popular refrain about the North Korean economy is that it is reverting to a command-andcontrol economy in the face of sanctions and pandemic isolation. An example is a Washington
Post article from February, which claimed Kim Jong Un “turned his back on even modest
economic and market reforms and reverted back to de facto Leninism, emphasizing central
planning while trying to clamp down on the private entrepreneurial activity.” This claim
reflects a misunderstanding of its current economic policy. Actually, Kim Jong Un’s economic
reforms emphasizing markets and competition are continuing.
Kim’s major change in North Korea’s economic policy was to encourage competition.
Previously, the Democratic People’s Republic of Korea’s (DPRK) production unit was
responsible for only executing the production targets required by the country. Through a
constitutional amendment in 2019, North Korea abolished the “Taean [alternative] Work
System,” the doctrine of economic management of business in the era of a command-based
controlled economy, and instead adopted “the socialist corporate responsible management
system.” The new system gave companies actual management rights, creating an environment
in which substantial competition could occur. In the last few years, competition has been
greatly emphasized and institutionalized throughout North Korea’s economy, and has reached
the point where it is increasingly the consumers, rather than the state, that carry out corporate
evaluation. As North Korea institutionalizes and protects the pursuit of profits as the principle
of economic activity, firms strive to actively reflect residents’ demands and manufacture
products that “can be sold.”
There is no sign that these reforms were rolled back after Kim demanded “the state’s unified
guidance” over economic work in the Eighth Party Congress in January 2021. North Korean
media, including the Rodong Sinmun, has not mentioned market control since the Eighth
Congress of the Workers’ Party of Korea (WPK). A February video of Hyesan, a city on the
border between North Korea and China, shows North Koreans are still engaged in economic
activities in the market, not only in officially sanctioned markets but also in unofficial business
transactions. This continued activity underscores that Kim’s statement was not about
suppressing competitive markets and putting the economy under strict planning and control.
i. Discuss “property ownership” and “motivational factors” features/characteristics of a
command economic system.
ii. Explain the Islamic view on the two features mentioned in part (i) above.
iii. In the article above, it is stated that “Kim’s major change in North Korea’s economic policy was to encourage competition”. Explain why the North Korean regime would want to encourage competition.
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