Good piece in the Asia Times by Andrei Lankov, one of the world’s foremost experts on North Korea and the geopolitics that surround it. Here he’s focusing on the domestic changes, or lack thereof, specifically in the marketplace, which he argues are moving toward 1990 rather than 2008.

These changes are considerable and should not encourage those optimists who spent years predicting that given favorable circumstances the North Korean regime would mend its ways and follow the beneficial development line of China and Vietnam. Alas, the recent trend is clear: the North Korean regime is maintaining its counter-offensive against market forces.

Lankov details how following the death of leader Kim Il-sung in 1994 and the subsequent famine from 1996-1999, economic activity was moved into booming private markets, and a “grassroots capitalism” began to slowly take hold.

Read the article for the better detail, but basically he argues that while the government didn’t approve of the reforms, it half-heartedly went along with some to necessitate it’s own survival. By 2004 a reversal began.

By 2005, it became clear: the government wanted to turn the clock back, restoring the system that existed before the collapse of the 1990s. In other words, Kim Jong-il’s government spent the recent three of four years attempting to re-Stalinize the country.

This policy might be ruinous economically, but politically it makes perfect sense. It seems that North Korean leaders believe that their system cannot survive major liberalization. They might be correct in their pessimism. The country faces a choice that is unknown to China or Vietnam, two model nations of the post-Communist reform. It is the existence of South Korea that creates the major difference.

He goes on to point out that while the per capita gross national income in the South is 17 times the level it is in the North, West Germany’s economy was just double that of East Germany prior to unification.

Lankov goes on to name specific changes in the North Korean marketplace that signal a shift back to a Stalinist-style government. A ban on cell phones, the restarting of the Public Distribution System, and a recent law that went into effect last December saying that only women over the age of 50 can sell goods at a market.