North Korea Reinstates Market-Oriented Officialhttp://www.nytimes.com/2010/
SEOUL, South Korea — A former North Korean prime minister who was banished three years ago for pushing market-oriented reforms too far has returned to the center of economic policy, leading to speculation that the nation’s leader, Kim Jong-il, might give such proposals a second chance.
The former prime minister, Pak Pong-ju, 71, resurfaced at a state function in the capital, Pyongyang, on Saturday, carrying the title of first deputy director of the central committee of the ruling Workers’ Party of Korea, according to the North’s state-run Central Broadcasting Station.
He is the latest among senior North Korean officials whose sudden banishment and equally unexpected reinstatement have sparked outside speculation about Mr. Kim’s intentions. Mr. Pak appeared to have fallen from Mr. Kim’s favor when he was fired from the premiership in 2007 and sent to work as a factory manager in a provincial town.
“His reinstatement could signal the return of pragmatists and reformists,” said Cheong Seong-chang, a North Korea analyst in Sejong Institute south of Seoul. “We may be able to see him push the economic reform and openness he had once championed.”
Analysts in Seoul say that few North Korean officials wield much individual influence in Mr. Kim’s government. But they say they can infer Mr. Kim’s plans from the way he punishes and rewards officials identified with various policy approaches.
“Pak’s reinstatement indicates that North Korea is shifting back to market reforms, even if grudgingly, after its botched attempt to re-enforce state control on the economy,” said Baek Seung-joo, the head of North Korea research at the government-financed Korea Institute for Defense Analyses in Seoul.
Mr. Pak, a lifetime technocrat, was best known as the architect of “Measures to Improve Economic Management Order.” Issued on July 1, 2002, they indirectly acknowledged the failure of the North’s ration system by instructing factories, collective farms and other economic units to provide their own daily necessities and give incentives for workers.
In September 2003 Mr. Pak was made prime minister, a post in charge of implementing economic policies.
His reforms were necessitated by the collapse of the centrally planned economy after a famine in the mid-1990s. But they also coincided with — and fueled — the spread of private markets, which quickly emerged as a key source of food and other necessities for North Koreans.
But Mr. Pak’s reform programs irked the regime’s old guard, especially its hard-line military, which had grabbed the lion’s share in trade under the old system. The markets facilitated the inflow of DVDs and other smuggled capitalist goods the regime considered a threat.
Around 2005, North Korea began controlling markets. Its attempt to reinforce state control on the economy peaked late last year when it replaced its banknotes with a new currency, shut down markets and ordered people to buy goods only from state-run stores. The currency reform was aimed at stifling the markets by drastically reducing traders’ personal wealth in the old currency.
The moves quickly backfired. Inflation surged as traders hoarded their goods and government stores failed to meet demand. Sporadic protests were reported. Earlier this year, Pak Nam-gi, head of finance and planning who led the failed currency reform, was executed, according to South Korean news reports. North Korean markets began coming back to life, according to recent defectors.
The return of Pak Pong-ju, the former prime minister, comes as North Korea prepares for a party caucus early next month. Officials and analysts in Seoul say they will monitor the meeting for change in the cabinet and party leadership that might provide clues to Mr. Kim’s plans to hand over power to his third son, Kim Jong-un, who is in his late 20s.
Mr. Pak’s reinstatement adds to the growing influence of Jang Song-taek, Mr. Kim’s brother-in-law, said Mr. Baek, the researcher.
In June, Mr. Kim presided over a session of the rubber-stamp Supreme People’s Assembly where Mr. Jang, a potential caretaker for his son, was elevated to the No. 2 post in the ruling hierarchy. In the same meeting, Mr. Pak’s successor as prime minister, Kim Yong-il, who reportedly made a rare apology in February for the botched currency reform, was fired.
Mr. Pak, as first deputy director, is believed to report directly to Kim Kyong-hee, Mr. Kim’s younger sister and Mr. Jang’s wife, who works as party director in charge of the North’s light industries, Mr. Cheong said.Mr. Jang, 64, is widely seen as a main player in ensuring the transfer of power to the leader’s son. He may even head a collective caretaker government if Mr. Kim dies before his son is firmly in control in Pyongyang or is seen as too young to lead a regime hierarchy dotted with generals in their 70s and 80s, analysts said.