REFORMS OF THE NORTH-KOREAN ECONOMY - REQUIREMENTS, PLANS AND HOPES

Unabated discussions are under way in academic circles of possible ref orms in the DPRK, reforms understood to be the dismantling of the old totalitarian-command socialist distribution system, followed by a tran sformation of the political system. Three types of reforms of socialis m are distinguished: the East European as the most radical, the Soviet one leaving power effectually in the hands of former partocrats who a re, however, compelled to use democratic rhetoric, and the Chinese lea ving power in the hands of Communists but granting freedom to individu al economic initiative. Common in the social direction of all these va riants is the strengthening of economic power by creation of a market. private property and a stable middle class. Understood as such, there are no-and cannot be-reforms in the DPRK since any steps in the direc tion of private property and political openness there are fraught with serious threats to the position of the political elite. Nevertheless political reforms already began in the late 70s and they have been on their way through several stages. Their purposes and contents differ r adically, however, from those of the reforms of European and Asian soc ialism. The purpose of economic reforms in the DPRK is not to create a middle class but to safeguard economic security for the ruling elite and meet its consumer needs in the foreign market. Reforms in the DPRK started with the establishment of a ''royal court economy,'' a specia l sector with particularly extensive rights and powers in the implemen tation of its financial, production and foreign trade transactions, ac countable directly to the higher Party leadership, and well isolated f rom the mainstream economy of the DPRK. Limited reforms in the DPRK ar e being implemented without propaganda and ideological formulas so bel oved by the press, but they are not meant to cover the entire economy. By meeting, to a certain extent, ''urgent'' needs for goods in short supply and solving everyday life problems of the ruling elite, the cou rt economy happens also to be exhausting raw materials and power resou rces, creating financial and social causes for widespread corruption a nd foreign exchange abuses in society. Even so, it is the bridge linki ng the DPRK internal economy with the world market, as well as enablin g the world community to influence economic lite in North Korea. It is through cooperation with the court economy firms at the turn of 1992- 1993 that it proved possible to drag Russian-Korean relations out ot a deep crisis and begin to establish new. market-based principles of co operation between Moscow and Pyongyang that have replaced those old pa rty bureaucratic principles of cooperation that fell along with the di sintegration of the USSR.