{"id":2835,"date":"2016-12-19T17:40:08","date_gmt":"2016-12-19T08:40:08","guid":{"rendered":"http:\/\/www.01.asiapress.org\/rimjin-gang-2\/2016\/12\/report\/20161219-market-economy-realty-01\/"},"modified":"2021-06-25T18:54:20","modified_gmt":"2021-06-25T09:54:20","slug":"20161219-market-economy-realty-01","status":"publish","type":"post","link":"https:\/\/www.02.asiapress.org\/rimjin-gang\/2016\/12\/recommendations\/20161219-market-economy-realty-01\/","title":{"rendered":"\uff1cInside N. Korea\uff1e Expansion of the market economy as the driving force behind social transformation--based on sources from inside N.Korea. (PART1) by ISHIMARU Jiro"},"content":{"rendered":"
\"Children<\/a>

Children picking up leftover noodles at a black market. In October 1998, the period called the \u201cArduous March,\u201d in Wonsan, Kangwon Province. Taken by Ahn Chol (ASIAPRESS)<\/p><\/div>\n

2016\/Dec\/19<\/em><\/p>\n

\u25c6<\/strong> Introduction<\/strong><\/h2>\n

It is widely known that the market economy has rapidly developed in North Korea since the period of the \u201carduous march\u201d in the 1990s, at the time when the entire nation was in chaos.  Similar to other socialist states, North Korea used to sustain the planned economy by keeping it under the control of the regime.  The production and the distribution of the food supply, consumer goods such as daily necessities including tableware, furniture, and essential goods and services such as water, electricity, and housing were all provided by the regime.<\/p>\n

However, the government started losing control over the economy in the late 1990s as trading in black markets emerged and spread across the country.  For the past 20 years, the market has grown hundreds of times bigger and has been drastically developed and become more sophisticated.  Nowadays, the market economy has become the de facto driving force of the North Korean economy.<\/p>\n

This report is an overview of the expansion of the market economy in the areas of commerce, property, and transport and traffic in North Korea.  Furthermore, it analyzes what kind of impact the economy has on people\u2019s lives, their perceptions, and the system of social order.<\/p>\n

It is well known that North Korea has systematically implemented strict control of information and the concealment of truth, the toughest-ever control in the world.  In recent years, it has not even published key economic indicators, statistics, or government budgets, leading to an absolute lack of necessary information for outside analysts.  The Korean Central News Agency and Rodong Sinmun, the state-owned media, describes the economy as being on the right track, and that the socialist system has been functioning well in all aspects of the nation.
\nRelated Article: \uff1cInside N. Korea\uff1e Market survey shows \u201cResolution 2270\u201d, the toughest-ever sanctions, didn\u2019t work<\/a><\/span><\/strong><\/p>\n

As a journalist trying to understand the \u201chidden North Korean economy,\u201d I have conducted research through with following methods: 1) Collected as many testimonies as possible from North Korean defectors who fled into China either legally or illegally. 2) Obtained reliable evidence such as voice recordings, videos, and documents from Rimjin-gang<\/em> reporting-partners living in North Korea.  This report depends on the research methods listed above. In order to give readers a solid understanding of the changing economy in North Korea, what the \u201chidden state\u201d actually looks like, the report includes pictures taken inside North Korea.<\/p>\n

1) The Planned economy collapsed as the black market economy emerged<\/strong><\/h2>\n

1-1    Collapse of the planned economy<\/strong><\/p>\n

As one of the socialist countries, it is a well-known fact that North Korea adopted the one-party system by mirroring Stalinism; the country is ruled by the Workers' Party of Korea<\/em>, and the economy is centrally planned.  As long as people worked at the places arranged by the government, food, clothing, and shelter were guaranteed. Education and medical service were free. Public services such as transportation and amusement parks were fixed at low prices, and were all provided by the government.  Although the quality of those services was low, the government could sustain the distribution system largely with foreign aid.  Fellow socialist countries provided North Korea with massive amounts of support during the Cold War since it was located in a strategic region, directly facing the \u201cAmerican Imperialist\u201d in South Korea\u00ad.<\/p>\n

However, as early as the mid-1970s, the North Korean economy started deteriorating.  The government repeatedly invested, or rather wasted, a tremendous amount of money on nonproductive projects rather than on improving infrastructure and the living conditions of its people. It heavily militarized the country and built monuments and buildings such as statues and portraits of Kim Il-sung across the country for propaganda of its leader. North Korea also hosted a large-scale event called the \u201cWorld Festival of Youth and Students\u201d in Pyongyang in 1989 right after the Summer Olympics of Seoul in 1988.<\/p>\n

Besides the financial system operated by the state administrative agency, Kim Jong-il and Kim Il-sung operated an independent financial system called the \u201croyal court\u201d economy.  It grew big enough to suffocate the national economy and it ended up destroying the planned economy.<\/p>\n

The end of the Cold War brought about the dismantlement and then the disappearance of the Eastern Block of Soviet states that had protected and supported North Korea. With capitalism the now dominant economic model North Korea refused to accept it and open up its economy to foreign countries; it failed to go through the economic self-reform to adapt to the changing international circumstances and the tide of new international politics.  During the course of the economic collapse, Kim Il-sung unexpectedly died in July 1994. A disaster for the entire population that eventually left many numbers of people dead was about to happen in North Korea.<\/p>\n

Next page: 1-2 Arduous <\/strong>M<\/strong>arch...<\/strong><\/p>\n

\"\u2018Kotchebi\u2019,<\/a>

\u2018Kotchebi\u2019, homeless people, roaming around a black market. In October 1998, the period called the \u201cArduous March\u201d, in Wonsan, Kangwon Province. Taken by Ahn Chol (ASIAPRESS)<\/p><\/div>\n

 <\/p>\n

1-2    Arduous <\/strong>M<\/strong>arch<\/strong><\/p>\n

Kim Il-sung, the much-deified and absolute authority figure, suddenly died in July 1994 at a time when he had played an essential role in the North Korean social system.  An accumulated political and economic failure that had been repressed by the leader finally hit the country.  The \u201cKim Il-sung shock\u201d caused the society to enter into chaos.  The state administrative agency became dysfunctional and North Korea\u2019s social order was strongly shaken.  The food rationing system, the only way to have legal access to a food supply, almost completely collapsed.  The Arduous March was the worst famine to ever occur in North Korea.
\nRelated Article: N.Korea Market Survey Reveals Basic Food Price Hike<\/a><\/span><\/strong><\/p>\n

While dealing with the fatal crisis to the regime, the government led by Kim Jong-il decreed the slogan: \u201cAdhere to the spirit of the arduous march and keep fighting\u201d.  This period of massive disruption has been called the \u201cArduous March\u201d by North Koreans.  It was named after a fable about Kim Il-sung, as a commander of a group of anti-Japanese guerrilla fighters his group roamed around the mountains for a hundred days, being chased by the Japanese army since the end of 1938. [Note: In this report, the Arduous March is designated to have occurred from 1995 when a number of people started dyeing of starvation to around 2000 when the famine was somewhat over, but starvation was not completely eradicated.]\n

There are various speculations about the number of deaths in the period of arduous march, some estimate that around 200,000 to 300,000 people died while others claim that more than three million perished.  Since the government has not published any statistics, an accurate number of deaths is still unknown. [*Note 1]\n

Although the North Korean government admitted to the existence of deaths caused by the famine, it claimed that a deteriorated agricultural yield caused by torrential rains, floods, and droughts were to blame. In 1995 it applied to the international community for humanitarian aid.\u3000The reality was that social disorder caused massive paralysis of the functions of the planned economy such as agricultural production and commerce, leaving a vast number of people unable to access food and basic goods.<\/p>\n

After enough people had died, and those still alive realized they must take their fate into their own hands, urban citizens started to engage in illegal businesses. In the start North Koreans exchanged their household belongings, such as furniture, for food to sell in impromptu city markets. Other jobs resilient North Koreans did were scrapping machines at a factory they worked at in order to sell the scrap metal; they also turned to selling processed food such as bread and rice cakes. The majority of people who had lost the access to food embarked on illegal businesses, expanding the black markets exponentially. [To be continued in part 2<\/a><\/span>]\n

\uff1cMarket Economy in N.Korea\uff1e View article sections<\/a><\/span><\/strong><\/p>\n[*Note 1]: Hwang Jang-yop is the former secretary of the Workers' Party of Korea who defected to South Korea in February 1997.  In his book, \u201cThe Truth and Deceit of North Korea<\/em>\u201d ( Kobunsha, 1998) he wrote \u201c[I]n 1995, 500,000 people including 50,000 high ranking officials starved to death.  It is assumed that 1 million people starved to death in 1996\u201d and \u201cwithout foreign aid, 2 million people would die of starvation in 1997\u201d.  It is based on the story he heard from government officials in charge of agricultural statistics and food management.  Moon Hoi-il, a researcher and an ethnic Korean in Japan, assumed in his book, \u201cThe Demographic Change in the DPRK\u2013the Socialism in North Korea Analyzed By Demography<\/em>\u201d (Akashi Syoten, 2011), that based on a demographic statistics, 336,000 people had died of starvation since 1995 to 2000.  Han Jong-sik is a highly intelligent defector who used to be a professor at a university and was also a technician at a large state-owned factory in North Korea.  He told me in an interview in 2004 that \u201ca high-ranking official told me that the Party was aware that at least 10% of the whole population had died since 1995 to 1998.  I also thought that more than 10% of the urban population had lost lives in that period.\u201d<\/p>\n

<\/a><\/span><\/p>\n

\"rimjingang_banner001\"* <\/span><\/a>Editor\u2019s notes on North Korean reporters<\/a>
\n<\/a><\/strong><\/span>ARCHIVE(pdf) >><\/a><\/span>
\n DPRK MAP >><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

2016\/Dec\/19 \u25c6 Introduction It is widely known that the market economy has rapidly developed in North Korea since the per\u2026<\/p>\n","protected":false},"author":3,"featured_media":3572,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0},"categories":[10,12,13],"tags":[20],"_links":{"self":[{"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/posts\/2835"}],"collection":[{"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/comments?post=2835"}],"version-history":[{"count":0,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/posts\/2835\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/media\/3572"}],"wp:attachment":[{"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/media?parent=2835"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/categories?post=2835"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/tags?post=2835"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}