Pacific Affairs

Pacific Affairs: An International Review of Asia and the Pacific

Volume 77, No. 2


North Korean Reform and Opening: Dual Strategy and 'Silli (Practical) Socialism
By Young Chul Chung



On 1 July 2002, North Korea proclaimed the adoption of a new reform policy for 'Economic Management Improvement' (7.1 policy), North Korea is now in a transitional process shifting from 'reform within the system' to 'reform of the system.' It is clear that North Korea will be tied with the 'capitalist world economy' with a 'strategy for living together with capitalists.' North Korea named all this change as 'silli (practical) socialism.' North Korean reform has a 'dual strategy.' One face is the coexistence of planning and market on the grounds of the partial introduction of the capitalist economic system; the other is the solidification of the traditional socialist system such as 'Juche.' This 'dual strategy' is not an economic structure such as 'dual economy' but rather a set of political policies. On the other hand, the 'reform within the system' implies a change in the system with respect to its efficiency, but while this system seeks 'technological efficiency', the 'reform of the system' seeks 'allotment efficiency.' The '7.1 policy' shows that North Korea has taken the step into 'reform of the system' (which seeks efficiency), as opposed to 'reform of the system' (that would include change of the system). However, Juche and Silli could as easily contradict each other as complement each other. At this point, as the '7.1 policy' is the 'product of pain,' its continued management might involve a 'continuation of pain.'