Economic Changes in North Korea?

The New York Times and others are reporting on recent changes coming from North Korea:

Since July, various news reports in South Korea have quoted anonymous sources in the North as saying that Mr. Kim planned to give factories and collective farms incentives aimed at increasing productivity. The state would let farmers keep 30 percent of their yield, the reports said; until now, it is believed that they could sell only a surplus beyond a government-set quota, which was rarely met. Factories would choose what to produce and how to market their wares, splitting any profits with the state and paying their own workers.

It is difficult to make much of these sorts of changes (and despite a strong interest in North Korean economics, my reading of the tea leaves is about as random as anyone else’s). When we look in a black box, we cannot expect to completely understand its levers, and North Korea is about as closed of a box as can possibly exist.

Nonetheless, it is clear that the North faces many disparate issues that are converging to make the leadership concerned. Economic sanctions, heavy flooding, low industrial output, the collapse of the Kaesong Industrial Complex, etc. are all putting renewed pressure on the regime. Perhaps the survival instinct will begin to inch the regime forward.