North Korea’s Leader Had Big Economic Plans. He Admits They’ve Failed. – The New York Times

Posted on August 20, 2020

Kim Jong-un’s blunt assessment led his country to plan a rare Workers’ Party congress for January to chart a new course after the country was hammered by sanctions, floods and the pandemic.

A photograph released by the North Korean state news media showing the country’s leader, Kim Jong-un, at a meeting of the Central Committee of the Workers’ Party in Pyongyang on Wednesday.Credit…Korean Central News Agency, via Agence France-Presse — Getty Images

Published Aug. 19, 2020Updated Aug. 20, 2020, 4:56 a.m. ET

SEOUL, South Korea — Back in 2016, North Korea’s freshly minted leader, Kim Jong-un, held the country’s first ruling Workers’ Party’s congress in three decades and laid out an ambitious five-year economic plan to build what he called a “great socialist country” by 2020.

On Thursday, he admitted that the plan had failed.

One calamity after another has hit North Korea since 2016. Led by the United States, the United Nations Security Council imposed devastating economic sanctions to retaliate against the North for its pursuit of nuclear weapons and long-range ballistic missiles. Then came the global coronavirus pandemic, followed by massive flood damage because of torrential rain.

Mr. Kim now plans to chart a new course.

North Korea on Thursday announced plans to hold a rare Workers’ Party congress in January to work on a new plan to shore up its economy. Mr. Kim’s blunt admission of policy shortcomings during a formal party meeting was an indication of how much the North Korean economy had been hammered by the triple crises.

Plans to improve the national economy has been “seriously delayed” by “severe internal and external situations and unexpected manifold challenges,” the Central Committee of the Workers’ Party concluded during the meeting in Pyongyang, the capital, the North’s official Korean Central News Agency reported on Thursday.

People’s living standard had also “not been improved remarkably,” the committee said.

Commuters being disinfected in Pyongyang this month.Credit…Jon Chol Jin/Associated Press

It remains rare in North Korea, if not unprecedented, under Mr. Kim’s rule to openly admit to such failures.

Mr. Kim’s father, Kim Jong-il, and grandfather Kim Il-sung, who had ruled before him like infallible, godlike figures, never did. In North Korea, it had been a capital crime to criticize the policies of the dynastic Kim regime that has led North Korea since its founding in the 1940s.

But since he came to power, the younger Mr. Kim has broken that tradition, casting himself as a new type of leader, one who is ostensibly more forthcoming in admitting and addressing economic problems of his country. He has often criticized his state-run factories and construction projects for being unproductive as he tried to rebuild his country’s economy in defiance of international sanctions.

When he met with President Moon Jae-in of South Korea in 2018, Mr. Kim admitted his roads and railways were in “embarrassing” condition, South Korean officials said. In October, North Korea’s state news media reported that he voiced “sharp criticism” of the “dependent policies” of his predecessors when he ordered the demolition of South Korean hotels and other buildings in a resort complex that the two countries once operated together.

Mr. Kim held his major coming-out event as leader when he held the party congress in 2016, the first such meeting in 36 years. There, he adopted his ambitious five-year economic goals. The plan was for Mr. Kim to celebrate his achievement during the party’s 75th anniversary on Oct. 10 this year with pomp and spectacle.

But things have hardly transpired as Mr. Kim had hoped.

North Korea had already been struggling under the stranglehold of United Nations sanctions. Then, last week, the North Korean leader admitted that his nation was facing more challenges, “two crises at the same time”: fighting the spread of the coronavirus and coping with extensive flood damage. But he ordered his country not to accept any international aid for fear that outside help might bring in Covid-19.

In his no-nonsense assessment during the party meeting on Wednesday, Mr. Kim said his country faced “unexpected and inevitable challenges” this year. He also critiqued the “achievements and shortcomings” of his own government, state news media reported.

When Mr. Kim took power after the death in 2011 of his father and predecessor, he vowed to ensure that his people, long suffering from multiple maladies, would “never have to tighten their belt again.” In 2016, when he adopted his economic plan, the North’s economy grew 3.9 percent, the highest since a devastating famine hit the country in the late 1990s, according to the estimates by the South’s central Bank of Korea.

The growth was largely the result of ramped-up exports of coal, iron ore, textiles and fisheries to China. But the United Nations Security Council banned such exports after the North rapidly expanded its weapons programs, testing three intercontinental ballistic missiles in 2017, as well as what it said was a hydrogen bomb.

As the sanctions tightened, the North’s economy shrank by 3.5 percent in 2017, according to the Bank of Korea. It contracted by 4.1 percent the following year, with its exports to China plummeting 86 percent.

North Korea’s economy recovered slightly last year, growing 0.4 percent, as Pyongyang invented ways of easing the pain of the sanctions, such as smuggling banned cargo across the Chinese border at night or between ships on the high seas. It also exported practically anything not banned by the sanctions: cheap watches assembled with Chinese components, artificial eyelashes, wigs, mannequins and soccer balls.

But this year, the coronavirus forced the country to shut down the border with China, which had accounted for more than 90 percent of the North’s external trade. North Korea’s exports to China plummeted to $27 million in the first half of this year, a 75 percent drop from a year ago, according to the Korea Institute for National Unification in Seoul. Imports from China dropped 67 percent to $380 million.

Fitch Solutions, which had predicted a 3.7 percent growth for the North Korean economy this year before the Covid-19 pandemic hit the global economy, now forecasts a record 8.5 percent contraction for the North.

Disinfecting a freight train in Sinuiju, North Korea, on the Chinese border, in a photo released in March by the North Korean state news media.Credit…Korean Central News Agency, via Agence France-Presse — Getty Images

As the North’s economic woes deepened, Mr. Kim begun delegating some of his governing work to his deputies, including to his only sister, Kim Yo-jong, the South’s National Intelligence Service said on Thursday. She has increased her voice in the North’s relations with South Korea and the United States.

“After nine years in power, Kim Jong-un wants to lessen the stress of governing,” Ha Tae-keung, a South Korean lawmaker affiliated with the conservative opposition Future United Party, said while briefing reporters on a closed-door parliamentary hearing from top intelligence officials. “Another reason is that he wants to spread the blame and lesson his political risk should policies go wrong.”

But Mr. Ha said that Mr. Kim’s delegation of power did not lesson his absolute authority or mean that Ms. Kim had been chosen as his successor. When Mr. Kim stayed out of sight earlier this year, sparking rumors that he was incapacitated, Ms. Kim was cited by outside analysts as the primary candidate to succeed her brother in the dynastic regime.

After he failed to persuade President Trump to lift sanctions during their meeting in Vietnam in February last year, Mr. Kim said his government would slog through the sanctions. In his New Year’s message this year, Mr. Kim asked his people to prepare to “tighten our belts” again.

So far, he has shown no sign of backing down on his nuclear weapons program. He vowed to boost his nuclear weapons program further, threatening to end his moratorium on nuclear and long-range missile tests.

In another aggressive move, North Korea in June blew up an inter-Korean liaison office — the symbol of warm ties between Mr. Kim and President Moon Jae-in of South Korea — after blaming the South for failing to increase inter-Korean economic exchanges.

Mr. Moon’s new national security adviser, Suh Hoon, planned to meet Yang Jiechi, a member of Beijing’s Communist Party Politburo, when the Chinese official visits the southern South Korean city of Busan on Friday and Saturday. The two officials were expected to discuss North Korea and a potential trip to Seoul by China’s top leader, Xi Jinping, Mr. Moon’s office said.