Why North Korea Will Muddle Through
Article Summary and Author Biography
Things may look bad, but North Korea can stagger on for a long time before it collapses. The famine there, limited information seems to reveal, is due not to shortages of food but to political decisions in Pyongyang. But unification would be so costly for South Korea - about $1 trillion over 10-25 years - and a mass southward exodus so debilitating that the South will instead try to prop up the North. China will provide food, and the United States fuel, while the North muddles through with a form of apparatchik capitalism similar to Romania's, in which officials channel resources to favored groups.
Marcus Noland is a Senior Fellow at the Institute for International Economics.
APPARATCHIK CAPITALISM
After consulting with their superiors, the guards at Rajin harbor allowed us to exit. Apparently two Americans on a morning jog were not thought to pose a grave threat to national security. As we ran up the hill overlooking the harbor, I noticed a small military installation. On our way down I watched two soldiers stealthily working their way through the dilapidated structures, eventually reaching an isolated corner of the base, far from their comrades. Like two characters from a B movie, the soldiers looked left and right before kneeling. One removed his knapsack and placed it between them in the dirt. He opened it and withdrew two . . .
Bananas. At that moment his colleague glanced upward and spied us on the ridge above. The soldiers leaped to their feet and turned their bodies to shield the bananas from our view. The presumably banana-laden knapsack was stashed at the base of a wall, and, checking that they otherwise had not been observed, the soldiers headed back toward the center of the base.
One can easily conjure up myriad interpretations of a surreptitious trade in bananas at an isolated North Korean military installation in the autumn of 1996. But any consideration of the state of the North Korean economy presents policymakers with two fundamental problems. First, there is an acute lack of information, a vast gulf between fragmentary anecdotal evidence on the one hand and highly uncertain estimates of economic aggregates on the other. Second, there is really no reliable theory linking economic distress or deprivation to political change. Even a reasonably persuasive analysis of the economy does not necessarily provide much guidance for political decision-making, much less for assessing the stability of the regime.
The North Korean economy is in bad shape, and a famine of unknown magnitude is under way in parts of the country, but it appears that minimum survival requirements can be maintained with little or no external support. Kim Jong Il's regime appears to have been largely successful in fusing juche (self-reliance) ideology to Korean nationalism, and unlike the countries of Central Europe, North Korea has no institutions capable of channeling mass discontent into effective political action...
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