Nuclear Power and Economic Reform in the Age of Kim Jong-un

On April 28, North Korea failed to launch two intermediate-range ballistic missiles as reported by South Korean defense officers. This is Pyongyang’s third failed attempt in the past weeks, deploying the powerful Musudan missiles despite the recent sanctions imposed by the U.N and the unilateral condemnation of further provocations by the international community.

In addition, the annual U.S.-South Korean military exercise—condemned by Pyongyang as a preparation for an upcoming invasion—has heightened the level of the tension in the peninsula. The news of the recent launch is not a surprise after the DPRK staged a submarine-launched ballistic test on April 23 that represented an important success for the regime, now able to hit targets in Seoul and U.S.’ bases in Guam as reported by the state-run KCNA news agency.

Despite the increasing pressure of China and the United States to abandon its nuclear weapons efforts and provocations, Kim Jong-un’s regime remains focused on achieving nuclear power status.

After Seoul’s decision to shut down Kaesong complex in response to the North Korea nuclear test of January and the satellite launch on February, Pyongyang military provocations coming are reaching a dangerous point. North Korea’s threat of a pre-emptive nuclear strike against the U.S. and the South has been strongly condemned by Russia, stressing that this inflammatory behavior could create a legal basis for a military intervention against the DPRK.

Although provocative statements of this nature are not new, the perception is that Pyongyang’s threat to South Korea has become an urgent issue that needs to be addressed with the utmost assertiveness. Indeed, Korean Defense officers have reported that North Korea has built a replica of the Blue House—the executive office and official residence of the South Korean head of state—entirely designed for forces to launch an assault and use in shelling exercises. In April, Pyongyang has repeatedly demanded the return of 13 defectors, threatening to target President Park’s residence.

It is evident that those drills are intended to intimidate Seoul but at the same time, they are used to galvanize support for Kim Jong-un’s regime in the upcoming Korean Workers’ Party (KWP) Congress. Pyongyang is perfectly aware that an attack against the South Korea would cause massive retaliations (although the Kims are behind a series of attacks against Park’s family, including an assassination plot against President Park Chung-Hee in January 1968, carried out by Unit 124, an elite infiltrator commando that breached the Blue House grounds before being neutralized by the Palace security).

As already, discussed in a previous analysis, Pyongyang’s heightened level of aggressiveness, coupled with an extraordinary mix of militarism and restless pursuit of the nuclear power ambitions is designed to strenghten Kim Jong-un’s leadership legitimacy.

Long Live Comrade Kim!

In the last few weeks, North Korea has increased the number of tests in order to reinvigorate Kim Jong-un’s image as a military leader prior to the KWP Congress on May 6. This rare and important gathering is expected to define major political, economic and military policies and it is often saluted by an increase of the level of provocations and missile tests. While thousands of delegates convene in Pyongyang, the level of the security will be strengthened with a large mobilization of the armed forces in the capital and the Chinese border will be closed.

The last Congress was held in 1980 and featured the formal appointment of Kim Jong-Il as the successor of the Great Leader. Given the pivotal importance of these events, there are high expectations for the resulting policy decisions combined with fears of a fifth nuclear test planned to salute Kim Jong-un’s power.

Although he was appointed to the highest positions, including the powerful National Defense Commission (NDC), during the first years of his leadership, the process of power transition in the DPRK is protracted and Kim Jong-un hold on power relies on his ability to establish and maintain a solid support base.

While the DPRK’s monolithic leadership system is characterized by the centrality of the “Ten Principles of the Establishment of the One-Ideology System” last revised in 1974, the succession system is not an institutionalized process but rather it is based on the direct appointment of the Great Leader by a core elite circle.

Therefore, the power transition is often characterized by purges of those able to jeopardize the new regime and the promotion or co-optation of elite members willing to consolidate the new leader’s power. While other authoritarian system like China maintain institutionalized mechanisms to select the new party’s leadership, the DPRK’s hereditary leadership is at higher risk of an internal coup and the rise of potential challengers.

Since assuming the leadership of the country in 2011, Kim Jong-un has tried to impose his ruthless leadership, through a series of purges that have targeted nearly 70 senior army officers such as Ri Yong Gil and Ri Yong-Ho, but also powerful cadres belonging to the KWP’s old guard including Chong Ryong Hae, and the powerful Chang Sung-taek.

Indeed, high profile executions and personnel reshuffle have highlighted Kim Jong-un’s difficulty in establishing control over the Party and more crucial inside the army. Therefore securing the loyalty of the high-ranking members depends on Kim Jong-un’s ability to uphold Songun ideology, or “military first.”

Inside the 7th Congress: Cementing the Power Base and Unveiling Reforms

Understanding these internal dynamics is critical to understanding the reason behind announcing the 7th Congress of the Workers’ Party of Korea after more than three decades. The Congress represents a formidable opportunity for Kim Jong-un to reshape the composition of the Party and KWP institutions with a new generation of trusted cadres on the Central Committee and inside the Politburo of the KWP. It will also be the occasion to unveil his own personal political and ideological guidelines.

Since Kim Jong-il, the Central Military Commission and other military bodies such as the NDC, have consolidated their role as preferential decision-making institutions, prevailing over traditional party organs that play a predominant role within the political structure of Marxist-Leninist-inspired systems.

Unveiling a new vision based on the fostering of military power at expenses of the Party allowed Kim Jong-il to consolidate his power after his father’s death in 1994, overcome internal issues such a severe famine, the economic hardship and the collapse of the Public Distribution System, or an external problems such as the collapse of the Soviet Union.

Under the young leadership of Kim Jong-un, expanding the nuclear program while inaugurating a new path toward economic development has become his ideological mark, called Byungjin. This vision is expected to represent the founding pillar of his regime, fostering new economic policies after decades of solely prioritizing the armed forces.

Indeed, there has been a lot of discussion about a new strategy to boost economic development—one of the main issues to be addressed during the Congress. In previous years, limited economic reforms, based on decentralization and partial privatization of the obsolete state-owned enterprises (SOEs), have put in question the very essence of the DPRK’s planned economy.

While still adhering to the self-reliance principles enshrined in the Juche ideology, in 2014 Pyongyang unveiled a new comprehensive package of reforms called “May 30th Measures,” allowing SOEs to pursue profit, as well as have management more involved in hiring personnel, acquiring raw materials and determine production targets. This was an attempt to legalize and control the trade in basic commodities, thus reducing corrupt cadres’ predatory behavior and the unofficial trade of resources between SOEs and the misallocation of workplace equipment.

Although the Party still owns the means of production and maintains a marked influence on macroeconomic decisions, the acceptance of the commercial principles and the abandon of Soviet-style economic planning has represented a pivotal momentum in the establishment of a dual system.

Indeed, there is a lot of expectation around more amble economic reforms to be unveiled during the Congress, emulating the path pursued by China at the end of the 1970s. However, reformers inside the elite are already facing an uphill battle to implement the superficial 2012 and 2014 economic reforms.

As shown in the past, reforms in the DPRK is not a linear process— relying on different factors such as the ability of the elites to isolate hardliners, the consolidation of a strong power base, and the fear of weakening the Party’s political and ideological.

In addition, external factors, such as the heightened level of tensions with neighboring countries are a valuable barometer for the leadership’s control of the elites, as well as its need to rely on militaristic signals to galvanize the unity of the Party.

Nonetheless, the economic reform undertaken under Kim Jong-un is likely to continue, Nevertheless, a sudden shift in strategic regional calculations could produce significant slowdowns or even a reversal, encouraging the rise of a more conservative and militant elite within the party institutions.