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The marketplace economy in North Korea

Posted July. 28, 2015 07:17,   


In South Korea, a person will be deemed wealthy if he or she lives in a luxury apartment, drives a Mercedes or a BMW, has an imported pet dog, owns a Samsung TV, and frequently eats out at a high-end restaurant and regularly enjoys high-cost spa and fitness club. In Pyongyang, such elite class who has over 50,000 U.S. dollars numbers 200,000 to 300,000 people or an estimated 1 million people maximum, according to U.S.-based Radio Free Asia in April. The North Korean economy under the Kim Jong Un regime is in a better than expected situation, some analysts say.

The U.S. Congressional Research Service released a report Sunday, which said North Korean economy has been somewhat growing since the beginning of this year, while economic reform measures announced last year have helped improve the livelihood of some North Korean people. In short, the report says that reform measures of applying market principle in industrial and agricultural sectors are creating opportunities for economic growth in North Korea. According to the Bank of Korea, the North Korean economy grew 1 percent last year, continuing a positive growth for four straight years following 0.8 percent in 2011, 1.3 percent in 2012 and 1.1 percent in 2013.

While the North are enthusiastic on only nuclear development while making its people suffer hunger and fear, it is paradoxically the incompetence of the North Korean authority behind the economy scoring a better than expected performance. Since Pyongyang suspended the food distribution system in the mid 1990s due to food shortage, it started to overlook marketplaces that are the grass root market economy, and over the course of 20 years the underground market economy has grown to prop up its regime. According to Google satellite`s detection in May, there were about 396 marketplaces in North Korea, double the 200 recorded in 2010. People who earned a fortune conspired with the privileged class, resulting in a system of money drawing more money.

The National Intelligence Service of South Korea reported to the National Assembly on July 14 that the marketplace generation is more interested in earning money than in ideology, has a strong tendency of individualism and has lower loyalty on the regime compared to their parent generations. If the public gradually depend their economic activities on marketplaces, Kim Jong Un will have to seriously consider reform and opening. It`s the way of the world that in the end nothing can win over the market.