North Korea may choose to follow Vietnam’s economic model

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North Korean leader Kim Jong Un visits a farm in Samjiyon County in this undated photo released by North Korea’s Central Korean News Agency.

KCNA | Reuters

While North Korea signals its willingness to open up its highly centralized socialist economy, Vietnam’s development model is widely suggested as a model for Pyongyang to follow.

Hanoi’s ability to maintain one-party rule, strict censorship, minimal dissent, and a top-down system of control after integrating into the global economy is an attractive prospect for North Korea, analysts say. If Pyongyang were ever to transition to a market economy, it would likely continue to prioritize regime stability – easing restrictions in areas such as currency and migration could be politically destabilizing for Kim Jong Un’s regime. .

To learn lessons from its own future, North Korea has long studied communist governments such as China and Vietnam, state-run growth countries that have integrated into the global economy. As Hanoi prepares to host the second Korean-American summit in late February, experts believe Kim may be more inclined towards Vietnamese liberalization.

Vietnamese Foreign Minister Pham Binh Minh visited Pyongyang on Tuesday after North Korean Foreign Minister Ri Yong Ho visited Hanoi last year. The trip would have been intended to study Vietnam’s reforms, according to the Yonhap news agency. Such visits date back to earlier years such as 2012, when a North Korean delegation visited the Vietnamese province of Thai Binh to examine rural development.

As recently as last month, Vietnamese parliament speaker Nguyen Thi Kim Ngan said her country was “willing to share an economic solution and know-how with North Korea,” South Korean newspaper Maeil reported. Business at the time. Washington is supportive of the idea – US Secretary of State Mike Pompeo said last July that Kim could enjoy a Vietnam-like economic miracle if he so chooses.

Compare the similarities

In many ways, modern North Korea is equivalent to 1980s Vietnam, experts say. On the one hand, the Communist Party of Vietnam has ruled the state since its independence in 1945, just as the Workers’ Party of Korea has always ruled North Korea.

The two countries “were both under United Nations sanctions, in the case of North Korea, for developing nuclear weapons, and in the case of Vietnam, for occupying a foreign country,” the Lowy Institute said, an Australian think tank, in a recent release. Remark.

Vietnam’s invasion of Cambodia in 1978 isolated it from the world, preventing Hanoi from accessing international financial support for nearly a decade. Likewise, Pyongyang has long been considered a pariah state due to its clandestine weapons program.

North Korea ready to experiment with reforms under Kim Jong Un

Bradley babson

Korean Economic Institute of America

Perhaps the biggest parallel is Pyongyang’s desire to reform its economy, much like Hanoi decades ago, according to the Lowy Institute note.

In the late 1980s, Vietnam ended its occupation of Cambodia and adopted free market reforms known as “do moi”. This ultimately opened up the country and resulted in its current socialist oriented economy. Vietnam’s border market is now one of the fastest growing economies in the world, thanks to a growing middle class, a strong manufacturing sector and a young population.

Kim, meanwhile, has vowed to improve national development since coming to power in late 2011.

“North Korea has been willing to experiment with reforms under Kim Jong Un,” said Bradley Babson, who serves on the Korea Economic Institute of America’s advisory board, in a note posted on 38North. The DPRK is short for Democratic People’s Republic of Korea, the official title of North.

In 2014, Kim also introduced measures to reduce the size of farms and allow some production for home use and sale in markets, said Babson, former chairman of the DPRK Economic Forum at the Korean American Institute. now closed from Johns Hopkins University. “Since 2016, these reforms have been extended and a greater emphasis has been placed on more decentralized decision-making,” he said.

Since last year, Kim has also embarked on a peace offensive to improve relations with the international community, as evidenced by his historic meetings with the presidents of South Korea and the United States.

The call of Vietnam

The gradual path to the Southeast Asian nation’s development is inherently appealing to Kim, Fitch Solutions said in a January report.

Vietnam began receiving aid from the International Monetary Fund and the World Bank in the 1990s after it began to enact reforms. This was followed by significant foreign investment in the mid-2000s and joining the World Trade Organization in 2007. Kim is a follower of small-scale reforms and would prefer this slow approach to economic rewards if it ensures the economy. political stability, Fitch said.

Vietnam has also maintained “geopolitical flexibility and relationship building” – two qualities which “are likely to be admired” by Pyongyang, Fitch added. For example, Hanoi maintains close ties with Washington despite marked ideological differences and decades of hostility during the Vietnam War. The Asian nation has also managed to forge ties with many countries, including Korea, Russia, Japan, and India.

Given their respective insistence on political stability, China and Singapore have also been presented as potential models for Pyongyang, but both “have their drawbacks in the eyes of North Korean leader Kim Jong Un,” Fitch said. Pyongyang wishes to emphasize its independence from Beijing, rather than its subordination, while Singapore’s path may be inappropriate due to its small size, Fitch continued.

Of course, any North Korean attempt at liberalization will depend on the progress of the current nuclear negotiations. If Kim keeps his pledge to denuclearize, the sanctions could be lifted, clearing the way for Pyongyang to resume foreign trade.

The lifting of sanctions, coupled with economic reforms and changes in national security policy and international relations, “could help put the North Korean economy on a path of stable growth and economic integration “Babson said.


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