These days North Korea is heading for a major retreat, back to Military Communism. Only those elements of market economy which are necessary to keep the country afloat are being preserved. The economic policy of partial liberalisation, which started in July 2002 waned in mid-2005, and is now a history. The old patterns of central economic planning, public distribution system, and strictly controlled market activity are back in place. This might be surprising to those who expected from North Korea to open up and become a transitional economy, but its current economic policy attests to the contrary.
In late 2007, active anti-market actions were launched in the DPRK when its top leader’s ill health became apparent. This was the time when Kim Jong-il’s brother in law, Chang Sun-taek, was promoted to the newly created post of First Vice-Director of the ruling Korean Workers’ Party, with oversight responsibility for the police, judiciary, and other areas of internal security. He visited the border area with China to “clean up” smuggling and speculation, and issued a special instruction tightening the regulations relevant to free markets elsewhere in the country. These and other measures were consistent with the opinion that a conservative group in the North Korean leadership was victorious.