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Analysis: Will NKorea Seek Reform

By Jong-Heon Lee, UPI Correspondent
Seoul (UPI) Jan 19, 2006
Will North Korea follow in China's footsteps by gradually introducing market forces into its shattered command economy?

This is the question of the moment after North Korean leader Kim Jong Il paid a nine-day trip to China's southern commercial cities in an apparent bid to study the thriving market-opening economic programs.

South Korean officials and analysts expressed hope Kim's China tour would be followed by fresh steps toward openness and reform, as North Korea has done in the past after the leader's study tours of China.

But North Korea's attempts at reform can hardly bear fruit without resolving Pyongyang's nuclear weapons drive and the alleged illicit financial activities such as counterfeiting, money-laundering and drug-dealing.

North Korea's state media confirmed Kim's trip to China from Jan. 10 to 18 at the invitation of President Hu Jintao. His visit was focused on China's booming cities of Guangzhou, Shenzhen, Wuhan and Zhuhai before summit talks with Hu in Beijing.

Kim spent five days in China's southern special economic districts just across the border from Hong Kong, inspecting a giant dam and technology centers, indicating his interest in the Chinese model of market economy.

In the summit with Hu, Kim said he was "deeply moved" by China's economic achievement, according to the North's official Korean Central News Agency.

"Rapid development in southern China left a deep and indelible impression on us," Kim was quoting as saying to Hu. "In a word, we are confident through our tour of southern China that the future of China is bright due to the correct policy of the Chinese Communist Party," he said.

The North's confirmation of the visit came only after Kim safely returned home. The trip marked his fourth since his first trip to China in May 2000.

The South Korean government welcomed Kim's study tour of China and the summit with Hu as providing a good momentum toward a peaceful resolution of the North's nuclear issue.

"We hope (Kim's) China trip will help North Korea's economic development and peace and stability on the Korean peninsula," the Foreign Ministry said in a statement.

"There have always been important changes in the North's economic policies following Kim Jong Il's visit to China," Vice Unification Minister Rhee Bong-jo said Thursday.

Rhee cited Kim's previous visits to China, after which North Korea called for changes in the country's economic system.

After his visit in May 2000, Kim called for "a great leap forward with a single stroke," stressing the importance of developing the country's information technology, according to the Unification Ministry. Months after the visit, North Korea agreed to develop its border city into an industrial city jointly with a South Korean conglomerate.

The so-called "July 1 economic management improvement measures" highlighted by phasing out a decades-old food rationing system and introduction of some market elements came after Kim's visit to China in January 2001.

Under the reform package, North Korea also allowed prices and exchange rates to float and permit individuals and corporations to run for-profit operations in the country.

"After his visit to China in January 2001, he called for a new way of thinking while undertaking a series of economic reform measures," Rhee said.

"We cannot be sure what kind of changes this visit will bring within the North, but we believe this might increase the North Korean leader's interest in special economic zones, because most of the places he toured (in China) were economic districts," he said.

"There is a need to closely watch what kind of policy changes will be made in relation to the economic zones," Rhee said.

Four of five North Korean officials who accompanied Kim on his China trip were economic technocrats, such as Premier Pak Pong Ju, in charge of the country's economic affairs, Party Pak Nam Gi, a senior budget official, Ri Kwang Ho, a senior science-technology official, and Deputy Premier Lo Du Chol. The remaining official was First Vice Foreign Minister Kang Sok Ju, who struck a landmark nuclear deal in 1994 with the United States.

"Kim's visit this time seemed aimed at seeking further steps toward reform and opening," said Suh Dong-man, a North Korea expert at Sangji University. North Korea wants to expand economic cooperation with China and learn a lesson from is economic model, he said.

But prospects are not bright, as North Korea is under international pressure over its nuclear weapons drive, human rights abuses and illicit financial activities.

"I think Kim discussed ways to resolve the nuclear standoff and financial issue and possible proposals to the United States," Suh said.

North Korea is also suffering from negative fallouts from the 2001 experimental capitalistic reforms, such as tremendous inflation mainly caused by short supplies of goods.

Many analysts here said North Korea would focus its economic efforts toward cooperation with South Korean and China until the nuclear standoff is resolved.

Source: United Press International

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