India and North Korean economic reform

The economic paradigm in the Asia-Pacific region is changing very quickly. America, which used to be the dominant player both economically and militarily, is no longer calling the shots. Not long ago it was the biggest trading partner of almost all countries in the region. Not anymore. Slowly but surely its influence is being eroded, and there is a new kid on the block. Today China has replaced the United States as the biggest trading partner of most Asia-Pacific nations. And given the growth of its military might in the last decade or so, it is merely a matter of time until China also becomes the strongest military power in the region.

America is making a last ditch effort to keep itself relevant in Asia by adopting new Asia-Pacific policies. But everyone concerned with regional development there knows the time of U.S. dominance in this part of the world has come and gone. It will never enjoy the same kind of influence it enjoyed immediately after the Korean War and during the Cold War years. All those who have been counting on America to keep the peace here have some recalculating to do.

Today economic transformation is rapidly reshaping things across Asia-Pacific. Southeast Asian countries such as Laos, Cambodia and Vietnam, which have all had communist and authoritarian regimes at one time, are undergoing major economic reforms. North Korea, which has resisted change for so long, has also showing signs of change recently. At this stage nobody can say for sure what the extent of expected reforms will be or whether or not they will succeed. That North Korea is taking some small steps toward economic reform is there for all to see.

Kim Jong-un, who assumed power after the death of his father, has shown inclinations toward opening up the economy of North Korea. During the regime of Kim Jong-il, the military enjoyed all powerful positions in all spheres of policy making under the “military first policy.” Understanding that the military must be separated from economic policy matters, Kim Jong-un has created a “political bureau” to wrest control of the economy away. Going one step further, an “economic reform group” has been set up within the ruling party to promote agricultural and economic reforms. In the recent past, a number of practical reform steps have been taken under the advice of this group.

Lately a clear-cut contrast has also been emerging between the leadership style of Kim Jong-un and his late father. While Kim Jong-il presented the image of a reclusive dictator very rarely seen mixing with the common people, the younger Kim has portrayed a very different public-friendly, Western-style image, visiting fairs, speaking and applauding in public with his young and beautiful wife by his side. With this difference in leadership style and approach in handling the affairs of the state, hope has arisen in international circles that change might be finally on its way in North Korea.

Whether these reform efforts are sincere or not is yet be seen. But they at least deserve to taken at face value and require international support. Pro-reforms steps, however small they may, need to be encouraged. The time has come when all right-minded parties put their acts together to help North Korea make sure it succeeds in these efforts this time around rather than eventually retracting from the reform path as they did in the past when faced with road block obstacles. There is too much at stake and such an opportunity may not present itself for a long time to come if present reform efforts fail to work.

China has been the main source of inspiration of these North Korean reforms. The success of the Chinese economy has been attracting the attention of North Korea’s political leadership for quite some time. Beijing has also been pressuring Pyongyang to open up its economy to save it from total collapse. Though interested, North Korea has been reluctant to adopt Chinese-style reforms, fearing dominance of its giant neighbor over its political system. To avoid total dependence on China for its economic revival, which could have very serious political and strategic implications not only for North Korea but for whole East Asia, North Korea has been looking for new partners who can help it in this venture. Along with the European Union one other country to which it has been eyeing for help is India.

India and North Korea have enjoyed a long and healthy relationship, with both countries having embassies in each other’s capital. Trade between the two countries has been growing steadily and is said be anywhere between $500 million to $1 billion annually. India has also been helping North Korea cope with its food crisis in the recent past by providing $1 million worth of food under the World Food Program. More recently, an increasing number of North Koreans have been visiting India to receive scientific and computer training.

Though interested in all such developments outlined above, India has so far been reluctant to play any bigger role in North Korea’s modernization efforts. At this point, it needs to have a more holistic approach toward the entire Korean Peninsula, keeping in mind the new emerging power paradigm in the region.

With America no longer in a position to hold to its hegemonic dominance and China pushing hard for its new role corresponding to its newly acquired wealth, the region finds itself under a constant power tussle between the outgoing and incoming hegemons. In the absence of any other player, the strategic space left vacant by the U.S. is being occupied by China, to the dislike of many other countries in the region.

Today India has very good relations with both North and South Korea. It thus occupies a very unique position from which to play a constructive role in both peace building and economic development efforts on the Korean Peninsula. Specifically, India should use its position to help North Korea carry out its economic reform plans.

Since the liberalization of the Indian economy, Indian companies have been investing in business projects all over the world. According to some conservative estimates, this has amounted to some $250 billion in investment outside India. It is high time that India’s political leadership starts encouraging Indian companies to do business with North Korea. For one thing, it is endowed with many raw material resources which the fast-growing Indian economy needs, and therefore the potential of cooperation between these two diplomatically friendly nations could be huge.

It is also high time that India understands the strategic importance of peace on the Korean Peninsula. Any disturbance of such could have world-wide ramifications. Today the greatest threat to peace is the economic collapse of North Korea. India must make sure this does not happen. Hopefully the Indian political leadership is listening.

The writer is president of the India Institute and a visiting professor at the Institute of Far Eastern Studies in Seoul. He can be reached at: parvkaur@kornet.net. <The Korea Times/Singh>