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After Years of Dim Prospects, New Possibilities for N. Korean Economy

by June 8, 2018 Health

BEIJING North Korean leader Kim Jong Un has been signaling his desire to open up the reclusive state’s economy, ushering in what some analysts believe could be a “reform and opening up era” similar to what happened in China four decades ago. But how far North Korea is willing to go and what concrete measures it is willing to or could take remain unclear, especially with sanctions still firmly in place.

Next week’s Singapore summit between Kim and U.S. President Donald Trump is expected to shed light on what steps Pyongyang is prepared to take toward denuclearization and that, in turn, could pave the way for a possible boom in economic activity after sanctions are removed.

Though many hurdles and much uncertainty remain, the glimmer of opportunity for business options in North Korea is an improvement, said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics.

“Given how hermetically closed North Korea has been for decades, any uncertainty about the future and any potential opening up is actually an improvement on the status quo for foreign businesses,” Kirkegaard said in an emailed response to VOA.

Adapting to change

Analysts said that as North Korea looks to transform its centrally planned economy, it will adopt some measures from China and other countries, but will never admit that it is doing so.

“North Korea won’t adopt a China, Vietnam or Cuba model,” Lu said. “In the beginning, [North Korea] is likely to create development zones where special economic policies can be put into place.”

Lu said that such zones would have some similarities to those in China, but would be completely cut off from the broader economy and public � fenced in by barbed war.

Starting in 2013, Kim Jong Un began stepping up efforts to open more than a dozen special economic zones, but international sanctions have seriously slowed the development of those projects, analysts said.

North Korea has cautiously approached such changes in the past and that is not likely to change going forward. Jia Qingguo said Kim will need to do more than create a narrative to explain why the country is shifting its focus toward economic development.

“As he tries to open up North Korea’s economy, he will also need to pay attention to political stability and make adjustments to the country’s system [of governance],”Jia said. “Whether he can do that or not is uncertain.”

Source: Voice of America