A highly anticipated Korean Workers Party Congress got underway in North Korea on Tuesday, with leader Kim Jong Un frankly admitting failures in economic policy.
“Though the period of implementing the Five-Year Strategy for the National Economic Development ended last year, almost all sectors fell a long way short of the set objectives,” Kim admitted in his opening address at the 8th KWP Congress in Pyongyang, according to state media.
The Congress had opened on Tuesday but its appearance in North Korean state media was only monitored overseas and in South Korea on Wednesday. Footage and images showed Kim, in tunic and spectacles, speaking from an elevated podium dominating a hall packed with 4,750 besuited KWP delegates and about 2,000 observers.
Self-reliance – a key theme in state media – was emphasized.
Calling the five years before the Congress a period of “unprecedented, worst-ever trials,” Kim said, “The key to breaking through the existing manifold difficulties with utmost certainty and speed lies in consolidating our own strength, our internal force, in all respects.”
Kim’s speech made clear the multiple challenges his state faces.
Economically, it has been frayed by a year of sanctions, anti-pandemic measures and natural disasters. Strategically, Kim’s high-profile engagement with outgoing US President Donald Trump failed to deliver any goods, after the collapse of a 2019 summit in Hanoi without agreement.
Kim’s self-criticism very possibly generated a ripple of horror in his audience. It suggests that other KWP officials will be required to make similar admissions. It also signals possible economic changes to come.
As such, Kim’s comments went some way towards addressing one of two major questions Pyongyangologists had hoped to see answered during the Congress.
The first question hinged upon the policy responses Pyongyang will undertake to staunch an economy bleeding from ultra-harsh anti-Covid-19 measures, US and UN sanctions, and heavy flooding last year.
However, the second major question – what North Korea’s policy towards the US will be as the Joe Biden administration prepares to take office – remains unanswered.
And it may not be addressed. Experts say Communist Party congresses customarily restrict their agenda to economic issues, notably the approval of five-year plans, rather than strategic or diplomatic issues.
It is unknown how long the KWP Congress will continue but the last – in 2016 – ran over four days.
More broadly, the convening of the meeting suggests the stabilization of North Korean power structures under the reign of the third-generation Kim and a possible emulation of Chinese approaches to governance.
‘I’m sorry – now it’s your turn’
Go Myong-hyun, a North Korea watcher at Seoul think tank the Asan Institute, offered two interpretations of Kim’s surprise mea culpa.
The mundane explanation is that it builds on Kim’s “man of the people” persona, Go said, noting that during a massive military parade in October Kim had even shed a tear.
The less benign interpretation is that “sorry” is a classic communist device.
“If a North Korean leader does that, that means everybody else under him has to do the same,” Go said. “The leader cannot be held responsible for the failure, so that is a way to enforce disciplinary action on all members of the regime collectively.”
Another surprise, according to Go, was that “Pak Bong Ju has been in charge of the economy and economic reform measures that allowed the jangmadang, or former black markets, to expand, so there is a clash between the failures in the speech and Pak Bong Ju still being there.”
Pak is the deputy head of the KWP’s Central Committee, while the jangmadang have now sprung up all over North Korea in plain sight and with the blessing of officialdom.
The markets have granted the economy a more effective-than-ever pricing and distribution mechanism, and granted the populace better-than-ever access to consumer products.
They have also led to a new class of North Korean entrepreneurs (donju – money masters) who are heavily reliant on cross-border trade with China. But indications in recent years are that donju have been switching to investing in local manufacturing of products for local consumption, a de facto import-substitution trend.
The surprising tolerance for Pak’s presence stands in contrast to the fate of the official responsible for a bungled currency reform effort in 2009. He ended up in a political prison camp as the price of failure, Go said.
In his speech, Kim laid “failures of socialism” at the door of internal and external factors.
“His speech is quite frank and the documents that will be delivered [to delegates] are likely to be even more frank,” Andrei Lankov, a North Korean expert at Seoul’s Kookmin University, told Asia Times.
“Everybody understands it is grim, the question is ‘how grim?’ We have a combination of sanctions and unusually tough quarantine measures and this seems a real danger to the economy.”
Reasserting self reliance
Yet Covid-19 was barely referenced in Kim’s speech. The refusal to blame the pandemic is surprising given the harshness of measures to quarantine the country and its under-resourced medical system.
North Korea has closed its borders to China, which is responsible for 80- 90% of trade, resulting in, according to some estimates, a near 10% plunge in GDP this year.
According to the commander of US Forces in South Korea at a recent forum, Pyongyang has deployed crack special forces troops to its China border to back up Border Guards who have proved bribable, leading to the permeability of the frontier.
So high is fear of infection that not only has trade come to a virtual standstill, even Chinese humanitarian aid is being held up at the border, Lankov said.
Kim’s speech signals a roll back of the marketization of the economy and an expansion of the role of the state, “so becoming more of a planned economy,” Goh said.
Moon Chung-in, a high-profile advisor to three South Korean presidents on North Korea, told Asia Times before the Congress got underway that he anticipated a more self-reliant policy to be promoted.
“I don’t know to what extent self-reliance can overcome challenges, but if you look at North Korea media reports their position is very clear,” Moon said. “That position is, ‘Nobody is going to help us, we have to find our way to survive and get prospering.’”
Yet North Korea is massively dependent upon China.
“They are trying to reduce the level of dependence,” said Go. “From my interpretation, even after Covid, Kim is going to use the opportunity to limit exposure to the outside economy.”
China dependence extends from the economic to the political sphere. And breaking that dependence raises risks when it comes to Pyongyang’s leverage with Washington.
“The dilemma for North Korea is that the only provocation left [toward the US] is an ICBM launch and that is a high-risk gamble,” Go said. “To minimize that risk, they need to count on Chinese support, and I think the North Koreans are unsure about that. “
Stabilization and inclusivity
KWP congresses have been resurrected under the leadership of the third-generation Kim. They had come to a halt under his grandfather, Kim Il Sung, with the last one, the sixth, taking place in 1980.
Not a single congress took place during the reign of his father, Kim Jong Il, who held power between 1994 and 2011. The 7th KWP Congress brought the tradition back to life under Kim Jong Un in 2016. The ongoing 8th KWP Congress is the second of his tenure.
It suggests a return to, and normalization of, power structures that his notoriously opaque father, who rarely appeared in public, had ignored.
“In terms of decision-making structures there is certain form of poolism,” Moon said. “There was fierce bureaucratic competition – between the party and the state, and sometimes between the party and the military.
“This is how Kim Jong Il ran the system. But now, I think under Kim Jong Un, it has become normalized.”
Certainly, the current Kim has made a show of moving decision-making from backroom discussion to a huge national body. Approximately 1,300 more delegates are attending the 2021 Congress than the 2016 meeting, according to South Korean media analyses.
That marks a change from the past. “I would say Kim Jong II ran [North Korea] in an impromptu way. Kim Jong Un is running it in a much more institutional way,” Moon said.
The eradication of bureaucratic infighting and clarification of power structures may make today’s North Korea a more stable polity. Still, that does not mean that policy-making in what Moon calls a “one-man state” has been democratized. Much of the Congress is optical.
“After Kim Jong Un took power he decided to move the symbolic emphasis in politics from the military to the party” said Lankov. “It did not necessarily reflect changes in the power structure, but in the presentation of the power structure.”
“It is a spectacle for certain people. The delegates applauding Kim Jong Un sends a message that it is a milestone consecrating major policy moves,” he said. “The scale of it matters.”
China model – China risks
Party congresses are a feature of post-Mao China and post-Stalin Russia.
“The example for Kim Jong Un is China,” said Lankov. “Though the rituals he is copying from China were essentially created by the Russians.” Key outcomes were economic.
“The final culmination of party congresses were largely or exclusively about confirming a new five-year plan,” he said. “The Chinese took this tradition from Russia, and the North Koreans are taking it from China.”
Lankov believes that China’s party-run, state-directed capitalism is a desirable example for North Korea. “China is doing well, it is an attractive model,” he said.
But China has gone far further in applying capitalist systems and engaging with the global economy than has isolated, introspective North Korea.
“In terms of market economics, allocation of resources of capital and labor, North Korea has not reached that level,” Go said. “It is still affected by the pull of gravity.”
Gravity could result in a hard landing. Dialing back market forces will make it harder for Kim to satisfy his core elite, who have been enriched by the moderate growth North Korea has managed.
Expansion of trade and market economics “helped North Korea get more money to finance consumption, but the downside risk was that Kim Jong Un was raising the expectations of the North Korean people, especially the elite,” Go said.
“To remain popular he had to keep expanding the economy and eventually it hit a wall. If he engages full marketization, there is a lot of political risk.”