Kim Jong-un’s mid-July shake-up of his military top brass occasioned a spate of media speculation about a transformation in North Korea. Yet Kim’s abrupt move only showed he was firmly enough in charge to fire the general whom his father had promoted to chief of staff. From what little we know about North Korea, it did not portend dramatic economic reform.
Potentially more significant, a widely anticipated third nuclear test by the North has not taken place. Preparations for such a test were under way when Kim’s father died. Kim’s restraint may signal that he wants to reengage with the United States, Japan and South Korea. That in turn could foster the more tranquil external environment he needs to turn his full attention to improving his economy.
Kim’s speeches have hinted at economic change afoot, but those hints are inconclusive. If he implements plans to experiment with expanded private farming and allows farmers to keep more of the proceeds, it could ease chronic food shortages in the North. And tinkering with greater autonomy for industrial managers could improve resource allocation in notoriously inefficient sectors.
Yet no substantial change of course in North Korea is likely without a more conducive international climate, which would allow Kim to reallocate industrial production from military to civilian use, open the way to investment from outside and reduce his growing dependence on China.
North Korea has gone down this road before, Kim knows. When his father embarked on economic reform in 2002, he reached out to South Korea and Japan, only to be stymied by U.S. efforts to impede the allies’ engagement. That history makes Kim unlikely to risk reform without clear evidence of rapprochement with all three countries. If so, he will have to curb his nuclear and missile programs.