North Korea between Reform and Security

Abstract

This dissertation is a comparative study of influences from security environment to economic reform decisions in China and North Korea, which resulted in a sharp contrast of economic consequences between the two countries. The puzzle was why North Korea did not, or failed to launch a comprehensive economic reform and opening as China did starting in the late 1970s. Many previous studies on the socialist economic reform, particularly on China, concentrates on the conditions of leadership change or urgent domestic needs to be the major causes of economic reform and opening. But there had been limitations in explanations on the North Korea case which were partly due to the lack of consideration of an additional condition, the influence of external factors. This study argues that the external factors, mainly the security environments, is one of major constraints of reform. Since the basic purpose of a socialist leadership was to keep their political regime safe and stable with economic prosperity, the reform decisions could not be allowed without a guarantee of regime security. In their interactions with the outside world, the security environment should be interpreted as supportive and utilizable for economic development with keeping the political regime safe. If the interpretations turned out as bringing more political threat than economic benefit, they became constraints of reform and opening. Four particular periods were selected for case studies on China and North Korea, two for each country regarding the critical years of reform attempts. The success or failure of each reform attempts found their causes from the interaction between the leadership and security environments. These interactions were reflected in the decisions of economic reform through two routes of influences, the political discourse and the political dynamics. One route is the intentional change of political discourses. When the security environments were interpreted as having improved, the leadership could utilize this as an opportunity to facilitate the pro-reform political discourses in their ideological slogans and propaganda. Another route is the construction of political dynamics. The improvements in security environments helped the top leadership to construct the pro-reform political dynamics among elites, empowering the economic experts to promote pragmatic economic measures. The cases on China dealt with two periods, one around the year 1978 and the other 1992, both critical years of reform and opening. The former was the starting point of reform with the rise of new leadership, and the latter was the second breakthrough which took place despite temporary retreat after the Tiananmen Incident and the end of the Cold War. The security environments were interpreted as becoming supportive by the reform leaders, and they managed to change the political discourses toward pragmatism and construct the political dynamics to shift power to the reformers. In North Korea, the two cases dealt with the periods around the year 1984 and 2002, times during which the leadership of Kim Jong Il had pursued certain pro-reform economic measures. There were a series of economic measures, including the Equity Joint Venture Law in 1984 and the announcement of the July 1st Measures in 2002, which however turned out to be limited and temporary in their effects. Security environments were fluctuating and significantly deteriorated right after the initiation of these reform attempts. The political discourses quickly returned to anti-foreign concepts and intensified with the military-oriented slogans due to the international changes interpreted as increasing threats. In political dynamics, the economic experts conducted the pro-reform measures whereas the conservative Party and military leaders maintained their superior political power. Although the economic experts had clear intentions of economic reform, the deterioration of security environments easily shifted the political power to the conservative leaders to put priority on military buildup and ideological mobilizations. The Chinese and North Korean leadership had clearly different interpretations on their security environments, influenced by accumulated historical memories and their interactions with the superpowers, neighboring countries, and another part of divided nation. Security environment of China was selectively utilized as opportunities with continuous improvements to facilitate pro-reform discourses and pro-reform dynamics. This resulted in continuous progress of the reform decisions. In North Korea, however, security environment was interpreted as rapidly deteriorating due the prolonged suspicions on foreign powers and conflicts with South Korea and the United States. This made North Korea intensify the anti-foreign discourses and limit pro-reform political dynamics. After several decades of these repeated interactions between external factors and the leadership, the economic performances turned out quite different in two countries. Now that a third generation leader Kim has emerged, North Korea is again seeking opportunities for economic reform and development while simultaneously seeking to preserve political regime security. This study provides some insights to both North and South Korea in terms of the changes in the security environments and the consequent policy decisions which changed the interaction dynamic between economic reform and regime security.