Preparing For a Post-Kim Future in North Korea

A commentary by Andrei Lankov
2014.08.04
nk-schoolchildren-july-2013.jpg North Korean school children stand on a bridge at the Kumsusan Palace of the Sun mausoleum for late North Korean leaders Kim Il Sung and Kim Jong Il, in Pyongyang, July 25, 2013.
AFP

We cannot predict the future, and most attempts at prophesying have ended in spectacular failure.

Nonetheless, I would dare to suggest that there is a pretty good chance the Kim dynasty will one day collapse in North Korea—pretty much like similar regimes collapsed in Eastern Europe a quarter century ago.

If this is to happen, how can the average North Korean prepare for the post-Kim future? How can they ensure that the regime collapse will not adversely affect them?

It is difficult to prepare for a post-Kim future even if you have money.  Firstly, only a handful of North Koreans have enough money, and secondly, there is almost no way to invest money in this country.

Perhaps it is real estate that provides the only realistic option for investment.

Theoretically, North Korean law does not recognize private property rights. All land and almost all housing in the country belong to the state. However, the sale of residency rights has nevertheless become quite common in the last twenty years.

One can of course argue that residency rights are distinct from actual property rights, but in the former Soviet Union, officially recognized residents usually had little trouble transferring their residency into ownership.  

Post-Kim North Korea is unlikely to be much different.

Admittedly, most North Korean housing is really in not good shape. Thus, depreciation is likely to take a toll on nearly all buildings in present-day North Korea.

However, if this is to be the case, residents of the buildings are likely to receive rather generous compensation. Hence, real estate investment makes solid business sense—especially if we are talking about real estate in Pyongyang and other major cities.

Now a good house or apartment in Pyongyang would cost tens of thousands of dollars—not a small amount of money, but in post-Kim future it is likely to yield much greater profit.

'Social capital'

However, it seems to be a better strategy still to invest in ‘social capital’, or put more simply, the education of the younger generation.

The experience of post-communist Eastern Europe has shown clearly: People who fair best under the new system are either officials of the old regime or young educated people with valuable skills.

In post-communist Russia and Eastern Europe, it is largely engineers, IT specialists and accountants—often together with former party officials and secret police officials—who are successful in the new post-socialist system.

Most of such people are young, but there are exceptions like my father-in-law, a construction engineer in his mid-70s.

He suddenly discovered about 10 years ago that his skills are in great demand in new Russia, so he is now enjoying a lifestyle and level of creative freedom impossible under the old system.

Admittedly, it took some time before professionals and engineers in the former Soviet Union recovered from the initial shock that was inflicted upon them by the disintegration of the state socialist economy: the first post-Soviet decades were tough for the professionals, too.

But by now it is clear: People with education weathered the storm much better than their less educated compatriots.

'Education will pay off'

There is little doubt that similar things will also be applicable to post-Kim North Korean society, whenever it arises and whatever shape it takes.

Education will pay off—of course, not an education in Juche philosophy or on the ‘revolutionary history’ of the Kim family members—education in subjects like engineering, mathematics, hard sciences, computers, and even economics and finances (although economists and accountants will probably have to undergo a very thorough retraining).

Thus educating one’s children may be the best investment strategy available for North Koreans and, unlike investment in real estate, it does not require the really large amount of money which would be well beyond the average person’s reach.

It seems that the North Koreans now understand the value of education quite well.

The last decade saw the emergence of a private tutoring industry in the North as well as a great upsurge of enthusiasm for college and university admissions.

This is a good trend that should be further encouraged as much as possible. With or without the Kims, education is an investment that is likely to pay off well and this is, perhaps, the only investment North Koreans can afford to make now.

Andrei Lankov, a professor at Kookmin University in Seoul, is a Russian historian, North Korea expert, and regular RFA contributor.

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