the obama administration's rollout of the law. he said that administration officials intentionally obscured details to enable passage by congress in 2010. also testimony from centers for medicare and medicaid services center live tomorrow at 9:30 eastern here on c-span3. secretary of state john kerry testifies before the senate foreign relations committee about combating isis. and possible new authorization for the use of military force. our live coverage begins at 2:00 p.m. eastern on c-span3. and wednesday the house elect committee on benghazi hears from assistant secretary of state for diplomatic security greg starr, and state department general steve len knock. that hearing starts at 10:00 a.m. eastern wednesday live on c-span3. tonight on the communicators, kim zeter on what she calls the world's first

weapon, a computer virus used to sabotage iran's nuclear program. >> this was a virus designed to physically destroy something. in the past we've seen malware that steals passwords, credit card numbers, things like that, but we've never seen something that was designed to destroy, at least leap out of the digital world into the physical realm and have some kind of kinetic activity. that's one thing that made it unique. it was really sophisticated. it was, as i mentioned, it's designed to increase and slow the speed of the centrifuges. while it was doing that, it also did this remarkable trick, which was to make the operators at the plant think that the operations were perfectly normal. so what it did is it recorded normal activity on the computers first, and then it played back that normal activity to the monitoring machines when it was actually doing the sabotage.

>> tonight at 8:00 eastern on "the communicators" on c-span2. next, foreign policy experts and journalists discuss north korea, touching on the north korean economy, nuclear program, and its generational divide when it comes to consumerism. from the wilson center in washington, this is 1 hour 40 minutes. i think i'll get this started. welcome back, everyone. i'm christian osterman. i direct the history and public policy program here at the center, which includes our north korea documentation project that we're very proud of, and has

been at the heart of much of the korea programming that we have been doing. we're delighted now to welcome you to this panel on marketization, social change, and the impact of the korean wave in north korea. as the first panel of our 2014 wilson center washington forum, let me just, before i turn the mic over to the chair of the session, say how deeply grateful we are to the university and the institute for far eastern studies, as well as the university of north korean studies for the partnership that we've had for now 80 years. we started this in 2006.

on a very small basis. and this has grown into really a flourishing partnership on the history of our relationship. but also well beyond that, on the political relevance of the materials and the history that we've been uncovering. i think it's one of the things that sets the wilson center's korea programming apart, is that we have had for these many years a steadfast partner in kim yung university. we're consulting on really a weekly basis with our partners on activities, on conferences and publications. and i hope many of you will take advantage of some of the materials that are on the table outside. really at the heart of this relationship has been ambassador

sun, who really inspired this partnership, inspired some of our most important conferences. on the u.s.-korea relationship. those materials are available and we're just about to public the next volume in the series. ambassador sun is a chair professor at the university of north korean studies. and also currently the vice president and ceo of the united nations association for the republic of korea. he served as vice minister of foreign affairs and trade, deputy there foreign minister for trade, and south korea's ambassador to the united nations, switzerland, and czechoslovakia in the good old cold war days. it's a pleasure to welcome him

to the center, back to the center as the center's -- one of the center's global fellows, and a friend -- dear friend of ours here, part of the wilson center family. so ambassador sun, you have the floor. >> thank you very much, christian. it is an honor for me to preside over this important session of the marketization, the impact of the wave in north korea. many changes are taking place in north korea in many areas, both in positive and negative ways. today we will divert our discussions from the usual

military and security, and even human rights aspect of the north korean issue, instead we will concentrate on the social aspect of the north korean issues. in the absence of the rationing system, which i think it was in 2000, the marketplaces have proliferated as the place for interactions of agricultural producers, and marginizers, and also for the interaction of the north korean people in information exchanges, and knowledge exchanges, in the international currency

exchanges. actually, the north korean regimen seems to be in a catch-22 situation in terms of controlling the marketization, which is now spreading, expanding so rapidly. and then in the ability of allowing the marketplaces which has become the lifeline of north korean people. another social phenomenon is that the north korean people nowadays are having more and more access to the south korea's pop culture. and even newscasts. by dvd, radio, and television, and even usb, even at the cost

of being caught and punished. and 2.4 million units of mobile phones have been reportedly supplied to the north korean people, and the number will continue to increase. so at this session, we will examine how these social phenomena will affect the political and social transformation of north korean people. now, one of the questions before us is whether the survival of the north korean regimen would be compatible with the unstoppable, inevitable marketization of north korea. so now we have three

distinguished speakers. dr. jinwook choi, a person of the korea institute for national unification. and dr. hyeong jung park, senior research fellow, and director of the center for north korean studi studies. and dr. gwi-nam noh, at the moment the director of the asian microsocial institute. for the details of the bios of these three speakers, i refer you to the p folders. these speakers will each have 20 minutes, so we will have some time for useful discussions,

interactions between the podium and the audience. so having said this, now i would like to invite dr. gjinwook cho. >> thank you. i'm glad to be here again at this building. this is my third time to this room. and i'm very honored to discuss marketization in north korea with these scholars. nowadays marketization is one of the key words to describe north korea. we used to discuss it maybe a decade ago, and now we changed our topic from reform to marketization. it's much less controversial. so still it's very controversial, but it's much

less controversial than we used to discuss it in the open. today i would like to discuss three major topics. the view of -- the historical view of the marketization, and thei the implications. let me start with the marketization. marketization can be divided into three stages. the first stage is from mid 1990s to 2002. many state companies were shut down. workers barely sustained themselves by working in markets. this stage of marketization was not intended nor recommended by the regime. this was only seven or eight

years. the second stage was from 2002 to 2010. this stage can be called marketization by deport. north korea decided to bring marketization into the system, or into the institutions. that was in 2002. the so-called july 4th improvement measure was to justify and endorse what has already taken place in north korea. north korea tried to encourage more competition, and was decentralized the process and allow more power to make products and decide prices. so in this period of time there have been ups and downs in marketization. north korea has opened to the

market, whenever it felt marketization may cause civility in north korea. stability is always the most important concern. and north korea -- and sometimes marketization has been suppressed. in 2009 it was political marketization. the third was from 2012 to now. this period of time can be called marketization by political will. maurk's marketization entered a new phase in 2010. this was affected by two factors. the current push of the market and the foreign currencies by the state. the former economy has grown during the last one or two decades and accounts for up to

60% of north korea's gdp. the household income accounts up to 75% of the total household income. so this was a tremendous increase during the last two or three years. the foreign market became an integral part of the economy. north korea learned lessons from past experience on hour dangerous it is to enter a market by this way. since 2008, [ inaudible ] -- put pressure on the market to attract resources nor the

present market. they were constructing apartments, and ski resorts, and selling motors, at home and abroad. above all, construction. particularly apartment building has special implications. people living in undeveloped countries like north korea tend to be fascinated by high-rise and modern buildings. and it is a dream to live in apartmen apartments. carrying on construction projects is an excellent way of showing off the --

[ inaudible ] -- let me move to social marketization. social impact. so there are three aspects of social impact over marketization. marketization has changed in north korea. in the past, when the state set up space plants for the cities, it is now the preference of the private sector holders. for example, they can select the construction site, and they can

choose the style of apartments, and also the interior of the apartments, and so on. and also, apartments were upgraded and the price of a single apartment can be over $100,000, and $330,000 in other cities. so this price continues to be rising now. private capital changes, dividing the rich and poor, and al also -- [ inaudible ]. second aspect is emergence of new innovation. it's grown up in a market economy. parents of younger generation are working in the markets. so this young generation, after

school they have much more open experience. they usually gather in the market where their parents are working. and they can exchange information from outside. and they can have much more access to the outside world. so also, they have much less rigid, because they are not trained in organization. and so they are very free. so they have different perceptions and ideas toward the regime and the outside world. the third aspect of the marketization is the current system. the regime is very flexible in marketization. they don't control

marketization, but they control over social much tighter than the previous government. so we can maybe misunderstand that, with the social control. but actually, social control is much more rigid, and principled than before. but the control of the market is much more flexible. then we move on to political impact. this marketization has important implications. it will stay in one position for a long time. they say it should stay in one position for ten years. particularly in the political committee. kpa is the chief of staff and people's armed forces was more

than six years under kim jong-il. kim jong-il stayed in the same position for 15 years. however, it was a long tenure. it is not the case anymore under the kim jong-un regime. kim jong-un has shuffled the powerless. some say this is the sign of the increase of the regime. some say this is the sign of the strength of the regime. but i think it is a sign of strength of his regime. because he can -- the shuffling of the political elite means that he can secure his own economic power, economic interest by removing the economic interest of the power

elites. most power elites have economic connections. they can provide so-called economic license, and also they can support or provide aid to businessmen. this kind of connection with businessmen, and a strong power to provide license, by using this power, he can secure his own leverage to have control over the power elite. so this kind of a reshuffling can provide kim jong-un more room to support his -- he's a new leader, his new power elite.

and his power can cultivate it. the second political implication is improving daily lives of ordinary people. what does this mean. so he said that -- kim jong said his policies can be characterized by simultaneous development of nuclear weapons, and improving daily lives of people. marketization cannot expand without consumption power of people. and the kim jong-un regime insisted to improve the daily lives of ordinary people. he contributes to the power base by promoting public support to the regime. this contrast to the kim jong-un region, it was preoccupied with taking care of power elites, while improving people's lives.

when kim jong-il was in power, he was only focused on the power elites and he seemed to be, even though the ordinary people's lives -- the quality of life, but kim jong-un is emphasizing the quality of ordinary people's lives, and he's like in his grandfather's image rather than his father's image. he says he's taking care of ordinary people. but this has very important positive implications. because he doesn't have his own power base when he became the leader. because he doesn't have to take care of his own people, and only he needs to do is he can -- he needs to dismantle the current

power structure. so when he -- this has important political meaning. [ inaudible ]. maybe his own companies, and so on. p after his uncle's execution, kim jong-un endured a lot of new resources to -- that can be distributed to the new leaders. so this has very important political and economic implications.

in the nuclear power, but i think kim jong can take very aggressive marketization of policies, because he has nuclear power. so he's proud in his nuclear power, and he's emphasized the nuclear power, and it's not negotiable. based on that confidence, he can push marketization farther. so we may think of that as north korea proceeds, and makes progress in marketization. he can change the system, and effect on the elections that may contribute to north korea's dismantlement of the nuclear weapons. but i think it might be the

opposite, because as long as north korea has nuclear weapons, they can be confident in marketization. but if they don't have a nuclear weapon, they might be much less competent in the marketization. so this is ironic. north korea's leaders strongly believe that these two policies, nuclearization and marketization can go in the same direction, not the opposite direction. the second aspect i want to discuss is political stability. marketization was one of the major factors that can explain how north korea survived such an economic hardship. a dramatic increase in private

farming, and the marketization for those markets may help prevent famine despite the food import. the close connection between political power and economic power can be a cause of political instability. however, power organizations and the power elites in the military are fighting over economic interests, which is -- [ inaudible ]. the people had to improve their positions, but they didn't change. but people experienced the

exchange of gunfire. if they lose their company, they lose their -- maybe they risk their life. the last one is competitiveivity between the market and the state. marketization seems to strengthen rather than weaken. however, it is not supported by the institution and the rule regulations. kim jong-un regime is expected to expand the market, continuously, despite potential side effects. however, markets cannot continue to expand without reform. so now it is too early to make a conclusion. because the marketization is now still -- it still goes on.

it can expand. marketization can go on, but at a certain point in time it may move to the positive direction or the negative direction. it depends on how the policy will be. if they successfully reform the economic policy, it might be successful. and they might -- the economy can keep growing. but if they fail, the economy may collapse. so that's my conclusion. thank you. >> thank you. [ applause ] >> thank you very much. now invite the next speaker.

>> we have translation devices over there. >> translator: this is actually the simplified version of what's taking place in north korea. for you to understand north korea, you first have to realize what the north korean economy means, how it was before. the basic characterization of north korea is as follows. let's start off with the market economy that we know of, and then also look at capitalism. and then later, to the socialist

economy. and what we have in north korea is actually a mixture of all these three different types of economy. market economy, capitalism and socialist commanded economy. so this is something that the americans have not seen before. and so when it's a marketization of the three different economies, you can only see that this can be complicated. [ speaking foreign language ]

>> translator: also, we can say the activities in north korea is to gain profits. there is a market for labor in north korea, but it's distorted. and also, there is a private means of production in north korea. but it's illegal. so -- and north korea -- we say north korea is no more socialist economy. in 2010, two years ago, north korea abolished planned diocese. north korea is no more planned

economy. planned economy is different. in many developing countries, many developing countries have huge sectors. yes. we must understand this point. yes, i used the term concept capitalism. it gives opportunities by political decisions. usually when we understand the market economy, we think about competitive capitalism. in this capitalism, the opportunities are distributed by competitiveness in the market. productivity and innovation. in this economy, if you gain profit, if you own profit, you must be encouraged of your productivity and you must be innovative. in this economy, in order to gain profit, you must have good political connections. you must invest in political

connections. in order to survive in this capitalism. and i would like to introduce a case. there is a factory run by a police station. this company is very prosperous. shows profit. how does this factory gain profit. it's very important. the policemen go to the electricity distribution station in north korea. the electricity must be distributed to certain factories. and the policemen go to the electricity distribution station and demand that all the other factories, the electricity must be cut.

so there is only one factory in a town run by the police station. so this factory is prosperous, huge profits. so this is political capitalism. this means that if you have more power, you have more opportunities to own profits. and if you are important organization, then you can get more opportunities, you get more licenses to own profits. next, you usually hear that in north korea, markets emerge. ordinary people took part in the market transactions in the '90s

and 2000s. but i talk about commercialism from above. the markets were driven by kim jong-il. how? kim jong-il, he has been the most important driver of commercial activities expansion since the 1970s. how? i have said that this is capitalism. only the more powerful, then someone is more powerful, he or she is more free to take part in market activities. if you take part in the commercial activities is a huge privilege. you must have political power. to take part in -- to have license in taking part in commercial activities. and only kim jong-il in the '70s

could have privilege to take part in commercial activities. how? generations by the party in the 1970s, kim jong-il was designated successor. he must show his ability, that he has some -- that he can distribute presents to the people, that he can build buildings in north korea. you know how kim jong-il used the bmw to his lieutenant. and kim jong-il also distributed

all the school clothes to the students in north korea. he needed money to show that he has the ability, competency as a successor. and he needed money. and yes, but depending on the official command of the economy, on the official budget. in the 1970s, kim jong-il established the bureau 39. and used the party organization to mobilize people, to gather mushroo mushrooms, gold and silver in the 1970s. only kim jong-il could do this, because he was the most

powerful. and he could only take part in this kind of commercial business. and the party organization, the local party organization was the adviser to mobilize people, and mobilize the people to gather mushrooms and et cetera. in the 1980s, the power organization took part in the commercial activities. here you see the president's house, the office of the presidential security, the protection of the state security. the most important power organizations for survivors takes part in the commercial activities. how? they usually -- each of them carry out the large-scale public work without assistance from the

economy to generate money on their own. here a youth festival in 1989. the youth organization headed y by -- they would like to own foreign currency, and support the world youth festival. and in the latter part of the 1980s, there's a huge construction mobilization in pyongyang. from that time on, they get huge moneys from kim jong-il. and the commercial activities by the agencies in the 1990s, we have seen that the first kim jong-il first taking part in the commercial activities, and in the 1980s, the power

organizations, the military, security organizations, and so on, took part in the commercial activities. and in the 1990s, all public organizations took part in commercial activities. in the 1990s, it collapsed. the central budget has collapsed. they get no more salary from the state. the policeman must own his own salary through his own job. the policeman -- the police security -- the public prosecution house does not get budget from the state. they must earn their own salary through prosecution work. and the military got no more budget from the state. they must earn their own budget.

so the agencies had to own their own expenditure, for their engagement in commercial activity. almost all political organizations established commercial companies, and hired cash-rich organizations. this is political capitalism. and there is a hierarchy of commercial activities. how? kim jong-il distributes business licenses. conflict management among lieutenants. he distributes trade licenses, especially trade licenses to the regiment organizations. and the second tier is trade companies run by agencies, for

political protection for the businesses, management of the revenue. for example, in the case of the military, in the 1990s, the military got the most -- the biggest part of the trade licenses from kim jong-il. because in the 1990s, the military was the most important organization for regiment survivors. so kim jong-il distributes trade licenses according to the importance of the organizations for regiment survivor. and in the military, there is different organizations, for example, minister of armed forc forces, and each organization

establishes its own commercial company. there's very strong compartmentalization. in the middle, there are several organizations, departments, and each department establishes its own trading companies. and they don't -- there's no -- we can say, there's no one military activities. there are many independent military activities. the most important item for export is minerals, seafood, and so on. the center companies establishes local offices. and local offices collects

natural products, and manage distribution channels and private enterprises. this is a combination of public and private. the soldiers, or the officers don't have any commercial talents. they must hire civilians who have money, and who have commercial talents. so even if the military unit establishes a trade company, this -- and manage this company, the company must be run by civilians, civilian merchants. and usually the military unit gives the military title to the civilian merchants. for example, a civil merchant

gets a title, some rank -- i don't know exactly the military titles, but he carries out his commercial activities as an official military activity. and there are producers. gathering seafood and mushrooms, gathering animal skins, silver, gold, et cetera. it's hi it's hierarchy cal. it's about the major trade companies. almost every higher organizations of the commercial

companies are certifying expenditures. the ministers have been bigger and more predatory than others. the amal ga mags, the public and private. only public organizations can get licenses for foreign trades and commercial business. but they have no commercial talent. they hire the merchants, giving them the status of political officials. they pay a certain amount of bribe money to the private employee. otherwise they are free in their commercial activities, can keep the profits, enjoy protection,

and emphasize public authority as a public official. they enjoy national information. they have cell phones. and they call each other in local cities. and they exchange information about how the rise of price should be, how the exchange rate should be. so there's equalization in north korea. and private entrepreneurs. the production, collection and distribution of many private organizations. small private firms are subsidiaries of public organizations, including trading agencies, state agencies. and i've said that due to that fact, they must have the official title that it is part

of the police station organization. in some cases, defunct state firms are revived as private ma private forms by infusion of private and commercialal oent. they produce not only for the export of companies -- export companies, but, also, for local markt. small, private firms have spraed e spread into various types of businesses, including transportation and are provided with complex network of labor division, real estate dealing and increasing competition. and the producers. yes? there are producers on the bottom. yes, this is a picture. the search kept this on the top. there's kim jong-il according to

the importance of the organization for survivors. and there's a very strong competition, rent competition. if the military gets more licenses, then the party must get less because there's a zero sum economy. so economists even deducing the size in the times. so it's a zero sum economy. and military gets more assistance than the party, much less, is a very strong competition and horizontal representation. the military -- yes. inside the military, the military, there is a top organization military. they distribute tar gets in

balance to lower units. and lower units pay $6. this is a basic structure. and this is inside the trading company. there is a trade company. they have a local branch and the local branch is production-based. and the production base is composed of small, private firm. if you go woabove, then the strongest is the gratification. if you go down, then the strongest is the coordination. there's no -- in this economy, productivity is not important. you must have good political connection. you must invest in political connection. otherwise, you are wiped out by others. if we have more preparers of political connection. and there is a weak institution,

weak property rise. rampant production. there is a property in north korea, but it's not legal. there are many contracts, but if you have contracts -- if you reichcontract, you must threaten him. if you don't pay back, i kill you. it's a simple solution. and as a producer, my official gatherer is up to many. there's primary goods production-oriented economy. and in the economy, economy crisis, regulates who will be the next -- will you be rich? economy competition. will you be rich?

and there is economy stagnation. many inefficient companies are wiped out. but in this economy, this regulation must be done faithfully. here, relocation of monopolies. he must wipe out in order to have spaces for other participants. and construct of other related measures. use of exemplary state violence in the intensifying server against the anti-social tsunami. this is regulating who will be used. this is done particularly. yeah, in the free-market economy, the productivity decides who will be reached. economic stagnation wipes out the efficient forms.

but in north korea, it must be politically done. yes. this is the relocation of monopolies means perched. some people must be purged. yes. thank you. >> thank you very much. if you allow one minute for checking the technical problem of our translation system. >> i'm glad to meet you. in korea, i speak in korea.

>> translator: for the marketization and changes in north korea, there has been some changes in north korea and the basic framework is between different generations that we have in north korea. i would like to actually have a conceptual generation in north korea. there is something called chang madame, which is the markt mechanism in north korea. this has been in place for about 20 years by now. and this which is a market economy for north korea is an economy that is outside of the planned economy of the socialist

regime that north korea was. there is a new generation. those who were born perhaps sometime after the 1970s and who have grown up watching these take place and so their parent generation were a generation of distributi distribution and rations. so they received these subsidies from the planned economy. but the news generation have not actually received any rations or distribution from the government or the governing regime. so they have actually not seen a socialistic regime at work. they actually do not have as much loyalty to the regime. what they have seen is their mom and dad working in these markt economies and producing income from these market economies.

so these are two different generations. so the story of two different people in north korea. there is a hypothetical person in my story. let's say there's a guy named don ju who is 34 years old in north korea. how does this guy go about establishing himself as a businessman? and as i study north korea, north korea does have a market economy. but the market economy is different in the minds of the different generations. the turning point for a market economy is 1983, in my mind. there was a girl named suga

sugam ling. she was wearing a pair of jeans and a white t-shirt. actually, many people were quiet surprised. in fact, young people were surprised to see this female college student from south korea. and she may have been the first in the korean wave in north korea back in the early '80s. and so this su young refers to south korean fashions. south korean capitalism and south korean youth. and that had actually had a far-reaching impact in the minds of north koreans. and so if you wanted to understand the mind set of a entrepreneur universitt, you ap

from that perspective that north koreans see something from south korea. and it becomes a part of the north koreans. so i don't think north korean youth is taking on everything that is coming from south korea as something that is legitimate and worthy of following it. but there are certain things that is striking the code and minds of these north korean youth. and these are the new generation who are not used to d socithe socialist regime of north korea in the old days. and as we -- there is a talent. her name is song heg yo. she is a famous talent actress in south korea.

and if you put her picture on any product, such as a mirror or some consumer product, north koreans come to realize it's much better. so this is in a way a markting. so any product you put her picture on, it turns into more of a prized item and become a lottery good as e and trusting as the phenomenon. it just goes to show you that for new general ragstions, the people,it's not just the utility that any item provides, but the idea behind is that something can be marketed now. something that can be given a higher standards merely because it was associated with something better. such as an actress. so in my writing, id give you an

analogy of a young man and his mother. and the mother works in the market and she is selling fried goods in the market. and the son brings friends to see mom. and mom gets really up set at the son. now that the son has brought these kids with him at the market, she had to give some of this food to the son and his friends and thereby not being able to sell the fried goods for herself. so she felt that the son should not come to the market because she cannot sell all the of her fried goods. that's one aspect. another aspect is that the son, actually, has, after growing up,

gone into the military. and in the military, he becomes in charge of selling certain products. and by selling these products at a higher, competitive prices, that he's able to realize the certain profits. so this is a different way of looking at the profit. different way of looking at the profit. so the parents generation have limited resources. and these resources are being sold for the son and his generation. it's not the limited resources. but the come ppetitive means, t ways of selling the idea and, again, item, that's what's more important. so you can see even from my

little story, people are looking at opportunities from dichbt ways. so this is where the similarities are becoming more clear. the different generations are approaching row sources. the markt. and market activities from different perspectives. earlier, we heard about the currency exchange that's taking place in north korea. it's actually known as currency reform in south korea. this was actually a shock to

people who were immersed in the market economy of north korea. because up until then, people traded using both foreign currencies, such as the chinese yen and the north korean one. so they were used interchangeably. but after the currency reform, people came to realize that the north korean one was very weak and that the one is not a very reliable currency. so it actually became a point where the north koreans beca distrustful of the government's activities. and the north korean one was no longer a prized currency.

in fact, people decided it's better to hold on to the american dollars than the chinese u.n. because they felt e felt that those currencies would be much more stable into the future, rather than the north korean one. so we can see that the merchants, the private people are smart. they can actually study their own system. in fact, they come to distrust any planning or any reformation activities when it comes to economy. so we see that there is no planned economy at all in north korea. merchants and private citizens

are going to provide. if you relied on the leader to provide these things to you, you will die of hunger because there is none coming your way. people are getting smarter and smarter. because they've been exposed to the markt economy and because they have been exposed to the market capitalism that has been exposed to north korea by necessity. and this was, in order for people to survive.

>> we see that a lot of people are engaged in trade activities. we see rather than old people. >> now we see more young people allows us to come to the border area. for some, you need to cross the border. we can see that these youchk people are dressed better. and they are much smarter. and they communicate with chinese people well. many of these young people actually were former students to china. they understand the market economy. the they speak chinese and they understand what can be gotten

fwr the market economies. there are many people like that now, especially with the young people. with these young people, providing the impetus will change from north korea. i can only see that there will be more change es to come internally within north korea. obvious, there should be more studies into these topics in the future. >> i would like to open the floor to any questions or comments which should be brief, as brief as possible. and i would collect all the

questions first and then let the speakers answer in relevant weighs. now, the floor is open. >> thank you. i'm a visiting scholar at the wilson center. and my question, i have two questions and one is for professor chai. you mentioned about the markt -- how supported the marketization in the 1990s. i wonder if there's any changes in the system. were there any text exemption? or do they text newly emerging capital. also, my second question is for professor pak.

it's about -- oh, yeah. you mentioned how the north korean economy was internally zero sum economy depending on the political application of resources. but it also participated in international trade and were creating any learning effects regarding the improving efficiency of its economy or how it felt e felt with market forces. thank you very much. thank you very much. any other questions? >> thank you. i'm ian reinhardt. thank you for the three wonderful presentations. i have a brief comment. it seems to me that the kind of economic system you describe reminds me strongly of maybe

europe in sort of the dark ages or the middle ages. it's sort of a feudal system, right, that that economy were a political power equals economic power. and i'd be curious to hear your reaction to that. my main question is the system you described wonderfully through the presentation has having come out of kim jong-il's rise to power. do you see that basically as the same system that's operating now is this is that a description of the present circumstance? or was your presentation mostly about the kind of transition of the north korean economy. thank you. >> thank you very much. i enjoyed very much your presentations. i'm with the american sharing movement. i have two questions. if i could. one is the talk about the

military environment and activities sounds a lot like what china went through. in 1990s, beginning early 1990s, from what i remember hearing, when the military budget started being cut, the military in china started getting deep involvement in the activities. the industry was huge. it was getting into all kinds of activities. i wondered, when you mentioned about this military environment starting in the 1990s, i'm sure it was driven by what was happening inside north korea, but i wonder if there was any indication that they were learning from whavs happening in china? the second part is -- my second question is in north korea, i understand that it's not just a

private sharing of these businesses. from what i have heard, is that they actually can -- the second stage of these activities is that they can actually buy and sell the rights to an enterprise. or the rights to a production activities. and then when one person gets out of favor or for whatever reason, doesn't want to continue that, that e than he or she can actually sell that license. i'm sure that profit-sharing scheme that goes through the structure would continue. but when you mention the weakened institutional power, but these activities, even buying and selling the rights to the enterprise, rights to the

private sharing scheme in anyway can be useviewed as a form of institutional develop. . thank you very much. >> i will exceed one more question and let a speaker answer. and then, after that, if we still have the time, then another round of q&a. one more question. >> for dr. park. the concentration on primary commodities, as you call them, is that rooted toet abysmal mystery of production and basic resources of farming and material yal goods? or is it related to some other factors. and, if so, could you identify them? >> all right.

i would like to invite dr. ch, iai to respond? >> it's not really taxing because, for example, when they cell phones, mobile phones, they buy $200 and they get $1200s. they can get benefit there. it's kind of profit sharing. it's not shared by, you know, the state and the holders. so this is not exactly taxing, but it's kind of taxing, i think.

>> yes, i am inspired by a general social. one part of social yity is to immortalize the premortal system. i wonder through many literature in order to understand the not-korean system. and i found that the analysis was very inspiring. the physical system or taxation system, or so. and i also very much inspire edy their own premodern korean text system. the e dynasty.

in lands owned by the king. in north korea, there is a certain amount of licenses. and these licenses are distributed to powerful regime agencies. and all properties are officially owned by the state. and the text system was incorporated in the best of north korea. the socialist economy incoroneted certain, yes, text system, we could say. but in the 1990s, the socialist economy has collapsed. and, also, the tech system has collapsed. and from other -- in the 199 0es, we can say kim jong-il

distributes frad ristrade rises demands that you must pay debt. this is a certain kind of tech system, but it is not leeltly binding. and there is no systematic tech system. and ordinary people constantly demand demand demanded so much e some money. a fact ri must send workers they must send some materials to consider the ski resort.

the tech some e system, we can say, is very habitual. and there is no legally binding political system. the economy is stagnating. and the north korean economy is basically primary export country. yet, for example, russia is suffering from downfall of oil prices. and, also, the 1980s, what north korea could export is primary goods. and fisheries.

and, also, forced product. you had to connect only certain amount of fishery. you can connect from old work. world economy. you must introduce technology. you must adapt to the foreign markets. but if you are primary goods export country, you don't have to run from the world economy. yes. kim jong-il presents or gives a certain amount of trade

allowance to armed forces. and the military distributes sub units. divides to the sub units. he can say his licenses if he can pay back some amount of money. but it's illegal. by it's -- everybody does the same. so as she says that this is we can say formation of institutions. and in north korea, the market has developed by itself, by is own dynamics. and we can observe that the institutioner in er i institutional system has developed autonomously without protection, without the guarantee of legality.

the system evolves autonomously. it's very precarious because there's no guarantee. and at any time the political power can intervene, and disturb the system. >> what was presented today was the bagsic structure of what i have presented there is the same. but the problem is that because the top leader has changed, the power structure must be changed. the power structure -- the change of power structure means that the distribution of licenses must with changed.

so during the transition, kim jong-il has been removed. >> so ki >> so kim jong-un has to change the power structure because of their economic power. so this process is very big traditional from wuj group of people to the other. so in this case, there is crimination. corruption is kind of ironically

construct corruption. if there's no corruption in north korea, they can't make a business. so the people in different power, they have power to distribute, you know, economic license. so in this case, they have to stay in one position for a short period of time. if they stay longer, their power can be. this is the process which can i want jong-un has to change. so this is a whole soet just moving from a traditional

speerps. so this is a different aspect of the system. so we have to get that system carefully. so why he offers. sometimes they demoted and promoted and they're back to their position flthree position later. and that process is not meaningful. into this process, they lose their jobs. but they, in this process, they lose their old right to provide licenses.

he looks set, but his pocket is empty. >> translator: actually, you started the north korean system quite a bit when it comes to taxation. if the government was not able to tax, how is the government able to thrive at the budget status needed. and i looked at the example of china and tried to learn what north koreans may have learned from the chinese experience in the earlier days when china was

poor and unable to provide for the public facilities, the public facilities, themselves, for example, the public library, the library would actually engage in commercial activities. and the library would allow, for example, the cafeteria to be ran within the library. or to allow for certain books to be loaned out at price. so the public library was able to stay afloet. even though there was no subsidy or the su fort from the central government. and the same applies to the north korean appliance who would be engaged in commercial

activities within the vicinity of the public entity. and there is sort of a business process to engauge in commercial activities within certain privacies and areas. so i don't know if you can really call that a taxation. but it is, in a way, a tax to the 350e78 who are yut liez iin the facilities and public entities. so this is not something that you would find in a terks book of the tax code of north korea. you will but this is how the taxation system works. this is how these public enties are able to survive. otherwise, without any subsidy or support from the central government, how are these public

entities to survive. and they come up with these ways. some ingenius to survive and stay afloat. >> i found many cases in indonesia. what differentiates is that all took part in commercial activities.

>> we may accept one or two questions. >> today, since china is the biggest trading parter in of others in korea. i'm just wondering how much reliant north korea is at the current moment with china's economy. and how much is china influencing market-change process in north korea. after the fall, was there any change in the common trade relations between north korea and china? >> okay. thank you. the final question sdm yes, over there. thank you.

>> when it comes to long distance transaction from delivering your package or long distance money transfer, which is burgeoning in north korea. so thanks to this information technology development, there is a permitted trust building among people in north korea.

although, you could limit it to marketability. >> so absolutely no more questions? thank you, yes. thank you very much. so any speakers? >> i think it's tremendous. it happens to many countries. i think north korea is very progressive in the marketization. but i think it's very, very tough.

social countries are never lacked at all. >> yeah? okay. >> nowadays, about 80% of the trading is done with china. the main trading partner has been china.

and i suppose in the first part of markts development, the chinese version plays a big role ine iing commercial activities in north korea. i suppose basically, the market development in north korea is done -- carried out on most of it. if you're done -- yes, if you look at any interpretation in the world, all interpretation is based on markt economy.

but this market economy is stagnant. all of the dictatorship that can develop manufacturing, china, south korea, taiwan, singapore, vietnam, all of these countries have developed manufacturing. and only manufacture iing or yed economy. we also have seen it's originated from this developmented. but if you look at it, the oriented economy, there is no

democracy. if you look at russia. if you look at countries in center asia, all the economies are based on markt transactions. and market can be embedded in any kinds of political system. but only market have produced prosperity and have produced a higher level of trust in the society.

>> well, thank you very much. thank all of you in the audience for your participation. the session i is completed. thank you. [ applause ]

it is accepted by enough and >> this was a virus that was designed to physically destroy something. we see malware that steals passwords, credit card numbers, something like that.

but we've never seen something that was designed to physically destroy -- essentially leap out of the digital world to the physical realm. other than that, it was really sophisticated. as i mentioned, it's designed to increase and slow the speed of senter fujs. but, while it was doing that, it also did this remarkable trick which was to make the operators at the plant to think it was perfectly normal. so what it did, it played back that normal activity to the monitoring machines when it was actually doing the sabotage. >> tonight, at 8:00 eastern on the communicators on c-span2. >> here are a few of the comments we've received from our viewers. >> i want to compliment c-span

on being able to bring together two different ideologies like they did this morning. i think you need more programming that way and people can concept themselves with the very civil tone. and i applaud you for that. ideology can be overcome to reach a common ground. and i think that there should be more programming to that end. >> i find it to be very informative. it's a very good look in all of our different politicians so that citizens can understand exactly who we elect and what's being done in congress because it seems to be that congress is undecided or always fighting. it's important that the citizens

have a nice out let for them to see the proceedings that go on. so i appreciate c-span. and regardless of whether or not it's popular, i just want them to know especially with young people, particular my me, i'm 17, that i watch c-span to understand what's happening in my country because i truly do care. thank you. >> "american history" tour starting with the battle of little big horn. i just watched it in its entirety. it's priceless. >> so many peoples of the world do not understand them own selves. but if they watch american history, they can see themselves in america and why we're such a great and wonderful nation.

>> continue to let us know what you think about the programs you're watching. call us at 20 -626-3400. or you can send us a tweet at c-span hash tag comments. >> next, a look at how the media covers north korea. it's just over an hour and ten min ts. >> good afternoon, everyone. i'm james person, deputy director of the history and public policy program here at the wilson center. i want to thank you for joining us this afternoon for a panel

discussion on the challenges, pitfalls and problems of reporting on such a secretive state as north korea. north korea's long posed a unique set of challenges to those trying to decipher what's going on inside. this is a problem that reel rea goes back decades. the wilson center gathers the diplomatic report of north korea's former communist allies. and these are papers of the former communist-blocked diplomats that were based and that we're writing. we do this for a couple of reasons. number one, we do it to advance our historical knowledge. but we also do it to get a better understanding of the sources of north korean conduct and to identify done or to

really help to inform policy. but the thing with these documents is that there's a reoccurring theme in many of them. and that's, you know, you have these former communist diplomats writing in north korea from their embassies. and they're all talking about, you know, the difficulty of gathering information. north korea intentionally kept even its allies, its fraternal communist allies in the dark. 5:00 and, you know, it was incredibly difficult informing their foreign ministry what was going on in the country with domestic politics or foreign relations or economic developments. i was talking to one former east german ambassador. and he likened it to you pick up

pebbles here and there and assemble it and try to, you know, and hope that sort of a mosaic of some sorts or a picture emerges. so there are real challenges. and the good thing for these form former communist diplomats are they have ways of getting around this. ways of get e dealing with their isolation and the challenges of getting information. they had each other. they shared notes with one another. so we have reports, then, where you have ambassadors that are meeting regularly and describing the contents of their meetings with north korean officials and they're describing what they've observed and their interpretations. this is something that makes the job of a historian working on north korea today much easier.

i don't envy journalists because they don't have the benefit of writing on diplomatic issues when dealing with copntemporary issues. unlike the diplomats who were, nonetheless, ice lasolated, yous fraternal or ied logical allies. what this means, then, is that you were perceived as being, you know, from hostile nations which, you know, of course, presents a major challenge. the other challenge is, as a historian, while they compared notes with one another, i get the sense that, you know, from journalists, because of the competition to get scoops on north korea, you don't really

compare noets a whole lot. so, correct me if i'm wrong. but so there's a real challenge then. you have a country that's enshrouded in this thick cloud. how do you mind that cloud for stories? and how do you do that credibly and responsively. so to help us look at some of these challenges of reporting on north korea, we have, like, a great or a stellar panel of journalists and analysts of north korea. we have jean lee who is the former bureau chief for the associated press. she opened the bureau in pyang yung. she is the alicia paerson foundation fellow. we have paul eckert for thomas

and reuters who spent over 20 years working on korea and japan. on east asia. we have chad o'carroll who is the director and founder of nk news. we have mr. ikang duk, or kang duk lee who is the washington correspondent for the korean broadcasting system, kbs. and we have dr. supko shin who is the washington correspondent for the daily newspaper. we're going to start -- i'm going to ask each of you to, in three or four minutes, just make an opening statement describing what you think are the -- how you perceive these -- what are, for you, the greatest challenges to reporting, to it writing on north korea. so what -- you know, what are the challenges, the pitfalls and

the problems then, rourti irepo north korea. j jean? >> well, first, i'd like to commend the university and the wilson center for including this topic in today's forum.today's . i imagine most of us here today either disseminate information about neurologic or get information about north korea. so it's good to step back and look at the coverage. so i'll just make a couple of points to keep in mind as we carry out this discussion. i would just like to say that i am -- i can't under estimate the impact that the internet has had on coverage in general in journalism. i'm old enough to remember the day when i worked at a newspaper and we had one deadline at the end of the day, so we had all day to work on a story to confirm information.

that's certainly not the case today in this 24 hour news cycle with cable tv and internet and smartphones where everyone expects to get the news that very moment. site doesn't leave us a whole lot of time to verify information. so sometimes some of the accuracy comes at the expense of demand and speed in today's environment. there's the rise of citizen journalism. the emergence of online blogs so anybody with a computer and internet access can become an expert on a topic or call themselves a journalist sometimes without the training and understanding of ethics and standards that come when you do an apprenticeship in traditional journalism. so we're seeing a slipping of standards in journalism today. and i should remind you that journalism is a business. the pressure these days, especially with the internet, people expecting to get information for free is

sometimes very high on journalists to entertain rather than educate because to be frank, entertainment brings in a lot more money than stories that educate. so this is something that we face as well when it comes to demand and the type of news that sells. and now, of course, all these challenges that we're facing in being a journalist today is compounded when it comes to north korea with the very basic challenge of access on north korea. on top of these demands from duce 24 hours news around the clock we got the basic problem of getting into north korea. the freedom house think tank publishes a global survey on press freedom, and north korea comes in every year at the very bottom. this is an incredibly difficult country to get into. over the past six years since i've been posted at asia there have been four official media

junkets to north korea, maybe five. so very few opportunities for foreign correspondents to get into the country legally, i should say. and so that's the basic problem of access so that does make it very difficult for us. on top of that the north korean regime and government has not produced or published statistics. it makes it extremely difficult for us to obtain information and verify information and sometimes we just don't have the time or the resources. some journalists just don't take the time or have the resources to follow up on some of those details to provide the kind of accurate reporting that i think is really important in coverage of north korea. so in any case, i hope you can keep some of those points in mind and we can also discuss what he c what he can do, how you as readers should look at this information critically and what you can do to help journalists understand the country and

provide better coverage. >> thanks, jean. paul. >> thank you, jean for kicking us off. i want to commend the wilson center's archival project. it's not current events. if you were interested in following the pattern how north korea was working even back in the late '50s early ooe 6'60s o nuclear capability, documents are there. some patterns of behavior that repeat themselves. jean hit the nail on the head on a lot of issues facing journalism in general and foreign journalism i won't repeat but maybe expound. the news hole for north korea is small unless it misbehaves dramatically or somebody crazy shows up there like dennis rodman or there's a celebrity aspect which, you know, seems, to me lamentable after doing

scholarly work on north korea and that's the driver. in a business sense eyeballs are eyeballs and maybe in the larger humanitarian sense, more attention to north korea is a good thing in the long run. i don't know. the jury is still out on that. the access issue, of course, drives you crazy because i have not exclusively but i've covered north korea off and on since the early '90s. i got my start in journalism out in tokyo and if you're working for a news agency in japan in the '90s before south korea relaxed some of its policies you were kind of a de facto pulse taker on north korea media because it was illegal to monitor it in south korea. but they tended to under the sunshine policy era of the late '90s -- reuters we shifted our

north korea tending operations from tokyo to seoul right around the time of the sunshine policy, and it was always before that very cumbersome because you would have in addition to whatever you did in japan in your coverage, whether it be, you know, military or political, social, you always had to keep an eye on the pulse if something were to happen in north korea and one of the things that happened on my watch in tokyo was the death of the first founding leader and that was before the internet. so you were kind of one of the voices, you know you chose your words very carefully because you were kind of the world's, one of the world's views on north korea, one of the formative views. the access question is, of course, north korea -- i remember even when there was sort of good news something to celebrate about north korea. i was rubbing shoulders with a north korean diplomat in beijing and i said this would be a good opportunity to invite some journalists in. he just laughed at me, that knowing laugh ain't going to

happen. funny that you still think that might happen. there's that. the access is no picnic even here in washington with people who deal with north korea, the sensitivity, the nature of things. we are not in a period of intense crisis between the united states and north korea right now and we haven't been for quite a while, at least since the nuclear test of 2013. so there's not that intense spotlight on u.s./north korea when there has been. when that spotlight shines brightly that's the hardest time to get information on this side of the pond. and i think in all of the countries that you consider players on north korea, if you can just consider the six-party opponent, countries russia and china, their in pyongyang media but their awol but their media functions differently. russia had great linguists under

the soviet union and became experts and some of those people we talked to. but they don't really -- it's not like there's a collective weight they've pull but you're operating in absence in any kind of leads and other sort of potential sources to follow. the case in china, china is much more relaxed about the press than north korea which isn't saying much, not very relaxed. when you work and cover social issues and all but high politics in china, you do have a local media that addition into things, within limits. they do on environmental or social issues, sexual issues. so there's somewhat of an open book. north korea does practically known of that or zero that i know of. so they are not even sort of a component to that coverage. i will say that, again, it's not unique to north korea. i mentioned, you know, north korea is on one extreme end but in terms of hostile working conditions we now know there's worst places to be caught as a

journalist than north korea from those unfortunate videos that have circulated in the past half year. so to keep things in perspective. as i was remarking to a friend in the audience earlier, the monarchy of thailand is impossible to cover from that country, burma until recently, myanmar was not -- was best covered from outside and only covered from the outside. so there's a spectrum of this and north korea does sit on that one extreme end. i'll close there with that because there's a lots of threads we can pull on. >> thanks. i agree with what jean and paul said. north korea has a disproportionate amount of interest from the general public. if you view north korea news you'll find five times as many more articles as ivory coast needs.

ivory coast is one country that allows north korea, has much more open information environment. journalists are freer. there's more interest in north korea. part of that is because the general public -- because of its access issue tends to look at north korea sometimes as if it's the moon. another planet. that in turn drives a push for sensationalism and mainstream journalists that don't cover north korea that often. that's one issue. we have a big challenge with small stories that just echo chamber into extremely sensational tabloid nonsense very quickly which even get traction from quite prestigious outlets. so that's one thing. access is another. in a different way to the way jean and paul have