North Korea eager to emulate Vietnam's economic growth experience

27, Feb. 2019

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By Tomoyuki Tachikawa

HANOI, Kyodo - North Korean leader Kim Jong Un, who has recently pledged to build a “powerful socialist economy,” is eager to follow Vietnam as a good example of economic development, diplomatic experts say.

The United States has also expressed hope that North Korea's economy will grow like that of Vietnam after denuclearization, with President Donald Trump saying it has potential to become an “economic powerhouse” and achieve a “bright future.”

Trump and Kim are scheduled to hold their second summit for two days through Thursday in the Vietnamese capital Hanoi.

Vietnam, a socialist nation, has successfully bolstered its economy by promoting a wide-ranging package of market-oriented reforms in the late 1980s and 1990s, called “doi moi,” while deepening security ties with the United States.

Hanoi-based forces fought a bloody war with the U.S.-backed South Vietnamese government that ended with Vietnam's unification under Communist Party rule in 1975.

For North Korea, which remains technically at war with the United States, the Vietnamese growth model would “definitely help” the country, a diplomat in Beijing said.

In 1986, the Vietnamese government began implementing the doi moi policy, including measures to increase exports and boost foreign direct investment, after the nation's productivity plunged as a result of accepting the Soviet-style socialist economic system.

As economic sanctions, imposed by Western countries such the United States, decelerated the pace of industrialization at home, Vietnam also suffered from food shortages.

In the wake of the doi moi policy, many companies of Japan, South Korea and other nations have started to set up their production bases in Vietnam, whose labor cost is cheap. The United States has become a major trading partner for the Southeast Asian country.

“Vietnam's development record over the past 30 years is remarkable,” the World Bank said in a report, adding, “Vietnam's economy is performing well, propelled by the sustained global recovery and continued domestic reforms.”

For five years since 2014, the Vietnamese economy has annually grown more than 6 percent and it is forecast to expand by 6.8 percent in 2019, the Asian Development Bank said.

In the center of Hanoi, high-rise buildings are prevalent, with shops along main streets displaying bags and clothes imported from the United States and Europe as well as roads full of luxury cars and motorbikes. Chic cafes are lining up in an alley.

“Vietnam is still a communist dictatorship. Kim Jong Un must believe that if he emulates Vietnam, he can lay the foundation for economic prosperity in North Korea while maintaining its hereditary dictatorship,” the diplomat from an Asian nation said.

Pyongyang and Hanoi have retained friendly relations. In the Vietnam War, some countries including China and North Korea fought with North Vietnam, which was then under the leadership of Ho Chi Minh, against the U.S.-supported South Vietnamese government.

After the war, China-Vietnam ties worsened and they were engaged in a short but bloody border conflict in 1979.

In more recent years, Vietnam has had disputes with China over islands and reefs in the South China Sea, leading it to strengthen security cooperation with the United States.

“In light of the once-unimaginable prosperity and partnership we have with Vietnam today, I have a message for Chairman Kim Jong Un,” U.S. Secretary of State Mike Pompeo said at a business community reception in Hanoi in July last year.

“President Trump believes your country can replicate this path. It's yours if you'll seize the moment. The miracle could be yours; it can be your miracle in North Korea as well,” Pompeo added.

Trump also said after his first summit with Kim in June 2018 in Singapore, “We dream of a future where all Koreans can live together in harmony, where families are reunited and hopes are reborn, and where the light of peace chases away the darkness of war.”

“This bright future” is within reach, he said.

A person familiar with the situation in Pyongyang said, “North Korea feels sympathy with Vietnam. It is natural for Kim Jong Un to try to follow Vietnam.”

North Korea's economy is considered to be sluggish due largely to international economic sanctions aimed at preventing Pyongyang from pursuing ballistic missiles and nuclear weapons programs.

While committing to discontinuing nuclear and intercontinental ballistic missile tests, Kim promised to revitalize North Korea's economy since early 2018. For that purpose, he has been serious about getting the United States to ease the sanctions, the person said.

But China, North Korea's major economic and political ally, would not allow Pyongyang to be “Vietnamized,” a source close to the matter said.

“China is willing to take great initiative on economic development in North Korea. It is now concerned that North Korea will get closer to the United States like Vietnam,” he said.

In March last year, Kim traveled to Beijing in his first foreign trip since becoming North Korea's supreme leader following the death of his father Kim Jong Il in late 2011. He has visited China a total of four times to hold talks with President Xi Jinping.

Although Beijing and Pyongyang appear to be in a good relationship, Kim, in reality, “doesn't trust” China, the source said. (Kyodo)