The North Korean Economy in 2023–2024: Still Backing into the Future

By: Benjamin Katzeff Silberstein

Where does the North Korean economy stand, and where is it going? Kim Jong Un spent some of the last few days of 2023 at the 9th Plenary Meeting of the 8th Worker’s Party Central Committee that was held in Pyongyang. The meeting notes published by KCNA serve as a good guide to the economic and political priorities of the regime as well as its assessment of the year that passed.

Overall, Kim Jong Un appears to be moving closer to accomplishing his vision of a tightly state-directed and overseen economic system, with some flexibility for the actors within it. We have seen over the past few years how the state has proclaimed its ambition to control and oversee the economy much more closely, with examples now abounding of this playing out in practice, from the piecemeal trade opening post-Covid-19 essentially amounting to a state ban on private actors in foreign trade, to measures like a recent reregistration campaign for businesses in an effort to more closely oversee what goes on in the economy and extract rents and taxes. Kim Jong Un intends to put a stop to the economic anarchy that has plagued major aspects of the North Korean economy since the famine and subsequent marketization. Full central planning is not the goal, but the tighter screws on the economy can still make much damage in suppressing trade, investment, and initiative. They likely already are.

Although it makes for gloomy prospects, this is in line with Kim’s policy aspirations. All in all, 2023 is arguably the first year since the start of the pandemic where some sort of progress has been made in the economy, but it isn’t much. This year’s harvest was, as the plenum summary notes, not just good but significantly better than last year’s. The plenum summary credits this to investments in expanding irrigation systems:

On the agricultural front, the dominant height for national economic development, the huge annual irrigation construction target decisive of substantial and profitable development was fulfilled ahead of schedule and a rare harvest was achieved. And the successes on 12 major goals were made one after another.”

Though this may certainly have played a role (if these investments occurred on a significant scale), luck with good weather is the main explanation. As a USDA projection states,

This year’s growing season began with beneficial soil moisture conditions, and the rainfall outlook continued to be above average providing favorable conditions for planting, crop establishment, and reproduction during May to early August. The conditions have continued to raise yield expectations from average to above-average especially for the major, summer-grown food security crops of corn and rice.”

This positive assessment of base conditions also bears out in the market price data, where lower rice prices suggests a greater availability of rice. However, this is not an achievement by the state, rather mostly a work of luck and chance.

The fact that a stabile harvest is such a success itself points to the rough state of the economy and its dim prospects. A good harvest absent systemic reforms is rarely a political achievement. On the international arena, the regime has been backing into the future by moving closer to both Russia and China while closing embassies on a large scale in other countries. As the world moves toward a world order more resembling the Cold War, North Korea is going back to its roots as well. What’s happening in the domestic economy seems to be mimicking and following along with this dynamic. The focus on the plenum on mere manufacturing capabilities, mostly within North Korea’s traditionally emphasized heavy industries, also points to a move backwards, to an economy much more in line with North Korean tradition, perhaps as a significant future weapons manufacturer for the emerging anti-American world bloc. For the North Korean population, hoping and expecting more marketization and a higher quality of life, this is unlikely to be good news in the long run.

View Original Article
Stay informed about our latest
news, publications, & uploads:
I'm interested in...
38 North: News and Analysis on North Korea