North Korea may choose to follow Vietnam’s economic model as it looks to open up
The Southeast Asian nation’s gradual path to development is intrinsically appealing to Kim, Fitch Solutions said in a January report.
Vietnam began receiving assistance from the International Monetary Fund and the World Bank in the 1990s after it began enacting reforms. That was followed by significant foreign investment in the mid-2000s and membership to the World Trade Organization in 2007.
Kim is a fan of small-scale reforms and would prefer this slow approach to economic rewards if it ensures political stability, Fitch said.
Another major attraction is how Vietnam has maintained “geopolitical flexibility and relationship-building” — two qualities that “are likely to be admired” by Pyongyang, Fitch added.
One instance is that Hanoi enjoys close ties with Washington despite stark ideological differences and decades of hostility during the Vietnam War. The Asian nation has also managed to cultivate ties with many countries, including both Koreas, Russia, Japan and India.
Given their respective emphasis on political stability, China and Singapore have also been touted as potential role models for Pyongyang, but both “have their disadvantages in the eyes of North Korean leader Kim Jong Un,” Fitch said.
North Korea wishes to emphasize its independence from, rather than subordination, to Beijing, Fitch stated.
Singapore “may also be unsuitable for Pyongyang, because it is a small city-state, whereas North Korea has 25 million people and is heavily mountainous and rural,” analysts at Fitch said.
Of course, any North Korean attempt at liberalization will depend on the progress of ongoing nuclear negotiations. If Kim makes good on his promise to denuclearize, sanctions could be lifted, paving the way for Pyongyang to resume foreign trade.
The lifting of sanctions, coupled with economic reforms and changes in national security policy and international relations, “could help put the North Korean economy on a path of stable growth and economic integration,” Babson said.