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(Yonhap Interview) N. Korea's Kim Jong-un may bring more reforms in coming years: Swiss businessman

All Headlines 07:00 June 13, 2013

By Park Bo-ram

SEOUL, June 13 (Yonhap) -- Under its Western-educated young leader Kim Jong-un, North Korea is likely to bring changes to revive its moribund economy, a longtime Swiss resident-businessman in the reclusive communist country said Thursday.

North Korea's consumer industry has been developing fast since Kim assumed power in late 2011 and shifted his focus to the light industry, said Felix Abt in an interview with Yonhap News Agency.

"I believe we'll see more changes in the next two years," said the 58-year-old businessman who lived in North Korea from 2002-9. He was in Seoul to speak at a security forum.

Abt was a North Korea resident director of ABB, a Swiss-based power and automation group, and founded the European Business Association, a de facto European chamber of commerce in Pyongyang, during his stay there.

Abt said he now sees clear signs in the North of economic development and reform efforts, suggesting that the country may follow China's strategy of pursuing economic growth while still maintaining the communist political system.

"The leader tries to strengthen the civilian sector (and) takes some power away from the army to prepare for possible reforms. There has been changes in the leadership, more civilians, pro-reform people and some military were replaced, and more businesses were transferred from the army away to the civilian sector," he said. "These are the first signs toward reform."

Now the country allows local plants to keep the surplus above the state quota, sell them in the market for profit and share the profit with their workers, he said, adding that the "market-oriented moves" remind him of early stages of China's economic development.

Adding to the North's efforts for economic rejuvenation will be more exposure to the outside world as well as management skills, the businessman said, referring to his experience of running a business management school in the isolated country.

The businessman said he in 2004 established Pyongyang Business School in the namesake capital backed by sponsors mainly from Europe. But a lack of finance led to the suspension of the sole business-only education institution in 2010 as European sponsors shied away from the project following the North's internationally condemned nuclear weapons test in 2006.

"In the beginning of the course, there were concerns that this could possibly challenge the political system, bringing in undesirable capitalistic ideology," but he was able to gain permission from the regime as he stressed that the school was "to provide pure technical knowledge and that this knowledge is necessary for enterprises regardless of political system," said Abt who now lives in Vietnam.

About 120 North Koreans, mostly senior-level government officials and state company executives, were educated at the school, he said.

Marketing, finance, market research, advertisement and procurement were mainly taught as well as how to deal with foreign customers, he said. "All the things they had to learn, and they learned very fast."

Abt said he had found that the new knowledge led to improved productivity and sales at some companies.

More exposure to the outside world would help bring them prosperity and even peace, he said.

"They need more business exposure; they have to know more about what's going on in the rest of the world. When they see that, they will quickly learn and be ready to adopt, copy and apply it to their own environment," he said.

"It's good that ... there has been a change since Kim Jong-un took power that more companies could travel and do business with the outside world which broadens their minds and views," he said. "The more they can see and observe other people, the more they learn .. and the economy will grow and there will be less hunger problems and (they will) become more peaceful."

Abt also suggested that the outside world may have to make some compromises on the North's nuclear programs, allowing the country to keep some nuclear weapons in order to have international peace.

North Korea considers nuclear weapons as the "only deterrent" because its other conventional weapons are too outdated and ineffective, he said.

Therefore, "the international community will have to make compromise in the end and leave them a few nuclear weapons and control not to produce more," he said, adding that that should be a starting point for the U.S. and South Korea to normalize relations and sign a peace treaty with the North.


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