Country Report North Korea February 2011

Outlook for 2011-12: Policy trends

Boosting light industry and agricultural production remain key priorities for the regime, but a series of ministerial shuffles in related posts in 2010-11 show that ministers have not yet come to grips with the challenge. The recent reappointment of Ri Kyong-sik as minister of agriculture, a post he has held before, also shows the dearth of new thinking. One of the key reasons for the failure to improve economic policy has been the prioritisation of military needs ahead of the civilian economy, yet this will continue in 2011-12. Kim Jong-il's hostility to private enterprise appears to be undimmed. The prospects for economic reform are thus, as ever, poor, but it cannot be entirely ruled out, especially given the strong pressure from China for change. The elevation of Pak Pong-ju (who as the premier of North Korea from 2003-07 sought to implement a partial reform package) to the position of alternate politburo member in late 2010 was one optimistic sign for future policy, although most of those holding economic posts are managers rather than reformers. In the field of foreign trade and investment there may be more room for optimism than in other areas. Kim Jong-il's hosting of Naguib Sawiris, the executive chairman of an Egyptian telecommunications firm, Orascom Telecom, one of North Korea's most prominent foreign investors, in January 2010 may have presaged a new push to draw in foreign direct investment. This could be an aspect of a new ten-year State Strategic Plan for Economic Development that was announced in the same month, but unsurprisingly no concrete details on the plan were given.

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