EAI Asia Security Initiative Working Paper No. 11

Author

Dongho Jo is a professor of North Korean Studies at Ewha Womans University. Before joining the university in 2007, he had worked at Korea Development Institute for 16 years as senior fellow and director of North Korean economic studies. He was graduated from Seoul National University and received Ph.D. degree in economics from University of Pennsylvania in 1991. He has also had lots of professional experiences. He is now policy advisor for chief secretary to the President of Korea for diplomacy and national security, advisor for the national assembly budget office, advisor for the advisory council on democratic and peaceful unification for the President of Korea, advisor for promoting inter-Korean exchanges and cooperation at ministry of unification, etc. His research areas are mainly the North Korean economy and inter-Korean cooperation.

I. Introduction

The Kim Jong-il era of North Korea is an era of military-first politics. Military-first politics is a survival strategy of North Korea that directs every policy area. It was chosen while North Korea went through extreme difficulties derived from the collapse of the socialist bloc in the early 1990s and the “Arduous March” in the mid-1990s. No matter how dire the situation was, Kim Jong-il could not possibly abandon socialism and introduce an active opening and reform policy. Thus a military-first strategy was an inevitable choice for North Korea in the 1990s.

Necessarily this military-first strategy brought about changes in traditional economic strategy. In the Kim Il-sung era, economic strategy had made developing heavy industry and simultaneously developing light industry and agriculture a top priority. According to the military-first principle, however, the focus shifted from heavy industry to the military industry. The principle also implied that all economic fields had to be sacrificed save for the development of the military.

What were the reasons for adopting the economic strategy of the military-first era and what were the underlying motives? Can such an economic strategy succeed? If it is bound to fail, what kind of strategies could come next? What would be the role of South Korea and neighboring countries to expedite the economic development of North Korea?

This paper seeks to answer these questions. It concludes that North Korea's economic strategy in the military-first era was positive for handling economic difficulties in the short run but could not help producing negative effects on the economy in the long run and finally bringing about the collapse of the North Korean regime. Therefore, this paper suggests that North Korea must abandon its existing economic strategy and adopt a new one if it wants to avoid collapse in the future.

II. Economic Strategy in the Military-First Era

1. Concept and Contents

According to North Korea, the military-first era is defined as “the era where all problems occurred in the process of revolution and reconstruction should be solved by the military-first principle.” Giving priority to the military means that “military affairs take precedence over others and strengthening the military industry should be treated preferentially.” North Korea has been propagating the military-first principle as a “new and ingenious idea” created by Kim Jong-il. In this sense, North Korea is criticizing Karl Marx by implying that he overlooked the importance of the military industry. North Korea is also criticizing Vladimir Lenin and Joseph Stalin in their emphasis on heavy industry and lack of “the right view on the strategy of the economic development.”

It was natural that North Korea’s economic strategy had started to focus on the military industry as the military-first era emerged. Such a strategy is called the economic strategy in the military-first era, which means putting the top priority on developing the heavy industry and simultaneously developing light industry and agriculture. According to the Gyungje Yeongu or Economic Studies, the most important North Korean quarterly economic journal, Jae-Seo Kim (1999) is the first article that emphasized the importance of the military industry and Seong-Hyeok Lee (2001) is the first one that connects the military-first principle and the military industry. The first article that includes “military-first” in the title is Dong-Nam Kim (2001), but it did not actually cover the military industry. The review of the articles in Economic Studies concludes that the discussions systematically analyzing the reciprocal relationship between the military-first principle and the military industry had not been initiated until the work of Lee (2003) and Park (2003).

Although economic strategy in the military-first era purports to mean that light industry and agriculture are to be developed simultaneously, what it actually means is that light industry and agriculture should be sacrificed in order to develop the military industry. In other words, the military industry is the “lifeline of building a strong and prosperous country” and it is the “fundamental economic principle in the military-first era” to develop the military industry. Thus “the government expenditure must be invested in the military industry before any other industry” and “the necessary inputs such as workers, facilities, raw materials, and electricity must be provided preferentially for the military industry.” Furthermore, Cho (2005) explains that what economic strategy in the military-first era really means is that the advancement of light industry and agriculture is needed to reinforce the military industry and that the military sector is the top priority among all sectors of the economy.

North Korea is using the term “military industry” as the “munitions industry.” For instance, Kim (2005, 109) defines "the military industry” as an industry to supply modern arms. In fact, North Korea divides its production sectors into three categories: munitions production, producer goods production, and consumer goods production, and the munitions industry is defined as the industry that produces materials used for military purposes. Thus North Korea says that “the munitions industry is the same as the military industry since the munitions industry contributes to defending North Korea from military attacks by the imperialist countries.”

2. Logic

What is the logic behind the economic strategy in the military-first era and how does North Korea justify such a strategy? According to North Korea, the goal of economic activities in a socialist society is to guarantee the independent and creative lives of workers just as it is to produce surplus value for the properties of the bourgeoisie in a capitalist society. The independent and creative lives of workers consist of two parts. First, people have to be independent as the owners of the society and their independence is secured by protecting socialism from the invasion of imperialism. Second, people must enjoy abundant and civilized lives that are guaranteed by fulfilling material needs.

North Korea explains that the first part is more important than the second part because it is impossible to improve people’s living standards unless socialism can be protected from the aggression of imperialism. In other words, people’s wealth is meaningless if they remain slavish. So any other industry cannot be more important than the military industry and without its development, national security cannot be ensured and economic improvement cannot be achieved. It is to say, "we can live without a lollipop but not without a bullet" and "it is human nature to prefer living in an independent country even if food and clothes are much worse than living in a colonized country.”

Undoubtedly light industry and agriculture will decline if the military industry is regarded as the top priority, since the funds to invest are limited. As a result, they will influence people's living standards in a negative way. But North Korea is insisting that "the military-first principle is not sacrificing people's living standards by focusing on the military industry. It is not only to protect the nation and socialism but also to provide better lives for the people." However, North Korea does not present the specific logic of how it is going to improve people's living standards.

Then how will economic strategy succeed in the military-first era? North Korea claims that the voluntary work of workers based on their revolutionary ideas is the basic means and that “revolutionary military spirit” makes them achieve a higher level of effort for their voluntary work. To answer the question why “revolutionary military spirit” is required, North Korea explains that every era needs the spirit of the times and thus they need a revolutionary military spirit as North Korea enters the new era of the military-first principle.

3. Economic Strategy in the Kim Il-sung Era

Economic strategy in the Kim Il-sung era can be summarized as putting top priority on developing heavy industry and simultaneously developing light industry and agriculture. So the difference of the economic strategies between the Kim Il-sung era and the military-first era is whether top priority is placed on heavy or military industry.

North Korean literature indicates that the economic strategy of the military-first era is not separate from that of the Kim Il-sung era and in fact inherits the latter. The reasons can be explained as follows. First, the military industry is closely related to heavy industry because heavy industry is the foundation of the military industry, and the military industry induces the rapid development of heavy industry. Second, the military and heavy industries share common factors in terms of physical and technological characteristics. For instance, the weapons industry, which is the core of the military industry, is the machine industry, which belongs to heavy industry. Third, the development of heavy industry is a precondition for the development of the military industry since the products of the heavy industry, such as fuel, electricity, equipment and facilities are the inputs of the military industry.

In addition, North Korea claims that Kim Il-sung did actually stress the importance of the military industry and endeavored to reinforce it. For example, he noted that that "the modern military industry is one of the most important areas in building self-reliant national economic foundation” and he accentuated the “importance of the military industry in his entire leadership period.” There also exist articles enumerating the cases of building factories for the military industry since 1945. But the economic strategy in the military-first era is different from that of the Kim Il-sung era since it is clear that the top priority in each strategy is not the same. The reason why North Korea asserts two strategies is basically identical, based on the realistic environment in which they cannot deny the legacy of Kim Il-sung...(Continued)