Sat, 16 Jan 2021

Facing Economic Woes, North Korea Admits Failure, Mulls Future

Voice of America
06 Jan 2021, 18:05 GMT+10

North Korea has opened a major, multi-day political gathering in the capital, Pyongyang, with leader Kim Jong Un using the forum to acknowledge recent economic failures.

Addressing thousands of tightly packed delegates at an auditorium in Pyongyang, Kim admitted his country had not reached the goals set out in an economic plan for the five-year period that just expired.

"The goals we set were immensely underachieved in almost all areas," Kim said in an opening speech at the eighth congress of the ruling Workers' Party, according to state media.

The last five years, Kim said, were "unprecedented" and "the worst of the worst" for North Korea. In response, he said the country should "strengthen our own power and our own self-reliant capacity."

Pictures posted by the official Korean Central News Agency showed thousands of participants seated close together in a large hall, with no observable social distancing measures. No one appeared to be wearing masks.

It is only the second time Kim has convened a party congress since he took power in December 2011. This year's gathering, which is expected to set North Korea's policy goals for the next five years, comes at one of the most challenging times of Kim's rule.

Economic problems

North Korea's economy had already been held back by international sanctions over its nuclear program, but a series of devastating recent floods as well as strict coronavirus measures dramatically worsened the situation.

Overall, North Korea's economy may have contracted by at least 8.5% in 2020, according to an estimate by Fitch Solutions.

One big reason: North Korea closed its border with China, its biggest trading partner and economic lifeline, last January, shortly after news of the coronavirus emerged. That helped lead to an 80% drop in trade between the two countries, according to the Korea International Trade Association.

A health worker sprays disinfectant inside the Pyongyang Department Store No. 1 prior to opening for business, in Pyongyang on... A health worker sprays disinfectant inside the Pyongyang Department Store No. 1 prior to opening for business, in Pyongyang on Dec. 28, 2020.

Supply shortages

NK News, a Seoul-based website focusing on North Korea, on Tuesday reported "significant and ongoing food shortages" in Pyongyang, especially at grocery stores frequented by the country's elite.

Key items such as sugar, cooking oil, and toothpaste "are almost completely gone" from some supermarket shelves in Pyongyang, NK News reported. Local fresh fruit and vegetables were being sold at over five times the usual cost, it added.

Despite strict coronavirus restrictions, North Korea insists not a single person in its country has tested positive for the coronavirus - a claim widely disputed by global health experts and others.

North Korea is especially vulnerable to a disease outbreak. It is one of the world's poorest countries and its medical infrastructure is badly outdated and under-resourced.

According to a Wall Street Journal report, North Korea has submitted an application to receive Covid-19 virus vaccines from Gavi, an international alliance of governments, drug companies, charities and civic organizations that arrange global vaccination campaigns in lower income countries.

North Korean leaders have called the pandemic response a top priority and a matter of "national survival." Given that dynamic, it is not clear what North Korea can do to stimulate its economy, at least until the virus threat recedes and border restrictions are loosened, many analysts say.

"It's not like Kim Jong Un is going to come out and promise denuclearization, marketization, and human rights improvements," says Leif-Eric Easley, a professor at Ewha University in Seoul.

"What optimists are looking for is a willingness to engage in diplomacy with the incoming Biden administration, mention of economic development opportunities including with South Korea, and any openness to humanitarian cooperation during the pandemic," Easley said.

"Pessimists expect the Kim regime will emphasize military strength, self-reliant socialism, and an ongoing crackdown on subversive elements," he added.

Admitting failure?

It would not be the first time for Kim to admit policy failures, especially on the economy.

In August, the Central Committee of the Workers' Party acknowledged plans to improve the economy have been "seriously delayed" by "severe internal and external situations."

In recent years, Kim has attempted to convey a more modest "man of the people" persona than that of his father, former North Korean leader Kim Jong Il.

Lim Eul-chul with Seoul's Institute of Far Eastern Studies of Kyungnam University questions whether Kim actually admitted failure on Tuesday. But he says Kim's comments were still unusual in a North Korean context, where top leaders are expected to be highly revered.

"It is not quite right to say that he admitted failure," Lim said. "He acknowledged that the results were not sufficient following the seventh congress, which is still not very common considering North Korea's usual behavior.

Foreign policy direction

The party congress, which comes two weeks ahead of the inauguration of U.S. President-elect Joe Biden, is also being watched for signs about North Korea's foreign policy.

North Korea has for months boycotted nuclear talks, frustrated at the U.S. refusal to relax sanctions. U.S. President Donald Trump met Kim three times during his presidency, but the meetings did not lead to North Korea giving up its nuclear weapons program.

Biden has said he won't rule out meeting Kim face-to-face, but has suggested that would only come as part of broader, working-level negotiations.

On Tuesday, the top U.S. general in South Korea said Pyongyang does not appear to be preparing a major provocation around the onset of the Biden administration.

"We're not seeing any indicators that suggest that there would be a major provocation - but that's today. That could change next week," General Robert Abrams, the commander of U.S. Forces Korea, told an online forum.

Next steps

North Korea has often timed major tests, including of ballistic missiles or nuclear weapons, around U.S. presidential transitions to demonstrate its military capabilities and possibly gain leverage in future negotiations with Washington.

Kim said a year ago he no longer feels bound by his self-imposed pause on nuclear and long-range missile tests, raising fears of a return to major tensions on the Korean peninsula.

In October, North Korea used a military parade to unveil a massive new intercontinental ballistic missile, which appears designed to overwhelm U.S. missile defenses. Some suspect Pyongyang may test the missile or other weapons systems in the coming months.

Many in South Korea are also watching to see if the party congress will provide any hints about future inter-Korean cooperation.

North Korea last year unilaterally raised tensions with the South, a bitter disappointment for many in Seoul. South Korean President Moon Jae-in, whose five-year presidential term ends in May 2022, has placed a high priority on improving inter-Korean ties.

During his opening speech Tuesday, Kim did not mention the United States, South Korea, or nuclear issues. The event is expected to last for multiple days.

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