20 November, Monday


In the DPRK, a full NEP and build of capitalism

Specialist view

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Mikhail Magid,
 
publicist, specialist in the Middle East,
 
basing on a conversation with Andrei Lankov - the world's leading specialist in North and South Korea,
 
specially for Eurasia Diary
 
Speaking about the latest developments in the DPRK, he stressed that the country feels confident; there are major market reforms in agriculture and industry in the spirit of the New Economic Policy (NEP) and even more radical ones.
In the village, a tax of 30%, land was given to a family contract, collective farms exist rather formally, and the rest of the family is consuming or selling at their own discretion. Markets are growing.
 
The planning system has practically been eliminated in the cities. Enterprises themselves decide who to sell the products to, they only inform ministries about the scale of production. Taxes are about 30%, which is even a moderate tax by Western standards.
 
Private business, in fact, has long been resolved, but there were formal limitations, hence the large volumes of the shadow economy. But now, laws are enacted which are ensuring the possibility of private investment in large-scale industry. So the state is trying to channel large amounts of money accumulated in the shadow economy into the industry. Taxes from the industry are also very moderate - 30%.
 
As a result, the economy grows by 4-6% per year; the threat of hunger is eliminated. Bolshevism died in the DPRK. The country is gradually, step by step, building capitalism.
 
In the field of politics, pressure is growing. This applies, first, to freedom of speech, and secondly, to appointments. Kim Jong-un does not trust the military very much, he is afraid of a military coup. That’s why the term of stay of the military on a high post on average about 10 months, further he is removed. But in general, as far as the armed forces, they are developing. The northerners are particularly successful in developing their missile systems, so the regime is not going to capitulate.
 
It is important that the factor of the American threat is rallying the population of the DPRK. And the fact that the Americans are only throwing threats, but not fulfilling them, the North Koreans perceive as the weakness, and this strengthens their self-esteem. However, no one knows how the population of the DPRK can behave in the event of a war with the US and South Korea.
 

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