Kim Jong-un’s dilemma

Kim Byung-yeon
The author is an economics professor at Seoul National University.

In a recent military parade, North Korean leader Kim Jong-un threatened the United States and South Korea with a new type of intercontinental ballistic missile (ICBM) — all the while thanking his people and promising to devote his life to the country. Kim seemed stressed and under pressure from his own people. Indeed, the leader is facing the biggest crisis of his career.

North Korea’s economy is in deep trouble. The regime’s agricultural, engineering and service sectors are all expected to register negative growth this year due to international sanctions, the coronavirus pandemic and natural disasters. The pandemic is taking a particularly serious toll on trade and market activities — the backbone of North Korea’s economy — as the country was forced to close its borders and restrict domestic travel.

In the worst-case scenario, the North’s economy could shrink 10 percent this year, which would mean the country’s per capita income would fall by nearly 20 percent by the end of 2020 compared to 2017. In other words, that’s nearly two-thirds of the economic shock caused by the Arduous March in the 1990s, the worst period since the war.

Kim conceded the economic crisis. During a plenary meeting of the ruling Workers’ Party’s Central Committee in late August, he said the “planned attainment of the goals for improving the national economy has been seriously delayed and the people’s living standard not been improved remarkably,” according to an English-language report from state-run media. Two months later, North Koreans’ living standards have sharply deteriorated. According to my analysis of a set of surveys of North Korean defectors conducted by Seoul National University’s Institute for Peace and Unification, international sanctions appear to have slashed the median of North Korea’s household income by 20 percent or more. Well-heeled households who made tidy livings from trade, foreign currency earnings and large-scale market activities have especially seen their earnings fall.

There’s always the possibility that the economic crisis could lead to a political crisis. Kim appears to be aware of this, as he made only two on-site inspections of economic activities during the first half of this year, in stark contrast to last year when he made two such visits per month on average. He’s been going on field inspections a bit more frequently from August, but only to places like typhoon-hit areas, where he’s absolutely sure he would score political points. Nowhere can we see the brash confidence he showed in previous years when he paid visits to factories, construction sites, department stores and fish farms.

Then how do North Koreans actually perceive Kim? According to the aforementioned survey, his approval rating seems to be about 50 to 60 percent on average, more or less the same as it’s always been. This signifies the regime’s stability — but at the same time, it means that despite the North’s successful development of nuclear weapons, there are limits to gaining more public support solely from them. For North Koreans, putting food on the table is far more important. Kim, however, cannot do anything about it now due to sanctions and the pandemic, which is why he’s in a dilemma.

North Korean people want capitalism. Seventy percent of the surveyed defectors said they supported capitalism over socialism while living in the North, while 90 percent said they believe it’s necessary for members of society to do business, establish companies and have freedom in hiring. More than 80 percent said they think Kim’s flawed policy choices of overspending on the military without opening and reforming the economy were the reasons for the North’s current economic crisis. No matter how fervently Pyongyang propagates the idea that its crisis is due to external factors like sanctions or natural disasters, the real problem lies with internal factors, and North Koreans are well aware that Kim is to blame, according to defectors.

By choosing nuclear weapons over the economy, Kim has voluntarily put himself in a dicey situation. Kim’s plan to achieve both goals and prop up a long-term dictatorship has been rocked by sanctions and the pandemic. The North Korean public’s awareness of reality has improved immensely compared to the Arduous March period. They want him to improve the economy — and are hoping he officially adopts capitalism. If Kim continues to fail to live up to expectations, his leadership could face a crisis.

The momentum for denuclearization is still alive, due in part to sanctions and the pandemic. As long as these two factors are with us, Kim should want to hold denuclearization talks with the United States. Our first and foremost diplomatic goal will be making sure that whoever wins the next U.S. presidential election does not lose focus on the nuclear issue.

The Moon Jae-in administration’s recent idea to sign an end-of-war declaration as a gateway to starting the denuclearization process could backfire. At a time when Washington wants to focus on Beijing, if the next U.S. administration finds it difficult to keep pace with Seoul in dealing with Pyongyang, it could entirely scratch the nuclear issue off its priorities list. If the North loses patience and carries out some sort of a provocation, there’s a chance that a military conflict may unfold on the peninsula. If Seoul fails to read the North’s intentions and cooperate with the United Sates, the entire peninsula could end up in a dicey situation.