Why North Korea's 'Historic' Workers' Party Congress Will Squander Its Chance to Make History

2016-05-04-1462380834-4161080-sNORTHKOREAsmall.jpg The pomp and ceremony of North Korea's 7th Workers' Party Congress, set to begin on May 6, is anachronistic political theater as only Kim Jong-un still practices it. But despite pronouncements that may sound like reform, this Congress will not herald a meaningful commitment to economic change or a shift in the country's nuclear-based militaristic policies.

This is the first such Workers' Party Congress in the DPRK in 36 years and like its immediate predecessor its purpose is to bolster internal political legitimacy. The highlight of the 6th Congress in 1980 was the anointing of Kim Jong-il as the successor to his father, Kim Il-sung, the Party's founder.

That Congress also saw the rise to prominence of North Korea's autarkic Juche, or self-reliance, doctrine, to which delegates at the current Congress will pledge allegiance. Decades later that doctrine has grotesquely morphed into hyper isolationism and economic atrophy. Compare the living standards of the North versus the South. And just check the attendance rolls. In 1980 the Congress hosted 177 delegations from 118 countries, including China and the Soviet Union. Come Friday, no official foreign delegations will be in Pyongyang.

Some observers argue that North Korea nevertheless may be on the cusp of economic reform now that is has "proven" the viability of its nuclear and ballistic missiles programs with test after test in the months and even days leading up to this Congress. Thus budgetary and manpower resources can be freed up for economic development.

Even if that were the case - and it is unlikely in my view that Kim Jong-un is willingly going to abandon his military-first policy - there is little reason for optimism. North Korea's track record in systemic economic policymaking has been a debacle. Take the November 2009 monetary reform measures that ended up wiping out household cash savings and precipitating severe hyperinflation (the party official in charge of the effort was sacked and reportedly executed). The upshot of that "reform" was to paralyze risk taking and destroy capital accumulation.

As a result North Koreans have no faith in their currency or their government's economic prowess.

The climate for foreign investment is not any better. The Egyptian telecommunications company, Orascom, lost control of its 75%-owned venture with North Korea's Koryolink and wrote-off the investment last year after negotiations proved futile to unblock and repatriate profits. Further, the latest round of U.N. bilateral sanctions put into place earlier this year significantly tighten economic options and conditions for the North. Early indications are that China is making administrative preparations to implement the sanctions it voted to support. The degree to which it will is yet unknown.

But the expanding scope and tightening of sanctions from South Korea, Japan, Europe and the U.S. deprive North Korea of diverse and wealthy markets for its goods and long-term financing for domestic investment. At the same time, it makes North Korea dangerously dependent on one country for its economic survival--China--with increasingly apparent risks as political strains intensify between Beijing and Pyongyang.

New leadership at Communist Party Congresses in China in 1977 and in Vietnam in 1986 made the internal calculation - with no influence from external "dialogue," it should be noted - that national interests are best served by opening and economic reform, not rigid political ideology and observing a cult of personality of its leader. Tragically for the North Korean people, we can expect no such epiphany at this week's "historic" Congress.