Economic Development on the KCNA Track

By | November 26, 2013 | No Comments

Rodong Sinmun on October 23: "For an economically strong state!" | Image: Rodong Sinmun

Rodong Sinmun on October 23: “To an economically strong state!” | Image: Rodong Sinmun

As would appear to befit the urgency and importance of economic reform in North Korea, a KCNA report last week announcing that “economic development zones” are to be established nationwide received considerable attention from the international media (here and here, for example).

According to KCNA on November 21:

The DPRK is to set up provincial economic development zones. A decree of the Presidium of the Supreme People’s Assembly of the DPRK was released Thursday. [“조선에서 도들에 경제개발구들을 내오기로 결정하였다. 이와 관련한 조선민주주의인민공화국 최고인민회의 상임위원회 정령이 21일에 발표되였다.”]

The piece went on to explain that the decree provides for economic development in newly minted development areas of North Pyongan, Jagang, North Hwanghae, Gangwon, North and South Hamkyung, and Ryanggang provinces, as well as around Nampo, to the west of Pyongyang.

However, parts of the story ought to give pause. One cautionary element is that international media coverage of the zones has outstripped that of domestic North Korean media. Although a minor October 23 article mentioning the planned new economic development zones was published in Rodong Sinmun, neither the KCNA piece outlining their official establishment nor the text of the Supreme People’s Assembly decree upon which it was based followed suit.

Maybe this indicates that the Workers’ Party does not wish to be associated with the zones until they succeed, whereupon they’ll immediately fall subordinate to the propaganda narrative of Kimist prescience in matters economic. Alternatively, it could reveal that the Workers’ Party does not support the development zone policy at all, and that there is policy conflict between factions rooted in the Party, military, and cabinet[1]. Alternatively, it might show that the regime is not committed to the development zones at all, and sees them as little more than what Brian Myers’ forthcoming monograph on the Juche Idea calls “outer track propaganda,” meaning narrative output to which the international community is given easy access but which has little or no relation to policy on the ground[2].

Whatever the truth, and irrespective of its absence from the mainstream North Korean media, the story got the world talking (which is, of course, precisely the point). It also got South Korean conservative opinion leader Chosun Ilbo rattled. In a critical Saturday editorial, the newspaper warned that North Korea must fulfill its obligations vis-à-vis the Kaesong Industrial Complex. Not only is this a moral imperative, it declared. Rather, since southern money is critical to the success of northern economic development in all its forms, North Korea must adhere to its obligations if it has a genuine will to build the trust required to attract South Korean investment to the new development zones.

Chosun is understandably skeptical of the development zone plan: the piece points out that North Korea is a recipient of international community sanctions in almost all sectors as a result of its long-range “missile” (not “rocket”) launches (장거리 미사일 발사) and nuclear tests. In addition, and arguably even more importantly, it states:

North Korea unilaterally shut down the Kaesong Industrial Complex, confiscated the assets of invested companies, and also discarded the agreement on passage, communications, and customs (the “three tongs;”통행·통신·통관) as if it were a piece of waste paper [“합의 문서를 휴지 조각처럼 폐기”].

North Korea, it goes on to warn, is going to have to provide the international community with reasons to trust that it will not act in a similarly belligerent and economically ruinous manner going forward. The way to do this, it asserts, is to bring policy and legislation into line with “international standards” (국제 기준에 부합) and stop unilaterally breaking those contracts that it is supposed to have signed in good faith. For who would ever put their money where their mouth is if Pyongyang does not do this?

Recalling the way China first had to attract less risk averse capital from overseas Chinese in Hong Kong and Southeast Asia before it became able to attract larger amounts of international investment from less emotionally vested locales, the editorial points out that if North Korea sincerely wishes to attract investment and thus develop its national economy (the use of “원한다면” implies that the Chosun Ilbo is skeptical that North Korea sincerely wishes anything of the sort) then it will need to convince South Korean investors that its economic development zones are places worthy of investing in, for only then will investment from third country firms follow. Accordingly, South Korea is, in essence, the canary in North Korea’s economic mine. Chosun Ilbo does not think the canary will survive.

Therefore, it concludes, “Adhering to the agreement on the Kaesong Industrial Complex is North Korea’s first step toward building the trust of the international community.”

Source: “[Editorial] North Korea must keep promises on Kaesong prior to economic development zones [사설] 北, 경제특구 개발 앞서 개성공단 약속부터 지켜야, Chosun Ilbo, November 23, 2013.

Economic Development on the KCNA Track” is part of a project documenting the cultural and political strategies used by the DPRK government to promote its policy agenda and create strategic discord abroad. This research is supported by an Academy of Korean Studies Grant (AKS-2013- R-11).

[1] This is otherwise known as the (largely discredited) “Inside the Red Box” hypothesis.

[2] Actually, in Myers’ classification Rodong Sinmun is “outer and inner track,” because it is accessible in both North Korea and third countries, whereas KCNA is “outer track.”

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  1. Very informative…

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