Today's date:
Winter 2004

North Korea's New Model—Vietnam

Jeong Se Hyun, minister of Unification of the Republic of Korea, is Seoul's top official in charge of relations with North Korea. His comments are adapted from a conversation with NPQ editor Nathan Gardels in Seoul on Dec. 4.

Seoul -- Reports of North Korea's economic collapse are exaggerated. But it is looking for a new model that will enable it to partly open up while maintaining control.

Many people in the richer countries of the West believe that North Korea's economy is so near collapse that it can't last. But North Koreans have lived at that level now for almost 20 years and somehow seem able to withstand it. Hardship is hardly new for them.

But because the outside environment is changing so radically as Asia advances, the leadership is looking for a way to improve their system and join the world while still preserving the Communist regime. Their model now seems to be Vietnam.

We have observed where the North Koreans have traveled over recent years to learn about the market economy. While in the past they have looked at some European states and China, lately they are sending more and more expert delegations to study what is happening in Vietnam, including studying their legal system and property relations. When former Russian prime minister Yevgeny Primakov visited Seoul recently, he also noted this new Vietnam connection.

In essence, the Vietnamese model is a modification of the Chinese model—opening up the economy step by step while maintaining rule by the Communist Party. It is the distinctly alternate path to development than that followed by the Soviets under Mikhail Gorbachev's perestroika that led to downfall of Communist rule.

Like China, Vietnam is rejuvenating its economy by opening it partly, yet keeping party rule intact. But there are many ways in which the Chinese experience is not useful for North Korea.

When China first began opening up, its foreign investment came largely from the vast diaspora of overseas Chinese. That inflow of capital propelled early development. Except for a small community of former boat people, Vietnam has no supportive overseas ethnic connection. As a result, Vietnam has to figure out how to attract capital from outside on its own. North Korea is in the same situation.

Like North Korea today, Vietnam had a very conflictive relationship with the United States. It is a small Communist state resisting outside pressure. Like Korea, Vietnam was divided. Vietnam and North Korea also have similar size populations, unlike China with its billion-plus population.

Because of all these reasons, the North Koreans see a path to reform in Vietnam that requires them to make the fewest adjustments from their present circumstances.

In the end, North Korea has to open its doors just to keep going, no less to respond to the inexorable need to improve the lot of its people. When they do open their doors, of course, they may not end up where they thought they were going. We know the Russian experience. China today is certainly not where Deng Xiaoping expected it to be when he began opening up in the 1970s.