Daily NK releases ground-level report on General Markets in North Korea

Daily NK is proud to announce the online release
of a comprehensive report on the current state of North Korea
s market economy and the implications of proliferating
marketization. The report marks the culmination of painstaking research efforts
undertaken between 2014-2016 in collaboration with 32 specially-trained sources from North Korea, approximately one-third of whom independently reported from inside the country on conditions within their local General Markets.

The report, entitled “The Creation of the North
Korean Market System
,” provides a more detailed view than ever before of the
extent of market activity occurring not just within the officially-sanctioned
brick-and-mortar markets, but also in terms of their pivotal role in supporting
a wider network of subsectors including labor and real estate, and their
influence on shifting societal behaviors.

Daily NK was able to verify the existence
of 387 officially-sanctioned markets within the country, with residents selling
from over 600,000 stalls within these marketplaces. Extrapolation of this data
factoring in statistical and environmental limitations, including changes that
would have occurred after the completion of the survey, suggest that these
numbers are now significantly higher. In population terms, over 5 million
people, or 20% of the population are either directly or indirectly reliant on
the General Markets, solidifying their place in North Korean society as an
integral and irreversible means of survival in the wake of the collapse of the
state
s Public Distribution System.

In todays North
Korea, provided one has the money, unprecedented access to materials and
influence is possible. This is a break from the past, where even if one had the
means, obtaining items like advanced medicine, for example, was all but
impossible. Emerging subsectors within the North Korean economy have also led
to alleviation of the chronic unemployment issue the country has long
experienced. In addition, there has been a general rise in the services market
in areas outside education and healthcare, which still remain largely dominated
by the state.

While the regime continues to suppress
fundamental civil and political rights, nascent freedom of mobility has
improved markedly thanks to North Korea
s fledgling
marketization. With the exception of the DMZ and smaller urban settlements near
the Sino-North Korean border, nuclear facilities, and prison camps, etc., most
residents can now move freely without significant impediment, provided they
have the money to do so. Likewise, the spread of mobile telecommunication
services means that open information transfer is now gathering momentum.

The North Korean authorities have largely
embraced the ability of the markets to provide for the people, but the report
details how the authorities have effectively sought to bring the markets under
their control, allowing some degree of growth but also suppressing activities
to a certain point. There are also new details regarding how the authorities
are managing the legality of these new enterprises, sometimes regulating what
once was illegal, but also tacitly allowing other technically illegal
activities. The donju (newly affluent middle class) and others with government
connections have become deeply involved in real estate transactions and other
financial activities tangentially tethered to the General Market trading
economy, leading to widening income inequality. A new poorer class has emerged
alongside the new monied class of donju and we postulate that this trend will
continue to grow. Homelessness is now primarily a manifestation of failed
business ventures rather than due to government mismanagement. 

Policy options to deal with the North
Korean nuclear program and how to influence China vis-a-vis North Korea have
been debated at length, but little if any time has been devoted to debating
policy options that pursue change via the power of the markets. Targeting the
market economy in North Korea as a key path towards improved quality of life
for its citizens may represent the most realistic strategy for tangible
progress, and this report provides a new wealth of information on the intricate
nature of the North
s growing economic
complexity. 

We hope that this report will contribute
toward a better understanding of North Korea, where starvation is no longer a
persistent threat due to an improving market economy, and where the people are
seeing greater influence over the future of their country
s economic system. It is time to view North Korea through a lens of
relative economic stability, where Kim Jong Un is likely to push ahead with
marketization as a platform to retain control. However, there are myriad risks
bubbling beneath the surface, as socioeconomic stratification grows more severe
and North Korea
s dependence on China continues to
introduce foreign influences that could threaten the stability of the Kim Jong
Un regime. Taken together, it is clear that strategies must be adjusted to
engage with the North Korean people and foment change from within.

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