North Korea hints at reform with new PM

In the middle of an escalating military crisis on the Korean peninsula, North Korea's appointment this week of an economic reformer as its new premier struck a discordant, and possibly optimistic note. The promotion of Pak Pong-Ju, 74, is notable not only for the fact that he has served as prime minister before, but also because he was sacked from the post in a backlash against the economic reforms he spearheaded. His re-appointment is therefore being interpreted as a possible indication that North Korea's new, young leader Kim Jong-Un is serious about turning around the North's moribund economy. When Kim's father, Kim Jong-Il, died in December 2011 he left a country in dire economic straits -- the result of a "military first" policy that fed an ambitious missile and nuclear programme at the expense of a malnourished population. Some observers initially saw a glimmer of reformist hope in his Swiss-educated heir who, soon after he took over, made several public statements on the need to improve living standards. Instead, Kim Jong-Un has followed his father's military lead, overseeing a long-range rocket launch and a third atomic test, and engaging in an intense bout of global brinkmanship that has included threatening the US with nuclear attack. On Wednesday, the North showed the priority of military over economic strategy as it blocked access to South Koreans working in the Kaesong joint industrial complex -- a key hard currency earner for Pyongyang. But analysts note that along with all the bellicose rhetoric, Kim has continued to stress the need for economic development, albeit with little or no details about how it might best be achieved. Kim presided over a meeting Sunday of the ruling party's top leadership which formulated a "new strategic line" of simultaneous economic and nuclear weapons development. State media touted this as an organic progression from Kim Jong-Il's military-first strategy and clearly attributed it to the "steadfast will" of Kim Jong-Un. Where, if anywhere, it will lead is still unclear, but Pak's appointment could be viewed as an attempt to give the economic side of the dual policy some weight and credibility. A senior South Korean government official on Tuesday cited the selection of a premier "with an economic background" as a sign of North Korea's "willingness to engage" in genuine economic development. "But whether it's really a good sign is something we have yet to see," the official said in a briefing for foreign reporters. Jeung Young-Tae, an analyst at the Korea Institute for National Unification in Seoul, said Pak's promotion might only be symbolic, "but it's a symbol that mirrors the need for economic construction" outlined at the party meeting. "It suggests, albeit to a limited degree, that the North may be wanting to create a more efficient internal economic system," Jeung said. Pak, who previously served as prime minister from 2003-07, is best known as the architect of Chinese-style market reform measures issued a year before he assumed office. The measures envisaged changes in food distribution and price-fixing mechanisms and more autonomy for state enterprises. As premier, Pak was responsible for pushing these reforms, which prompted the emergence and spread of private markets. But influential officials in the party and military viewed such reforms as a threat, and a backlash ensued which included a disastrous, inflationary currency reform intended to wipe out the profits of the new private traders. Pak was suspended from duty in June 2006, sacked the following year and, according to some reports, was sent to manage a clothing factory outside Pyongyang. His rehabilitation actually began under Kim Jong-Il, when in 2010 state media announced his appointment to the ruling Workers' Party Central Committee. Jeung suggested that Pak's experience in the wilderness may well have curbed his reformist zeal. "It certainly won't be easy for him to advocate the same sort of dramatic economic reforms that may jeopardise his political standing again," Jeung said. Dramatic reform is precisely what North Korea needs to address the poverty that afflicts the vast majority of its population. Last month, the UN resident coordinator in North Korea, Desiree Jongsma, said two-thirds of its 24 million population were chronically food insecure and nearly 28 percent of children under five were stunted from malnutrition.