Jim Lobe

WASHINGTON, Dec 27 2005 (IPS) — Growing indications that North Korea’s central government is reasserting its control over the national economy may be strengthening hardliners in the administration of U.S. President George W. Bush who have long favoured a policy of “regime change” in Pyongyang.

In recent months, the government of Leader Kim Jong Il has reportedly revived rationing and rolled back market reforms whose adoption was encouraged by the country’s two closest allies, China and South Korea. Particularly effective was the creation of private food markets that boosted incomes in rural households.

But the government has now not only banned free-market sales of food grains but also plans to end deliveries of food aid from non-governmental organisations (NGOs) and the World Food Programme (WFP) that require as a condition of their work independent monitoring of their distribution across the country.

The Bush administration, which has taken a series of measures in recent weeks to increase pressure on North Korea’s economy, responded by canceling a scheduled grain shipment that, like most of its food aid to Pyongyang, is delivered through the WFP.

The latest moves come amid an apparent stalemate in the so-called “Six-Party Talks”, which include North and South Korea, China, Russia, Japan and the U.S, following an accord in September that North Korea will abandon its nuclear-weapons programme in exchange for certain diplomatic and economic rewards, including help with the future construction of nuclear power plants.

No sooner was the accord inked, however, than Washington and Pyongyang began arguing over the sequencing of the quid pro quo, and the Bush administration announced new moves designed to shut down North Korea’s illicit trade in drugs, cigarettes, weapons, and counterfeit U.S. dollars, which has reportedly provided the regime with hundreds of millions of dollars each year.

These moves appeared to mark the resurgence of the administration’s Korea hawks, led by Vice Pres. Dick Cheney and by the State Department’s top arms control aide, Robert Joseph. They come after the White House reportedly rejected repeated efforts through the fall by Washington’s main Six-Party negotiator, Assistant Secretary of State for Asian and Pacific Affairs Christopher Hill, to arrange bilateral meetings with his North Korean counterparts.

And earlier this month, Washington’s new ambassador in Seoul, Alexander “Sandy” Vershbow, delivered a speech that, among other things, compared Kim to Adolf Hitler and his ruling Workers Party to an “organised crime family”, and labeled his regime “a criminal state”.

While some analysts characterised his remarks as an attempt to inoculate himself from criticism by administration hardliners, most experts saw them as further evidence that, after six months of “engagement”, Washington had given up on the Six-Party process. “U.S. hardliners grab North Korea policy reins” headlined the Financial Times last week.

These moves appear to have strengthened hardliners in Pyongyang, which Tuesday warned that it was ready to withdraw form the Six-Party process. “The actions the U.S. is taking against North Korea go against its obligations and the spirit of the joint statement made at the fourth round of the talks in Beijing,” a North Korean “diplomatic source” told the Interfax news agency.

“At the negotiating table, the U.S is acting like it is really trying to resolve Korea’s nuclear problem, but behind our backs they take measures aimed at disrupting the negotiations, creating economic difficulties for North Korea,” the source added.

But the source’s warnings also come amid what is seen as a more general rise in influence of hardliners in Pyongyang, as indicated by the rollback of market-oriented reforms, particularly in the agricultural sector.

The reform process was launched in the mid-1990s after the collapse of the North’s economy resulting from the dissolution of its major donor, the Soviet Union, and a series of floods and droughts that resulted in a devastating famine believed to have killed as many as one million of the country’s 23 million people.

While Pyongyang had previously relied primarily on the Soviet Union and China for food aid, it appealed for help to the wider international community in 1995. In doing so, it effectively agreed to the presence of dozens foreign independent and NGO monitors to ensure that the aid was delivered to those who needed it most.

At the same time, it authorised farmers to grow and sell their own food in private markets, a mechanism that both spurred production but also, absent an effective distribution system, increased rural incomes at the expense of urban workers, according to a recent article by University of California professor Stephan Haggard and Marcus Noland, a senior fellow at the Washington-based Institute for International Economics (IIE).

Their article, published last week in the International Herald Tribune, argues that the result is rising discontent in the cities, where unemployment has mushroomed as reforms have forced the closure of some industries. They cite a sense on the government’s part that it must reassert control – by reviving food rationing, banning the private grain trade, ending U.N.- and NGO-monitored food aid and distribution, and seizing grain supplies from farmers to prevent hoarding or black marketeering.

While last year’s relatively bountiful harvest and existing food stocks, swollen by international food aid that has fed as much as a third of the population in recent years, may give the government confidence that these steps will not cause undue hardship, according to Haggard and Noland, that may only be true in the short term.

“A revival of the failed socialist model would not only mark a U-turn in North Korea’s reforms, but would also set the stage for a recurrence of humanitarian problems in the future,” according to the two authors, who argue that maintaining the WFP’s programme in North Korea is critical to the country’s food security and reform efforts.

At the same time, the rollback of reforms is likely to bolster the position of the hawks within the Bush administration that the regime cannot be reformed and must be brought down, presumably through a strategy of economic pressure on which the hardliners are already embarked.