Kim Jong-un (left) inspecting the construction site of the Munsu Swimming Complex in Pyongyang. Photo: CFP" src="http://www.globaltimes.cn/Portals/0/attachment/2011/ebfdfa11-f00a-4785-9266-814f94401dc0.jpeg" />

The picture released by the Korean Central News Agency on September 18 shows Kim Jong-un (left) inspecting the construction site of the Munsu Swimming Complex in Pyongyang. Photo: CFP

For North Korea, a country known for its military-first policy, it is fairly unusual to hear a high-ranking official stating that the socialist country is shifting its focus to the economy.

In late September, Ri Yong-ho, North Korea's vice foreign minister and chief delegate to the Six-Party Talks, said at a closed-door forum that North Korea's top leader has made the economy a priority, the Seoul-based Yonhap News Agency reported.

"First Secretary Kim Jong-un is currently putting his top priority on the economy," Ri was quoted by a diplomatic source as saying at the forum organized to mark the 10th anniversary of the launch of the Six-Party Talks, according to Yonhap.

"Recently, about 90 percent of field-guidance activities by First Secretary Kim (Jong-un) were related to the economy," Ri said.

This seems to fit with Kim's promise to make a "radical turnaround" in the economy this year to raise the living standards of North Koreans, made in his televised New Year address at the beginning of 2013, the first such broadcast in 19 years.

Also, Pak Pong-ju, an economic reformist who was reportedly sacked in 2007 due to his reform of the wage system, was rehabilitated in April as premier of the country.

However, experts remain divided over the country's economic shift.

Change in the air

Zhang Huizhi, a professor with Northeast Asian Studies College at Jilin University, said that the country's late leader Kim Jong-il had already made it a strategy to focus on developing the economy.

In fact, a joint 2007 New Year editorial by three leading North Korean publications, which serves as an indicator of the country's direction in the year, emphasized a shift to economic development.

"That year was a turning point," Zhang told the Global Times.

When Kim Jong-un took office in 2011, a stable economy was definitely crucial to ensuring Pyongyang's political stability during the power shift.

As Kim lived in the West for a long time and witnessed its development path, he shows a different leadership style that pays more attention to people's livelihoods and also wants the emphasis on the economy to build up his own authority, Zhang said.

In July, South Korea's central bank said that the North's economy achieved a second year of growth in 2012, up by 1.3 percent, as nearly all sectors saw improvement, Reuters reported. It witnessed a growth of 0.8 percent in its moribund economy in 2011.

"The livelihoods of people in the capital Pyongyang has notably improved in recent years," Cheng Weidan, a Chinese journalist stationed in Pyongyang, told the Global Times, though the UN said in March that two-thirds of the nation's 24 million people still suffer from food shortages.

Gloomy prospects

However, Pyongyang's rocket launch in December 2012 and third nuclear test in February seem to have done little to bolster its economic drive, instead flaring up tensions on the Korean Peninsula and resulting in a series of sanctions.

A Chinese businessman surnamed Li, who trades in large equipment and raw materials with North Korea, told the Global Times that this year's trade programs have not worked well, and the neighboring country is in dire need of foreign exchange.

Living in Dandong, a city on the Chinese border with North Korea, Li said that Pyongyang has greatly increased its quota for coal exports to China, as it relies on exports of its resources, mainly coal, to gain foreign exchange that pays for essential products from other countries and regions. The quota was around 8 million tons for the first half of this year, he said.

But due to factors such as the drop in coal prices in China, these exports have not earned enough foreign currency, while several financial institutions have been blacklisted as a punishment for North Korea's nuclear test. At the same time, a majority of the foreign exchange was spent on military development, which meant that spending on the economy actually dropped, Li said.

"North Korea's increasing costs for the nuclear tests and missile launch have in fact pulled back its economy," Lü Chao, a Korean expert at the Liao-

ning Academy of Social Sciences, told the Global Times, noting that to judge whether Pyongyang is shifting its focus, it is important to see if there have been any reforms to its system and economic policies.

"The resumption of the Kaesong Industrial Complex and acceptance of international business norms, more specific legal and institutional realignment for foreign direct investment, and more visible implementation of the July 1, 2002 reform measures (such as profit incentives, activation of market exchange, and reform of major macro-economic policies) can be seen as signs of its economic reform," Moon Chung-in, an expert on Korean economy at the Seoul-based Yunsei University, told the Global Times via e-mail.

However, the country's economic policies have so far shown no "noticeable changes," Lü said.

Taking action

North Korea believes nuclear deterrence is necessary to ensure a safe environment for its economic development while trying to counterbalance South Korea and the US in terms of military power, Zhang said.

Despite Pyongyang's threat on October 5 that it would not give up its nuclear weapons unless the US ends its hostility toward the country first, the US, South Korea and Japan held joint naval drills days later in waters around the Korean Peninsula, Yonhap reported.

"He (Kim Jong-un) cannot accelerate North Korea's economic development without getting external economic assistance. And it seems highly unlikely to get external assistance while showing provocative behavior such as missile and nuclear tests," Moon said.

The best option for the North Korean leadership is to put a moratorium on missile and nuclear tests, show restraint in its military behavior, and reactivate and participate in the Six-Party Talks, Moon added.