A short-sighted reign of terror

Kim Jong-un’s political style is different from that of his father. Compared to Kim Jong-il, he is more aggressive and impulsive. The execution of his uncle, Jang Song-thaek, and the recent purge and execution of Defense Chief Hyon Yong-chol suggest that he uses fear as a tool.

Where does North Korea’s version of the reign of terror begin and end? Kim knows the essence of power, and the reign of terror is not a reflection of his personality. It is actually a more calculated political move.

The most crucial issue the North Korean regime is faced with is the decrease in resources needed to maintain Kim’s power. Externally, the financial resources come from trade, foreign exchange earnings and income from dispatched workers. However, that income is decreasing as the economies of the countries, with which North Korea has relations, slump. Since 2014, anthracite exports, the biggest source of foreign currency income, has declined due to falling international prices and a decreasing demand in China.

North Korea was using an inflation tax as a major domestic revenue source, but it was eliminated in 2013. According to research by the Korea Institute for Industrial Economics and Trade, the North Korean people and companies now possess U.S. dollars or Chinese yuan, rather than North Korean won, and settle in foreign currencies due to increased foreign trade from the 2009 currency reform.

Because an inflation tax could no longer be imposed, the North Korean authorities stopped the increased issuance of the currency. As a result, the exchange rate on the black market for the dollar to the North Korean won has remained unchanged since early 2013.

Seventy percent of North Korean citizens survive through unofficial economic activities, including markets. Marketization is fundamentally changing the minds of North Korean residents. Studies on North Korean defectors, who left the North less than a year ago, show that those who engaged in market activities in North Korea are more likely to support a market economy. By contrast, having more experience in ideological education in North Korea did not equate to more support for a socialist economy. In fact, Communist party members showed a higher tendency to support a market economy.

But North Korean residents are not the only ones changing. High-level officials make money from trade and are involved in loan-sharking or apartment sales directly and indirectly. Many bureaucrats receive bribes on various pretexts. They have learned to be faithful to the man in power for political survival but condone capitalist activities to make money.

Kim is cornered and has resorted to using fear in order to maintain his power. If the current trend continues, his power is likely to shrink naturally. The core of the reign of terror is randomness and brutality. To maximize fear, he cannot allow people to predict who the next target will be. And the punishment should be severe beyond imagination. This is the face of North Korea in the Kim Jong-un era.

So how should South Korea respond? It is a short-sighted plan to induce desirable changes from a regime that chose a reign of terror with sanctions and pressure. When external pressure intensifies, a dictator elevates fear to keep power.

In the history of socialism, fear was effective in maintaining authoritarian regimes as long as tyrannical social apparatuses, such as the KGB, were operational. Joseph Stalin of the Soviet Union and Nicolae Ceausescu of Romania were able to maintain power for more than 25 years through a reign of terror. Contrary to popular belief, a reign of terror by a dictatorial regime brings stability to power in the short term.

However, the effect of keeping power through fear does not last. Kim’s reign of terror means that North Korea’s succession of power cannot continue to the fourth generation. The powerful elite who have kept a low profile during this reign will find a more predictable leader once Kim dies. Upon Stalin’s death, the brutal chief of the secret police, Lavrentiy Beria, was executed and Nikita Khrushchev, a moderate, rose to power.

In many other cases, a reign of terror was followed by serious violence and instability. According to Professor Barbara Geddes at the University of California, Los Angeles, a one-man dictatorship like North Korea is more likely to experience armed clashes during a regime change compared to other dictatorial systems. Does South Korea have the capacity to keep North Korea stable and achieve integration and unification? Can this feeble government and poor citizenry - evidenced by the Sewol ferry tragedy and the recent MERS outbreak - deal with this unprecedented task in history?

Aggressive engagement should be a consistent policy for all South Korean administrations. North Korea is bound to change in the long run, driven by internal transformation. However, pressure and sanctions alone limit the possibilities of desirable changes. Moreover, it would only push North Korea to accelerate its terror and make the path to peaceful reunification even harder. The Korean government needs insight for the future.

Translation by the Korea JoongAng Daily staff

JoongAng Ilbo, June 4, Page 31

*The author is an economics professor at Seoul National University.

by Kim Byung-yeon