Japan and North Korea.

• Author: Endo, Tetsuya

For Japan, the Democratic People's Republic of Korea (North Korea) is of major importance. That country has the potential to shape Japan's foreign policies into the twenty-first century and to affect Japan's relations with other states. But North Korea is perhaps the most difficult country in the world to study and to understand. It is opaque because of its homogeneity and its compactness which allows it to close its borders and act rather like a porcupine does in defence. It is aptly described as the `hermit kingdom'. There is, therefore, more guesswork and wishful thinking than there is clear and knowledgeable analysis of the country. This article is only able to cover in outline the main points of the issues between Japan and North Korea.

The North Korean political system has a number of features which combine to form a unique kind of polity. Firstly, the regime is based on a political ideology formed from an unique Korean style of socialism which seems to be based on a mixture of three distinct elements: a form of Marxist-Leninist socialism; the national ideology of self reliance (Juche); and traditional Confucianism.

There is a nascent form of political dynasty building as authority and power have been transferred from Kim II Sung to Kim Jong II. Because this hereditary transfer has only occurred between two generations, the regime has also created a mythology of the semi-deification of Kim II Sung to emphasise the legitimacy of his dynasty.

Finally, the system is completely closed. It is closed to outsiders and it is closed to the general population. The closed nature of the system is a powerful element of the control processes exercised by the regime.

There are several economies in North Korea: the military economy; the party economy; the general economy; and the underground or black economy. Of these the first two, comparatively, are in fair shape. It is the general economy which is in serious condition. Since the 1970s the North Korean economy has deteriorated, particularly in the last half decade in which there are indications that annual GDP decline is in the order of 4 to 5 per cent and exports have declined by more than 12 per cent a year in the same period.(1) In this, the country is an exception to the general dynamic growth in the Asia-Pacific region.

Four reasons

There are four significant reasons for this. Firstly, there is a fundamental deficiency in socialist `command' economic practices. Secondly, there has been no investment in new technology for many years. Thirdly, the burdens of military expenditure are great. The economy is only a fraction of the size (perhaps 5 per cent) of South Korea's, yet the North attempts to match the South in military capacity. Finally, there has been a dramatic collapse in the economies of North Korea's economic partners. In the 1980s some 50 per cent of North Korea's trade was with the then Soviet Union, which was a source of consumer and manufacturing goods at friendly prices and which provided an open account for North Korea to draw on. Since then transactions have had to be in hard currency and at international prices. Three areas have been particularly hard-hit: food; oil; and foreign currency.

North Korea is not suitable for agricultural production because of its unfavourable terrain and climate. In the period of Japan's colonial rule this was well recognised, with industrial production being concentrated in the north while agricultural development was mainly confined to what is now South Korea. Now, the chronic long-term problems of poor weather (especially in the 1990s) and unsuitable geography have been exacerbated by specific systemic problems which have been caused by the regime's ideologically based collectivisation policies which have led to low levels of labour morale which in turn have caused low productivity.

North Korea has no oil. In the 1980s some 2.3 million tons of oil were imported annually: about 1.0 million tons from China, the same amount from the Soviet Union and about 0.3 million tons from the Middle East. After the collapse of the Soviet Union imports from there have ceased, but China has continued supply. The major question is, how does North Korea pay for the oil? Is it receiving credit from China and if so will it have to repay the loan?

Because oil imports in the...