THROUGH THE LOOKING GLASS

The Economist, July 10th, 1999

To CONTEMPLATE North Korea is to stare into the abyss. There are those who argue that if North Korea fails to reform, its regime will collapse. Others retort that, on the contrary, collapse will follow directly from reform. Probably both are right. Nobody knows how many have starved to death since food began to run short in the mid-1990s. An educated guess is a few hundred thousand, out of a population of 23m. The worst reports are of ten times that number. Certainly hunger is widespread, if not quite as bad as it was a couple of years ago. The standard ration is 150-300 grams (5-10 oz) a day of maize or rice, depending on the area. That is equivalent to three to six slices of dry bread. The food does not always arrive. Informal farmers' markets sell food, but a kilo of rice costs twice the average monthly wage.

Hunger and malnutrition go hand in hand. one doctor told a party of foreign visitors this year that one in five adults admitted to his hospital was malnourished. A study by the UN'S World Food Programme, which is supplying more than a third of the population with food, concluded that 15% of children aged under eight were wasted and 6o% stunted and underweight. The worst-affected have suffered brain damage. The famine is chiefly of the regime's own making. Although North Korea has suffered droughts and floods and a shortage of oil since the collapse of the Soviet Union, such shocks could have been mitigated by sensible policies. Hwang Jang Yop, the North's former chief ideologist and the most senior person to have defected to the South, describes North Korea as a mixture of "socialism, modern feudalism and militarism".

Each of these has contributed to the mess. The socialism created a collectivised economy incapable of giving out the normal economic signals. The economic plan is guided by ideology, and any economists and technocrats who argue for a more pragmatic approach are disparaged by the leadership as "empiricists". As in other communist countries, the distortions have grown over the years. There is no concept of quality. The factories are archaic, designed to make goods of a standard that other industrial economies left behind in the 1950s and 60s. The remedy for every setback is revolutionary zeal.

The Kim cult

The distortions are exacerbated by a modern form of feudalism. At its apex is a personality cult that makes Stalin or Mao seem like team players. The deceased Kim II Sung and his son, Kim Jong Il, permeate everything. Every house has its portraits of the leaders; every lapel its badge. Nobody could have described Kim II Sung as bookish, but his collected works somehow fill 4o-odd volumes. On his 70th birthday, in 1982, he was honoured in the Potemkin village of a capital, Pyongyang, with a triumphal arch-which is naturally a few metres taller than that other arch in Paris. After he died, in 1994, it was reported that the largest of the country's 35,000 statues of the Great Leader was circled by flocks of geese, honking plangently. Brilliance runs in the family. In Kim Jong Il's younger, wilder days, hisbiographers reveal, he wrote six operas, each of them better than any in the history of music. The first time he turned his hand to golf, he scored five holes-in-one and beat the world record for a single roun

d by 25 strokes. But the Dear Leader's lasting achievement is to have established the first dynasty in communist history-indeed, father and son reign jointly, because the presidency is still occupied by his dead father. Something has clearly changed since the 1970 edition of the North's own "Dictionary of Political Terminologies", which defined hereditary succession as "a reactionary custom practised in exploitative societies". The corollary of the Kims' self-proclaimed genius is infallibility. A system designed by two perfect leaders cannot be challenged without undermining them. Every North Korean's daily life is governed by the "ten-point principle to support the monolithic leadership". This consists of ten different ways of asserting a single truth: Kim Il Sung has absolute authority. The principle sits above the constitution. Another blow to the North Korean economy has been the third item on Mr Hwang's list: the militarism that has drained civilian wealth since the 1960s. For one of the world's poorest

countries, maintaining the world's fifth-largest army in readiness for an attack on-or from-the South is a crushingly expensive business. The military budget is around $5.4 billion a year, according to the International Institute for Strategic Studies in London-anything from a fifth to a third of the North's GDP. The armed forces run a parallel economy, with their own mines, farms and factories, though many soldiers and junior officers still go hungry. The North Korean leadership's declared aim is the liberation of the South by the Korean Workers Party through battle. The permanent war footing is just one manifestation of its obsession with a rugged sort of self-reliance. Called juche (pronounced choocheh), or "Kimilsungism", it has superseded Marxism and Leninism, all references to which were removed from the North Korean constitution in 1992. Juche is autarky raised to the level of a philosophy. The North Koreans consider any reliance on the outside world as a source of weakness, as though they were still

fighting their guerrilla war against the colonial Japanese. Yet even North Koreans may be dimly aware that the land of juche currently lives off aid, much of it from the United States.

Because North Korea does not repay loans, it cannot borrow money; because it welshes on deals, it drives away potential partners; because it aims for self-sufficiency, it cannot specialise or exploit its comparative advantage. North Korean exports, which consist of such things as film and television animation, reconditioned cars and, inevitably, arms, are worth less than $1 billion a year, only a few per cent Of GDP. Were it integrated into the world economy, exports would be far larger.

Even if Kim Jong Il tried to improve his country's agriculture (he is currently said to think that the potato has a lot to offer), he would have a huge job on his hands. Starving peasants in the Soviet Union in the 1930s and China in the 1950s could have fed themselves if given the chance, but in North Korea the farm sector is part of the industrial economy. It relies on fertiliser, tractors, spare parts and seeds. And even if the rural population had enough to eat, people in towns would still go hungry. The famine is the agricultural dimension of a general economic collapse: it can be put right only if North Korean industry gets back to work. It is hard to be sure about anythingthat goes on in North Korea, but piecing together information from a variety of sources, it seems that civilian factories are running at about 20% of capacity, and output has fallen by half since l990. Mines are flooded, and power blackouts are routine. Factories are being sold as scrap across the Chinese border. There is no medicin

e and little water. Teachers abscond, and children skip school (unless they receive UN food aid for turning up). Sometimes trains fail to run because people steal the railway sleepers for firewood.

Can he last?

Most observers think that Kim Jong Il will be able to muddle through for a long time yet. A world-class security apparatus makes it hard to organise resistance. Each of the security services' three branches checks on the other two, as well as on the population in general. Households are arranged into groups of five, with a cadre allocated to each group to supervise it and report lapses in ideology. These are easily committed. Even sitting on a newspaper bearing Dear Leader's photograph is a crime because it implies disrespect; if a woman smokes, she may be betraying counter-revolutionary tendencies. Loyalty among the elite is rewarded with Rolex watches and Mercedes cars, but "criminals" guilty of ideological transgressions are sent to join the 200,000 or so people in the North Korean gulags.

North Koreans have long suffered under their rulers. The Japanese imposed a brutal regime on the whole peninsula from 1910 to 1945, suppressing the Korean language and culture, forcing men into the Japanese war effort and women into military brothels. Before that, Korca's feudal Yi dynasty had ruled for 518 years. The old Korea had a five-house security system,just as the North does today. Society was organised into hereditary classes. At the top of the heap was the king, who had almost god-like authority. At the bottom, until the 1890s, were slaves. However bizarre it may seem to outsiders, the near-divinity of their leaders is something the North Koreans have learnt to live with, if not always easily. The regime classified 27% of the population as "hostile", and a further 45% as "unstable ". The North Koreans at the bottom are excluded from opportunities and positions of power, and they get less to eat. But they seem to accept their lot as their ancestors did throughout the Yi dynasty. Kim's inspiration w

as Stalin rather than Korean history (about which he knew little and cared less), and the regime can call on a propaganda machine of which Beria would have been proud. The only radio and television stations on air are govemment-run. North Koreans learn that the food shortage is a global catastrophe, and that they are comparatively well off. Even some members of the elite are unaware of the scale of the famine, and ordinary people know little of the outside world. When a villager was asked by a recent visitor how many countries there were in the world, his uncertain reply was "Five". Still, some observers think they can detect the first stirrings of change in North Korea, even if radical reform remains unlikely. in the past few months, Hyundai, acting as a tour operator, has taken tens of thousands of South Korean tourists to Mont Keumkang, a beauty spot in the North. Over the life of Hyundai's six-year agreement with North Korea, this tourism will raise almost $1 billion in forreign-currency earnings for Kim

Jong Il's regime. The company is also negotiating to create a series of joint ventures to exportbillions of dollars-worth of products from North Korea. The number of South Koreans visiting the North, businessmen among them, has increased sharply. The North's regime has formally recognised the farmers' markets, and now accepts the concepts of "profit" and "cost". Last year it sent some 120 North Koreans abroad to study economics, compared with about ten a year in the past. Yet optimism would be wildly premature. Recent propaganda from Pyongyang puts it pretty bluntly:"Under any adversity, we are not greedy for others'technology, economic power and money.

Our willis to build a socialist powerful state in our way, not by reform and opening up, but based on our political and ideological base, military base and our self-reliant national economy." One analyst describes the regime's approach as "tactical compromise to defend strategic intransigence". Such intransigence makes a certain amount of sense, because any real reform seems more likely to lead to the regime's collapse than its salvation. Kim Jong Il is steeped in North Korean Stalinism. Having been groomed to take power since the mid-1960s, and having ruled alongside his father in the later years, he has embraced the policies of Kim Il Sung as his own. Besides, he cannot abandon juche without seeming to disown his father. That would be unwise for a man who lacks Kim Il Sung's popularity as a national "liberator". Radical reform would also call his own legitimacy into question, because his main claim to power is his unique understanding of the ideas his father embodied. The foreign investment in North Korea

sounds impressive, but it has not got far. in the past few years Kim Jong Il has lost (or possibly purged) two of the most senior officials involved in trying to attract such investment. Hyundai's tourists may be physically treading on Northern soil, but they have no contact with the local people, and sometimes get arrested. Negotiations for other kinds of business have made little progress. The only joint manufacturing venture between North and South is Daewoo's North Korean factory, which makes Pierre Cardin shirts, among other things, and it is an open secret in Seoul that the company has been struggling with it. The North is aways asking Daewoo for money, and does not let Southern managers get close enough to the workers to run the business. Perhaps foreign investors should have spent more time studying the sayings of Kim Il Sung: "We can learn from foreigners, of course. You must chew first. If it's agreeable, you can swallow. if it's disagreeable, spit it out."

The farmers' markets are not quite the success they seem either. They emerged despite the regime, not in response to reform. in late 1997, Kim Jong Il complained that food shortages were creating "anarchy". He worried that the farmers' markets were breeding "egoism among the people and [that] the base of the party's class may come to collapse." He has a point. The markets are places where corrupt officials sell food. Sometimes they have stolen it, sometimes they have obtained it by using ration coupons they have bought at a discount from people who lack the connections to change their coupons for food. Corruption not only undermines the standing of the party, it also creates alternative networks of power. if Kim Jong 11 attempted to curb the markets, he would, in effect, be depriving some members of the elite of their income. If he lets the corruption flourish, he may be nurturing rivals. North Korea appears to be gradually falling to

pieces. Escaped dissidents complain of the breakdown of society, of the petty crime, and of the struggle for survival. in acountry where travel used to be heavily restricted, hundreds of thousands are said to be on the move, searching for food. Apparently genuine video footage of a farmers' market was broadcast on South Korean television earlier this year, showing hungry, abandoned youngsters scavenging barefoot around the stalls.

Unstable, unreformable, or both

There is discontent. Fugitives say that, within their families, people have begun to admit their dissatisfaction. There are reports of graffiti such as: "One good meal is better than loo good instructions from the Great Leader." Nobody knows how many are fleeing the country, but there are anything from 10,000 to 300,000 North Koreans in China. An escaped lieutenant from the North's special forces tells of an army rebellion shortly after Kim II Sung's death. it was ruthlessly put down. And there is madness. A family talking to a journalist for the first time since escaping to the mountains in China say they left because they had run out of hope. The mother, in her 50s, had visited a neighbour, who had been due to give birth. There was no sign of the baby. The woman had something boiling in a pot on the stove. She said it was a rabbit. It wasn't. Kim jong Il's regime is inherently unstable. The economy is collapsing and needs radical reform, There is despondency and latent unrest. Corruption is rife. The milit

ary machine is far larger and more powerful than the country can afford. If North Koreans ever discover what the outside world is really like, they will surely never forgive Kim Jong Il.