The Eighth Congress of the Korean Workers’ Party (KWP, or simply the party) was held in the DPRK from January 5 to January 12, 2021. Such events are rare occasions during which the work of the past is officially analyzed, and strategic goals are set for the immediate and mid-term future. The last such Congress occurred in 2016, after a hiatus of 36 years since the Sixth Party Congress of 1980.
The Congress highlighted the current position of North Korea’s leadership on a number of key issues. The strategy for economic development is inward-oriented, the role of the state is to be strengthened, no new reforms are planned, and no major political purge took place. There were a few interesting parallels to South Korea’s development strategy under Park Chung-hee. Improved relations with China since 2016 were acknowledged, while the tone on relations with the US and South Korea was far less positive. North Korea will stick to its policy of military deterrence, based on the development and further modernization of its nuclear arsenal. A trend towards burden-sharing in the operative leadership of the country could be observed, and there were some implied adjustments to the official ideology.
This first of two installments summarize several key takeaways from the Party Congress. The first half featured here are more economically oriented. Whereas the remaining set, covered in the next report, will address broader political, ideological and structural changes, as well as external relations.
1) The Congress took place at an unusual time, lasted longer and had more attendants than before.
The eight days of the Eighth Congress are a substantial extension compared to the five days of the Seventh Party Congress of 2016. Back then, there were 3,467 delegates and 1,545 observers. This time, 5,000 delegates and 2,000 observers participated.
The timing of the event was somewhat unusual. For logistical reasons, it is easier to conduct such huge events during spring or autumn, when transportation and heating are less of an issue. Furthermore, since no vaccine is so far available in North Korea, the risk of a mass infection with the coronavirus has been high.
There has been speculation that a sense of urgency, due to negative economic developments in 2020, prompted the decision to hold the Congress in January. This seems unlikely, however, since the Congress had been announced in August 2020, only six months into the COVID crisis. Another possible explanation was the need to adjust the country’s strategy due to the outcome of the US presidential elections, but the timing of the announcement does not support that hypothesis either, and the published records of the Congress do not point at the US as a major topic. In any case, holding the Eighth Party Congress in 2021 roughly corresponds with the announcement back in 2016 that the next Congress would be held in five years.
It seems that Kim Jong Un’s remarks this time were far more extensive than in 2016. Then, his report in Korean was published in full, totaling about 60,000 words; this time, only a summary was published, amounting to 25,000 words. The full text reportedly took him nine hours to read. (Even the Stakhanovite “work hard campaign” that preceded the Eighth Party Congress lasted 10 days longer than the 70-day campaign leading up to the Seventh Party Congress.)
2) Self-critical remarks were scaled back.
While the Seventh Party Congress in 2016 was touted as a “congress of victors,” Kim Jong Un characterized the Eighth Party Congress as a Congress of “work, of struggle, and advancement” (일하는 대회, 투쟁하는 대회, 전진하는 대회). In his opening speech, the leader admitted that the five-year economic development plan had “fallen short in almost every category” and “bitter lessons“ were learned. But compared to previous public statements, including some of his new year addresses and his report at the Seventh Party Congress, the tone was relatively mild, and the critical and self-critical remarks were not as extensive.
The dominant narrative was more like “true, we made a few mistakes, but the main problems were external and we are on the way to a solution.” In Kim’s own words,
The Party turned the enemy’s fierce sanctions into a golden opportunity to increase self-reliance and internal power…Although the strategic goals in the field of economic construction were not reached, a valuable foundation for sustainable economic development on its own was laid.
3) State over market, politics over economy: no signs of economic reform.
According to Kim Jong Un, “the most brilliant achievement achieved in the last five years…is the extraordinarily expanded and strengthened political and ideological power” of the country (정치사상적힘). While the North Korean leader identified economic development as “the most important task,” in his concluding speech, he explicitly called upon the party to approach economic management from a strictly political perspective and not only focus on economic aspects. This signals a strategic decision and the dominance of ideology and politics over the economy. North Korea finds itself in a difficult economic situation, but there are no indications that pragmatism and market-oriented reform have been chosen as solutions.
Central guidance by the Cabinet and the State Planning Commission was emphasized several times. The Cabinet was called the “country’s economic headquarters” (나라의 경제사령부), and the “Cabinet responsibility system” (내각책임제) for the economy and the “centrality of the Cabinet” (내각중심제) were stressed. Such an emphasis by North Korean leaders on the economic technocrats in the Cabinet is typically seen by analysts as a sign of a pragmatic economic policy.
However, considering the remarks cited above, it seems that the North Korean leader currently sees the Cabinet and economic policies merely as tools of state-led development. Kim Jong Un explicitly highlighted self-reliance (자력갱생) and self-sufficiency (자급자족) as “still” being (여전히) the key pillars of the new five-year plan. Self-reliance in particular is supposed to become “nationwide” (국가적), “planned” (계획적) and “scientific” (과학적).
When talking about the “improvement of socialist economic management” (사회주의경제관리개선), Kim Jong Un defined the North Korean economy as “independent, planned, and people-oriented” (자립경제이고 계획경제이며 인민을 위하여 복무하는 경제), which again is not a sign of market orientation. Terms like “the state’s unified guidance” (국가의 통일적지도) further underscore a focus on centralized and state management of the economy, rather than a policy that allows for decentralization and market forces to play a bigger role. Market indicators like prices, etc., are to be used to that effect.
Very notable in this context of “state versus market” is Kim Jong Un’s emphasis on commercial service (상업봉사활동전반) and the need to preserve the “socialist service culture” (사회주의봉사문화) and “restore the state’s leadership and control” (국가의 주도적역할, 조절통제력을 회복) in this sector. The wording is much more dramatic and urgent in the Korean version compared to the official English translation. Kim calls this an “important task that must be resolved by all means” (반드시 해결하여야 할 중요한 과제).
What might at first glance seem to be a minor issue could have major implications for the overall direction of economic policy. If we understand Kim Jong Un correctly in his intention to reduce the influence of private and semi-private economic activities, and reintroduce the dominance of the state in the economy, then it indeed makes sense to focus on one area that has witnessed the most dynamic development of marketization and emergence of private businesses in North Korea in the past two decades.
Hundreds of restaurants and small shops, transportation businesses and other services have emerged in North Korea. They are officially operated by state entities, but, de facto, these are privately owned businesses. Eventually, the owners who turned into “masters of money” (돈주) accumulated enough capital to expand their businesses and to increase concentration levels of their market shares, thus gaining substantial economic power that could be transformed into political influence. This not only refers to corruption but also becoming major employers and important payers of taxes and quasi-taxes.
These businesses are not yet “too big to fail,” as it has often been said about South Korean business conglomerates (chaebol), but the emergence of North Korean chaebol is only a matter of time. In fact, it has already begun with such big state-owned players as the airline Air Koryo expanding into the taxi, beverages and fuel-supply businesses. Now it seems that Kim Jong Un is trying to rein in this dangerous trend by encouraging the state to reassert control over the services and commerce sectors.
It remains to be seen how this will be implemented in practice, and what the response of the affected business owners will be. In 2009, a currency reform aimed at expropriating the newly emerged entrepreneurial class failed and was silently rolled back, presenting officials like Pak Nam Gi as scapegoats who were misled by hostile outside forces.
4) The focus is internal. Trade and tourism play only a minor role.
No external visitors were present at this Congress. Before the collapse of the socialist system in the late 1980s, it was customary to invite representatives of friendly communist parties. This was not done in 2016 when relations with China were at a low point. Foreign journalists were admitted into the country, although they could not enter the Congress venue. This time, neither official guests nor journalists were admitted.
North Korea is facing a number of challenges due to tightened sanctions since 2016 and the pandemic of 2020. Kim Jong Un has decided to search for solutions domestically. He emphasized slogans like “Our style of Socialism,” “People-Centeredness,” and “Our Country First-ism” in his opening speech, and in his closing speech a week later, he even suggested changing the motto of the Eighth Party Congress to reflect the three key slogans “The people are God” (이민위천), Single-Hearted Unity (일심단결), and “Self-Reliance“ (자력갱생).
Considering the key role of foreign trade in all standard models of economic development, and the prevalent role played by foreign trade in the success stories of Japan, South Korea and China, it is worth paying particular attention to what the North Korean leader has to say on that subject. However, Kim Jong Un’s report included very little on it. The main strategy for the upcoming five-year plan seems to be “domestic production of inputs” (원자재의 국산화)—in other words, import substitution.
Tourism is to be promoted with two objectives in mind: First, to “make our people enjoy a more civilized life” (우리 인민들이 보다 문명한 생활을 누리게 하고), which could either mean the development of domestic tourism or the generation of revenue for local hospitality industries through foreign visitors; and second, to “spread the changing image of our country to the world” (나날이 변모되는 우리 국가의 모습을 세상에 널리 떨치기). In other words, for propaganda purposes.
The Mt. Kumgang resort in the southeast is mentioned specifically, which is somewhat delicate as it was developed two decades ago with the help of South Korea’s Hyundai Asan but has been more or less dormant since the killing of a South Korean tourist in 2008. After a visit by Kim Jong Un and, more recently, his report at the Party Congress, it seems North Korea indeed intends to rebuild these tourism facilities—but for whom? This will raise questions in South Korea about the possibility of continued cooperation, and the ownership of South Korean assets.
5) Metal and chemical industries identified as the key elements of economic development: a North Korean version of Park Chung-hee’s Heavy and Chemical Industry Drive?
No further details, such as production targets, were provided. However, as a strategy, the focus on metal and chemical industries are both reminders of classical socialist approaches of giving preference to the “commanding heights” of the economy, and of South Korea’s Heavy and Chemical Industry Drive in the 1970s.
Under the current situation of economic isolation, import substitution in this field does have its merits, as the products of these industries are key inputs for many other sectors, including military production. North Korea is in the fortunate position of having most mineral resources needed for operating its own metal and chemical industries. Plans to substitute crude oil, which is so far unavailable in North Korea, with alternative inputs like coal have been promoted for many years in official publications.
However, such industries require major investments of capital and technology, and they need export markets to operate profitably. It remains to be seen how North Korea can pursue such a policy under the current conditions of isolation.
6) Agriculture: renewed emphasis on state distribution?
For agriculture, Kim Jong Un stressed that state procurement levels must reach the 2019 level within the next two to three years. This can be interpreted both as a call to increase grain production, but also as a desire to reduce the share of grain traded freely on the market, and return to the dominance of state distribution through a rationing system or through state-subsidized shops.
7) Afforestation got an extraordinarily high level of attention.
It is noteworthy that among the few specific points of self-criticism, “deviations in afforestation” were mentioned. Furthermore, perhaps because Kim’s report was only published as a summary, very few detailed numbers were announced. It is thus particularly conspicuous that among them, we find that “about 1 million hectares of land” were reforested. It should also be noted that forestry was mentioned before agriculture in Kim Jong Un’s report, indicating a relatively higher priority.
8) Cement production is at lower levels than in 1970.
Construction seems to enjoy particular attention, too. Among the few details provided, Kim mentioned 50,000 new flats to be constructed in Pyongyang and 25,000 new houses in the Komdok mining area (which is also the location of an infamous labor camp).
In this context, Kim announced the target of producing eight million tons of cement during the next five-year plan. To put this in perspective, the average annual target of 1.6 million tons is merely 40 percent of the officially produced 4 million tons of cement 50 years ago in 1970, as reported by the East German (GDR) Embassy in Pyongyang back then.
This can be interpreted in two ways: Either North Korea significantly overstated its cement production in the past and is now providing more honest figures, or this part of the economy has far from recovered from the massive hits it has taken since the 1990s.
9) Focus on rural areas and the local level: a North Korean version of the New Village Movement?
Economic and social development often do not happen evenly in a country. Again, parallels to South Korean development come to mind, especially an initiative in the early 1970s under the dictatorship of Park Chung-hee, called the “New Village Movement” (새마을 운동). It aimed at reducing the gap between the quality of life in urban and rural areas by such measures as improving infrastructure like roads and bridges, replacing thatched roofs with more durable materials, and promoting health care, education and culture. Specific economic policy measures in this regard included the supply of cement to localities, which in the South Korean context of the 1970s was also a Keynesian measure to boost domestic demand for the newly emerging cement industry.
Against this background, it is striking how many parallels with the “New Village Movement” we find in Kim Jong Un’s remarks at the Eighth Party Congress, including his promise to provide 10,000 tons of cement to every local city and county annually. Kim announced the development of “advanced regions with their own characteristics” (자기 고유의 특색을 가진 발전된 지역), and called upon cities and counties to establish development strategies for local economies (지방경제) based on their specific conditions (특성) and the available resources (원료와 자재).
Local authorities of party and government are encouraged to become “powerful drivers of their own region’s development (자기 지역의 발전을 이끌어나가는 강력한 견인기가 되고). In a more programmatic sense, Kim demanded to “eliminate the differences between workers and farmers, industry and agriculture, and urban and rural areas” (로동계급과 농민간의 차이, 공업과 농업간의 차이, 도시와 농촌간의 차이를 없애다), and to “turn farmers into members of the working class” (농업근로자들을… 로동계급화하기).
The latter is not only the reflection of the well-known difficulties of applying Marxist-Leninist ideology and a working-class centered theory to the realities of rural production; it also parallels South Korea’s New Village Movement of the early 1970s, which also aimed at breaking down established and hierarchical social structures. Scholars of economic development like Clarence Ayres identified “ceremonialism” as one major obstacle to growth.
10) Development of mobile communications, cable broadcasting and commercial service.
Among the specifically mentioned economic development projects is Kim Jong Un’s demand to introduce “next-generation mobile communications” (다음세대통신). Cable broadcasting (유선방송) is promoted as a way to supply better entertainment to the people, but it is also a convenient way for the state to control the media consumption of its citizens. In this context, it should be noted that Kim repeated his earlier calls for the eradication of non-socialist and anti-socialist practices (비사회주의, 반사회주의적현상).
11) Plans to create a nuclear power industry.
This is a relatively logical step, considering that North Korea has chronic problems with the production of energy, is cut off from external supplies of key fossil fuels by sanctions, has its own domestic uranium reserves, and has made substantial progress in nuclear technology over the past few decades. Plans to provide nuclear power have existed at least since the 1994 Agreed Framework and the Korea Energy Development Organization (KEDO). Kim Jong Un’s remarks on a “nuclear power industry” (핵동력공업) will nevertheless raise eyebrows in the West due to its potential for enhancing the country’s nuclear weapons program.
His call to “create” (창설) such an industry is also noteworthy, as it implies that the currently existing facilities at Yongbyon are not considered to be substantial enough to count as an existing industry that only needs to be upgraded.
“Kim Jong Un Makes Opening Address at Seventh Congress of WPK,” KCNA, May 6, 2016.
“Supreme Leader Kim Jong Un Makes Opening Speech at 8th WPK Congress,” KCNA, January 1, 2021.
“Great Programme for Struggle Leading Korean-style Socialist Construction to Fresh Victory On Report Made by Supreme Leader Kim Jong Un at Eighth Congress of WPK,” Rodong Sinmun, January 10, 2021.
“Chairman Kim Jong Un delivers opening speech at Eighth WPK Congress,” Pyongyang Times, January 6, 2021; and “WPK General Secretary Kim Jong Un Makes Concluding Speech at Eighth Congress of WPK,” KCNA, January 13, 2021.