The Cabinet’s push for economic reforms and
the appointment of Pak Pong Ju
Pak Pong Ju, who was among the leaders of
the “July 1st Economic Improvement Measures,” reemerged as North
Korea’s Cabinet prime minister in April 2013–an arguable indicator of Kim Jong
Eun’s desire for reformation and opening up. Since
January 2013, North Korea has been holding regular enlarged Cabinet meetings
every quarter and proposing economic plan performance outcome inspections and
action plans for key projects. Park Bong Ju’s
appointment to premier in the midst of North Korea’s
showy displays of the intent to strengthen the economy management system of the
central Cabinet can be considered significant for economic reform and opening
up.
The authors will now examine several
symbolic and specific examples of North Korea’s evolving landscape.
As of June 2014 10% of the population
possessed mobile phones
North Korea Tech, a website specializing in
North Korea, revealed that in June 2014 the number of North Koreans enrolled in
Koryolink, North Korea’s mobile service company,
exceeded 2.4 million. By December 2008, one year after the start of 3G service,
this number grew by 100,000; by February 2012, this number increased by 1 million
with another million joining the service by 2013. Such trends led to
predictions of 3 million users by June 2014 but total numbers have yet to reach
expectations. However, there are serious implications for the fact that the
number of mobile users has reached 10% of the population in a society as closed
off as North Korea.
The influx of information and continuously
increasing speed of communication within the country proportionally increases
possibilities for contact with the outside world.
Taxi cabs and motorcycles
In a conversation with the Daily NK, a
source in Pyongan Province stated, “In
Pyongsong and Suncheon, taxis have started to gain popularity,” and “personal taxis are rising as
a means for money making and becoming an investment market for the donjuLiterally "masters of money," donju refers to people who hav... More [the new
wealthy class].” Taxis have become fairly
commonplace in Pyongyang and Rasun, operating under and managed by Pyongyang’s transportation company, Daedong River Passenger Transportation. On
the other hand, taxis in Pyongsong and Suncheon are merely registered with the
Pyongyang-based company, but operate independently through personal investors.
The source explained that costs for taxi
cabs sold in Suncheon Market were 12,000 USD for a new car, 6,000-7,000 USD for
a used vehicle, and 500 USD extra for license plates provided by the sellers.
Taxi fare is 15,000 KPW [1.88 USD] for every 4 km and individual bus fare is
around 2,000 KPW [0.25 USD] for the same distance. The 75,000 KPW [9.38 USD]
taxi fare from Pyongsong to Suncheon is prohibitively expensive when compared
to the bus fare of 10,000 KPW [1.25 USD]; however, the source revealed the
number of taxi riders to be high because those engaged in business activities
often find themselves fighting against time.
As the number of men utilizing motorcycles
in their business operations grows, women’s perceptions
of their husbands are also changing. Women’s market activities have propelled them to positions as the dominant breadwinners in families across North Korea, resulting in the
satirical term “nampyeon boolpyeon” [husband burden] to symbolize
that they are “of no particular use.” However, this attitude has
begun to shift more recently, with husbands gaining more recognition as heads
of households–or at the very least, more significant financial contributors.
As motorcycles expand as a means of market
economy distribution, the number of women riding motorcycles is also
increasing. “In Manpo City, Jakang Province, women
engage in business on motorcycles,” a local source stated. “In other regions, the number of women running businesses on
motorcycles is slowly increasing.”
This development reveals steadily expanding
marketization throughout North Korean society while simultaneously highlighting
the fact that transportation methods of the people are becoming more diverse
and convenient.
10,000 KPW hamburgers and 30,000 KPW pizzas
After undergoing an expansive remodeling in
2013, the newly restored fast food bar in Pyongyang’s
Munsu Water Park is selling hamburgers at 10,000 KPW [1.25 USD] each—roughly 3-5 times the amount of an average North Korean worker’s monthly salary.
In a conversation with the Daily NK, a
source in South Pyongan province stated, “The Neungra
88 Trade Company Restaurant by Daedong river in Suncheon started
selling pizza since late last year” and that “it was very popular among those with money.” According
to Andrew Cheng’s journey in North Korea during
February 2014, timed to overlap with Kim Jong Il’s
birthday on February 16th, there are two pizza shops in Pyongyang and all
ingredients are directly imported from Italy. This was the first confirmation
that pizza is being sold not just in Pyongyang but also in other cities
within the North.
The source said that “there is a large parking area in front of the restaurant so the
majority of customers are donjuLiterally "masters of money," donju refers to people who hav... More who earn foreign money through coal exports,” and “on weekends, it is common to
spot customers sporting sunglasses and digging into these pizzas [referred to
as buchimgae, pan-fried vegetable pancake; or okonomiyaki, a Japanese
savory pancake]in their sunglasses.” The advance
of foreign-currency earning companies in North Korea can be read as a testament to the growing buying power of the middle class. “The poor continue to be poor but the
rich use their power and capital to become even richer,” the source explained. This is a symbolic example of increasing globalization of food
in the midst of Hallyu’s [Korean Wave] influence on the nation.
Tutoring wave for children
Another recent development is the
emergence of increased tutoring services across the nation, with university
students from Pyongyang heading to rural areas to impart their knowledge on
those willing to pay for it. Though “private education” is officially banned in North Korea, there are a plethora of illegal tutoring rings in operation; however, it is a rare case for
Pyongyang college students to travel as far as rural areas to do so, indicating
that the North Korea’s tutoring market will only continue to expand.
The source stated that “with the proper luck to meet the right parents, it’s possible to make around 1,000 USD for one to two months of
tutoring,” adding that there is a significant trend to find families with
connections, like Party cadres, which can lead to possible employment
advantages upon graduation.
According to the source, even up until a
few years ago, Party cadres focused on the humanities and social sciences
tutoring for their children but more recently this preference has shifted to
primary subjects [computer science, foreign language, physics, and chemistry]
or the arts.
These changes demonstrate the growing
fervor held by North Korean parents for children’s
education, largely keeping in line with similar global trends.
In such ways, North Korean society is
undergoing a drastic transformation and, at times, the changes are shocking. Of
course, such changes in North Korea did not suddenly spring up as soon as Kim
Jong Eun assumed power. Instead, these changes are more of an extension of the
marketization trends that began during the so-called “Arduous March [famine]” of the 1990s.
The energies of change can be considered
greater than what outsiders expected because the powerful stream that
lasted over 20 years combined with the current flow of the times. Even if it is
the feudalistic hereditary dictatorship system of North Korea, it appears it
will be impossible to overturn such transformations with one swift blow.
Although it is difficult to understand a situation where North Korea’s economy is improving despite severe economic sanctions by South
Korea and the broader international community, the surprising result can be
explained with the two key phrases – “expansion of
open policies with China” and“expansion of marketization.”
There are some points of contention about
whether the policies and examples above qualify the Kim Jong Eun regime as
revving its engines for reform and opening up. Experts who claim such change it
is not actual reform or opening up in the most profound sense generally cite three major
examples.
First, instead of proclaiming reform and open door policies with
China as a formal Party approach, North Korea has instead nationally emphasized
the rejection of reform and open-door policies. Second, the development for an
investment environment designed to attract foreign investment is not systematic
or aggressive by any means. Third, the “Byungjin Line [simultaneous
development of nuclear weapons and the economy]” is
incompatible with reformation and opening up. However, it is, in fact, quite
possible to view North Korea through a lens of reform and opening.
Criticism that reformation and opening up
were not proclaimed as official approaches by the Party, therefore suggesting that a retreat is possible at any time, are justified. However, after the “Arduous March,” the series of change in North Korea directly resulted from marketization and international opening up–we must
focus on the fact that it is nearly impossible to reverse such sweeping changes.
After
the appearance of negative side effects following the July 1st Measures, North
Korea did everything in its power to reverse the effects but ultimately
failed to do so. Now, in a situation where the waves of marketization and
opening up have grown immensely–and only gaining speed–it is clear
that attempts to reverse this phenomenon will only cause greater repercussions.
Moreover, the biggest obstacle to North
Korea’s efforts to attract foreign investment is North
Korea’s possession of nuclear weapons. This is also the
issue of whether the economy and nuclear arms front can coexist with
reformation and opening up. The “Byungjin Line” is generally understood as an approach centered on the
inability to give up nuclear arms; still, an alternative interpretation is also
plausible.
While the approach encompasses a stance of refusal to give up
nuclear arms, it also suggests that they are crucial collateral to protect
the system, thereby freeing up North Korea to focus more on driving economic growth. Some experts
even claim that the core of the economy and nuclear arms line can be
interpreted as the North’s decision to cease bolstering
national defense in favor of using the costs to improve residents’ lives.
