Unification Media Group (UMG): The Korean peninsula is in the midst of a cold snap, which may be why the outdoor markets here in South Korea haven’t been very busy these days. To hear about the latest market conditions in North Korea, we turn to reporter Kang Mi Jin.
Kang Mi Jin (Kang): It has gotten slightly warmer since last week, but the cold is still causing some retail businesses to remain closed due to a lack of customers.
North Korea is even colder that the South. I would imagine that, given the chilly weather, its residents would be extremely reluctant to head to the markets. With temperatures dropping below minus 35 degrees Celsius (about minus 31 degrees Fahrenheit), I was hardly surprised when I heard one inside source say that some residents in the northern alpine region of Ryanggang Province are preferring to stay home rather than going out.
UMG: I can imagine why these residents would want to stay home rather than stand up all day in the markets, but if they don’t go out, isn’t it hard for them to earn a living and support their families?
Kang: I had the exact same concern and asked about it during a recent telephone conversation with a North Korean source. The source responded by saying, “We work to support ourselves. Even if we don’t go out to sell in the jangmadang, we can still find a way to survive.” This kind of statement is an indication of the resilience that North Koreans have acquired since they began to turn away from reliance on the state and towards their own methods to survive around the early 2000s.
According to the source, residents know who sells what in the markets near their homes. So even if they don’t go into the markets, they can go to each other’s homes to buy and sell. Further, because there are occasional crackdowns on Chinese products, it can actually be safer to sell products from one’s own home than in the markets.
Even residents who offer wholesale goods are opting to trade from the safety of their own homes.
UMG: But aren’t the authorities noticing this trend and taking steps to block it?
Kang: Recently, the Ryanggang Province authorities have started to crack down on market activity, trying to block residents from selling out of their homes. There are frequent reports of residents getting caught in Ryanggang Province.
However, if the apprehended residents give sufficient bribes to the arresting officer, they look the other way. In some cases, the residents stand up to the officers and tell them that they are not selling anything out of their homes.
Once a crackdown happens in the vicinity, word travels quickly throughout the neighborhood, and the merchants get word with particular haste. The role of cellphones in this process is key. The merchants know that one crackdown nearby means that they are vulnerable. So this information helps them to stay on guard.
UMG: Why are the authorities cracking down on merchants selling from their homes?
Kang: Residents who sell in the markets are required to pay a stall fee. This is a fee given to the local authorities which allows the merchant to sell their goods in the market for a day. So residents who sell from their homes are skipping out on this fee. The crackdown can thus be seen as a way to make sure that this revenue source stays open.
Most merchants in the market set up a stall and pay a monthly portion of their profits to the relevant state entity, such as the business management office. In some places, like Pyongyang or Pyongsong, the merchants set up stalls on the streets and give a kickback representing a set percentage of their profits to the public organization.
UMG: It seems that the authorities would therefore receive plenty of fees via this method. So this makes me even more curious why the crackdown is occurring.
Kang: Many of the residents selling from their homes simply tell the public organization that they were unable to make any sales and then do not pay the fees. That’s why the local authorities are incentivized to encourage the residents to sell from the markets.
When I was in North Korea, I offered sales from my home. I operated under the name of the People’s Committee. This means that I gave 30% of my earnings to them. For the first few months, I gave them exactly as much as they were asking for, but when times were lean and the fees became burdensome, it became hard to send the full 30%. During such times, I told them that I didn’t sell quite as much and paid them less.
 All prices shown in KPW and current as of January 29, 2018. Data: Daily NK |
