Daily NK
Lee Kwang Baek
9/21/2007
The expansion of Jangmadang’s private economy
Several years ago, I met a defector from North Korea and is currently residing in Japan. He frequently meets people coming and going from North Korea.
The change he relayed regarding North Korea was interesting and vivid. Although hundreds of people are not dying from starvation as in the past, transformation brought about by the expansion of the private economy, such as the Jangmadang (markets).
I asked him what the most significant change in North Korea was after the mass starvation of the mid-90s.
It was the reorganization of North Korean society’s class system. According to him, there are currently six levels of classes forming in North Korea.
First is the top privileged class based on Kim Jong Il. It is the class that feeds and lives on Kim Jong Il’s administrative funds, all kinds of support coming in from South Korea, and extractions from civilians.
The second is the power class engaging in the area of foreign currency earning activity. A portion of money gained from the foreign currency earning business is offered to the Kim Jong Il regime and the rest are accumulated as their own wealth.
The third is the “moneybag” class who has earned money from exchanges with the products from Jangmadang and China. They use “violence” and “money,” like the Russian mafia, to secure the commercial rights of each region via the Jangmadang.
The fourth is the class whose sustenance depends on provisions. It can be deduced that people in the middle-class take up approximately 20~30% of the civilian population.
The fifth is the common class who depend on Jangmadang and individual patches. Approximately 60% of the total population falls into this class. They live day to day on their labor power.
The lowest class is the elderly, the handicapped, Kotjebi (begging children), city migrants, and diseased patients.
The most outstanding class is the 5th class. They are a class who has started living independently without depending on the Kim Jong Il regime and counts as 60% of the population.
South Korean administration believes that there is a need to seek a North Korean policy while considering the size and characteristics of the lower class.
That is, direct support or loans to the North Korean government should be reduced and a direct commercial transaction with North Korean citizens should be increased. Gradually, Kim Jong Il regime’s political position should be weakened and the status of self-sufficient lower-class citizens have to be elevated. This can become an important foundation for North Korean society’s move towards a market economy.
The second eye-catching element is the most venerable people in the lower class. Approximately 10% of people who fall under this class are humanitarian aid recipients of our government and international society. The latter two have steadily continued their support to them.
Despite this, according to a recent North Korean source, a significant amount of people are suffering from malnutrition among those who have been admitted to hospitals, long term reeducation camps, and concentration camps for beggar children. Why are such events occurring?
The defector said that when the rice that the South Korean government sends arrives at the North Korean harbor, North Korean authorities or organizations immediately sell them for money.
Similar testimonies have come forth from North Korean civilians. Rice which is sold at the harbor can only be bought with foreign currency. People who can purchase rice by paying foreign currency are “moneybags” for a portion of bureaucrats who have accumulated wealth. Moneybags and corrupt officials hand over this rice to the Jangmadang and collect the enormous balance.
The humanitarian aid provided by the outside, before they are even relayed to the lowest class who should be receiving support, are flowing into the hands of moneybags and corrupt bureaucrats. If such defectors’ testimonies are true, the South Korean government’s humanitarian rice support has lost its original function.
The solution regarding this is two-fold. First is directly relaying medical products and rice to North Korea’s lowest class. Through civilian and organizational efforts, a humanitarian support team jointly based on South Korean civilians and government should be formed and they should initiate humanitarian aid activity by directly going into North Korea.
Further, a large-sized South Korean humanitarian support activity inspection team should observe the activities of the North Korean Red Cross and raise the transparency of distribution. If this is difficult, there is a need to simplify the window through the support of international society whose monitoring is much ahead of our government’s monitoring of formality.
The government should urgently restore the original capacity of humanitarian support in order to avoid falling into a policy of failure geared only towards a dictatorship regime.
