  There certainly has been a lot of construction going on in Pyongyang recently, although this at least partly reflects a growing inequality between the capital city and the rest of the country in economic conditions, with the northeastern part especially poor.  Much of these disagreements indeed involve trying to figure out some of  these sectors such as agriculture, where it is clear that official data probably do not reflect reality.

Barkley Rosser


Myrtle Blackwood said...

Thanks for posting this helpful article, Barkley. Bloomberg published an article in 2007 that linked the famines in North Korea to ecological changes wrought by over-intensive agriculture, energy shortages and deforestation.

"Reclaiming marginal land appeared successful for a while as North Korea's overall crop yields increased, agriculture specialist Edward Reed wrote in a 2001 University of Wisconsin study. ``Yet from the mid-1980s on, there appears to have been a slow decline in production, probably due to soil depletion from overintensive production,'' he said. By the early 1990s, yields dropped so low that hungry North Koreans went to the mountains to bring even more land under cultivation. Meanwhile, increased demand for firewood -- the result of an energy shortage caused when former communist trading partners halted cut-rate fuel exports -- added a new incentive to strip the mountainsides...." said...

It is an old irony that in principle the command socialist economies could have done better on environmental matters than the more market capitalist oriented economies. But in general they massively failed to do so, with their planning focusing on quantities of output with little to no concern for either pollution destruction of resources and habitats.

In terms of agriculture in North Korea was extreme in its mismanagement of resources and failure to preserve productivity, with indeed massive deforestation and erosion leading to flooding and all sorts of disasters. Thus culminated in the famines of the 1990s. This is very much what triggered the shift to the still unofficially approved mostly free markets in agriculture, although there has not been all that much improvement in managing resources, despite a lot of talk about reforestation. said...


In the wake of the congress, a new economics university has opened in Pyongyang. Not clear what they will teach there, although apparently online courses will be available.

For anybody interested in following DPRK developments, the blog is excellent.