North Korea could be a different country

Mark O'Neill April 05, 2024 22:08

Kim Jong Un is one of the most dangerous men on the planet. The third member of the Kim dynasty to rule North Korea, he has at least 50 nuclear warheads he could fire at Seoul, Tokyo or San Francisco.

Last December he abandoned a 78-year-old policy of national reunification and called South Korea “the enemy”. Aged 42, he is a spoilt child subject to no control or supervision. After he ordered the murder of his elder brother and his uncle, no-one dares to challenge him.

Did it have to be like this? No – in 2002, Kim’s father Kim Jong-il had the most ambitious economic idea since North Korea was founded in 1948. He approved a Special Economic Zone in the northwestern city of Sinuiju, across the Yalu River from Dandong in Liaoning province.

Jong-il had frequently visited China and seen the success of its SEZs, and how Beijing had combined rapid economic growth while retaining its single-party Marxist-Leninist system.

Since 1948, North Korea had followed a system of Juche (主體), self-reliance, based on the original Soviet and Chinese models. The country should make as much as possible of what it consumed and minimise foreign trade and the need for foreign currency. In trade, use barter, not money.

This system worked as long as the Soviet Union and China had planned economies. Then China started to reform and the Soviet Union collapsed in 1991. Both switched to a market system. North Korea made few products that were competitive in the world market.

Between 1994 and 1998, between 240,000 and three million North Koreans died of hunger. The need for reform was urgent.

Jong-il’s idea was the same as that of Shenzhen and Zhuhai – put the SEZ on the border where you could seal it from the rest of the country and implement policies unique to that area. Since he could not select a city close to the highly militarised border with South Korea, Sinuiju was the best choice.

Who was to manage this new project? No North Korean had the necessary skills. Many South Koreans did, but they were out of the question. Isolated from the world, Jong-il knew few candidates.

Then he thought of Yang Bin, a Chinese entrepreneur, who had pioneered modern agricultural techniques in a large area called Holland Village in Shenyang, capital of Liaoning. He had studied these techniques in Holland in the early 1990s and became a Dutch citizen.

Spotting an opportunity, Yang and a North Korean partner built a greenhouse on 1.5 hectares of land in a district of Pyongyang to supply the city with vegetables. He brought experts from Holland and Australia to discuss setting up vineyards, wine factories and beef farms. No foreign businessman had ever done such a thing in North Korea.

Jong-il discussed with Yang his plan for an SEZ. Yang said that, to succeed, it had to be managed by foreigners and governed under a system of “one country, two systems”, like Hong Kong and Macao. The North Korean government quickly passed a law allowing this.

On September 23 2002, Kim appointed Yang the director of the new SEZ in a ceremony in the grand “Hall of Ten Thousand Years” in Pyongyang.

The next day Yang held a news conference to give details of his new zone. It was the most remarkable news event held in North Korea since 1945. Most of the existing city of Sinuiju would be demolished.

Of the 15 members of the cabinet that would run the SEZ, eight would be foreigners. There would be separation of powers between the judicial, the executive and the legislative branches. Foreigners could enter without a visa. The U.S. dollar would be the main currency, with the renminbi, the yen and other currencies allowed – but not the North Korean won.

“Could the head of the police be an American?” one foreign journalist asked. Yang replied: “why not?” The audience gasped.

That afternoon the journalist asked a Xinhua reporter resident in Pyongyang if he was proud that a Chinese would head this new project.

“No, he is a 流氓 (liumang, a hooligan),” he replied. “The first we heard of this was in the North Korean newspapers. Why did Kim and Yang not consult with the Chinese government first?”

The next day Yang took his entourage and foreign journalists around Sinuiju. As he walked through the city, he explained in broad terms what the new city would look life – similar to Shenzhen.
But two weeks later, in the early morning before daylight, police surrounded the villa in Shenyang where Yang lived and arrested him.

On July 14, 2003, the Middle People’s Court in Shenyang sentenced Yang to 18 years in prison for tax evasion, bribery, misuse of land and other charges. As he entered prison, the SEZ he was to lead died with him.

In a restaurant opposite the courthouse, his staff were seated around a table after the verdicts; their heads were in their hands.

One of his secretaries was weeping: “this is a tragic day. The only hope for North Korea is economic reform, following China’s example and raising its people out of poverty. The Koreans are disciplined and hard-working, as we see in the South. Now this project will not happen. The only path it will follow now is nuclear weapons – a tragedy for the Korean people and the world.”

History has proved him correct.

It is unclear why Beijing torpedoed the zone – perhaps it did not think Yang a proper candidate: it was angry at not being consulted over such an important project in which Chinese people and capital would play a key role: or it did not want a piece of “foreign territory” next to its territory, like the foreign concessions (租界) before World War Two.

We must wait for the future to provide the answer.

Mark O'Neill

A Hong Kong-based writer, teacher and speaker.