After the November, 2008 handing down of the No. 61 Cabinet Instruction which commanded that all North Korea’s general markets be turned into agricultural markets, the authorities in each city and county shared its contents in People’s Unit meetings, on notice boards in the jangmadang, in market management offices and via cable broadcasts.

In December of the same year, the authorities made their first move, banning the people from selling Chinese industrial products in the Pyongyang jangmadang as a model for the rest of the nation. To facilitate control over such products, they had them delivered directly to Seopo Station in Pyongyang without being unloaded in Shinuiju as normal. Since January 1, when the reform measures came into effect, sellers of industrial products have been blocked from even entering the jangmadang in some cities.

When the No. 61 jangmadang measures were announced, residents opposed them and grew discontented. People complained, “The only place the people can get food is the jangmadang, but the authorities are trying to close the doors. Is this measure really any different from just killing us?”

Word from provincial officials swiftly reached Pyongyang, “If the jangmadang is closed, more serious difficulties than were suffered during the March of Tribulation will befall the people,” they pleaded. The authorities, clearly concerned, listened to the pleas and postponed the shift to agricultural markets by a nominal six months.

Since January of this year, however, not a single market has been reformed. North Korean residents who trade with China have testified in interviews that the markets are working as normal. Previous regulatory measures have ended in failure, and this time another measure aimed at closing the jangmadang has seemingly fallen through.

What is the reason for this? Why do jangmadang regulations fail so spectacularly? There are several elements which affect the markets simultaneously, but there are three pre-eminent causes.

First, the North Korean people’s ways and means of sustaining their livelihoods, and their self-awareness, have both changed. In the past, North Korean people worked in places allocated by the central authorities and lived on food distributed by the state in compensation for their work. It was a standard Marxist-Leninist economic model.

However, with the collapse of the Eastern Bloc, followed in short order by the Soviet Union itself, supplies of energy and natural resources mostly ceased, and industry largely stopped functioning, while deteriorating labor productivity and fuel and fertilizer shortages caused vast reductions in food production. At the same time, due in part to its own isolationist diplomatic policies, North Korea was hit by a lack of foreign currency and economic isolation, so it became extremely difficult to import food from other countries to make up the shortfall.

Eventually, North Korea could not afford to provide the people with the food and necessities they needed to survive. The famine of the 1990s, then, was the end result of the protracted collapse of the food distribution system.

Thereafter, the North Korean people had to learn to survive by themselves. Many failed, but the jangmadang became an utterly indispensable tool for those who did not.

This fundamental change had a great effect on the people’s mindset. They soon began to realize that they were no longer reliant on the Leader and the Party, but on their own ability.

Such changes inevitably raised people’s reliance on the jangmadang and reduced their fear of authority, which led to vocal opposition at the merest hint of jangmadang regulation. Deferring the de facto closure of the jangmadang by six months strongly implies that people’s reliance on the jangmadang was, and remains, so total that the authorities could do nothing to change it.

Connected closely to the first reason, the second reason is that the North Korean authorities have proven to be unable to restore the national economic management system to the degree that it can substitute for the jangmadang. If the authorities wish to shut down the jangmadang, they must guarantee the people’s daily necessities so that they can live without trading. This they have completely failed to do.

To normalize supplies of food and the necessities of life, the authorities would have to both increase agricultural productivity and import more rice, while running factories and enterprises normally by providing the raw materials, energy, spare parts and personnel that they need.

However, in reality this is impossible. First of all, now is not an auspicious time for North Korea to receive economic aid or cooperation from abroad because they are focusing on developing nuclear weapons and missiles, incurring the wrath of the international community.

In addition to that, it is increasingly hard to generate foreign currency to pay for imports, not least because North Korea is no longer capable of manufacturing much that other people want. Furthermore, since the launch of the Lee Myung Bak administration in Seoul, inter-Korean relations have deteriorated rapidly. Gathering hard currency from Mt. Geumgang tours and the Kaesong Complex is currently almost impossible.

This almost total failure of the No 61 Cabinet Instruction and other associated jangmadang regulatory measures show clearly that attempts to restore the state food distribution system have been thoroughly ineffective, and that the jangmadang is here to stay.

(to be continued)