North Korea has experienced slowly expanding spheres of capitalism for 20 years, including the recent decentralization of farming decisions down to the family level. This incongruous but enduring development has aroused hopes in South Korea that the North’s economy will somehow develop enough to mitigate the eventual unification costs for Seoul. The Hyundai Economic Research Institute published in 2014 a forecast that had the North growing at 7 percent a year for 10 years. Also, the Foreign Economic Policy Research Institute of Seoul National University reported that if the North were to adopt either the Chinese or Vietnamese model of reform it would raise the annual growth rate to 6-7 percent.
However, Pyongyang has merely flirted with capitalism, hoping the famed “animal spirits” will help animate a sick economy and perpetuate the Kim dynasty. Having inherited capitalism along with communism of the Juche type, Kim Jong-un has been doing his best to maximize the benefits of the former, but only within the confines of the latter.
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