North Korean Economy Watch

Pictured above: (L) satellite image of the Rajin Market, (R) a ground-level photo taken in 1999

Among the the flurry of activities that comprised the DPRK’s recent public relations campaign in Rason (Rajin-Sonbong), the Rajin Market appeared on the itineraries of a few visiting delegates. Alexa Olsen writes about the market for the Associated Press:

Chinese travel agents, potential investors and foreign journalists recently traveled into the North to get a look at the special economic zone Pyongyang is promoting in Rason. It lies in the far northeastern tip of North Korea, 600 miles (1,000 kilometers) from Pyongyang, but will be about an hour’s drive from China once the road is completed.

Rumbling Chinese cargo trucks already ply the route, churning up plumes of choking dust and ferrying containers of Chinese-made shoes, plastic toys, computer speakers, T-shirts and DVDs to the Rason Free Trade Market.

The market, a 13-year-old experiment in small-scale capitalism, has been so successful that the Chinese managing company, the Tianyu Group, is planning to expand the jam-packed 54,000-square-foot (5,000-square-meter) market to 320,000 square feet (30,000 square meters), Tianyu vice director Zheng Zhexi said.

“As I see it, this is the way of economic development, and it’s something that the people want,” Zheng said. “I think it’s reached a point where it cannot be reversed.”

North Korea declared the area a special economic zone 20 years ago. But after a brief flurry of activity and funding from the U.N. Development Program, the project languished without backing from Pyongyang’s leadership.

…

Rason has benefited from the shift in Pyongyang’s priorities. When Zheng arrived in 1997 to set up the market, people were hesitant to get involved. Now Tianyu doesn’t have the space to approve even a fraction of the applications from prospective vendors, he said.

“Ordinary people’s sense and the awareness of the market, and their views on the economy — all these have changed a lot,” Zheng said.

Foreign journalists, who typically are barred from local markets, were taken on a strictly controlled, 15-minute tour. No photos, no notes, the guide instructed: “Just use your eyes.”

Vendors, mostly women, stood behind stands loaded with freshly skinned rabbit and live chickens, as well as goods mostly imported from China: blouses, speakers, refrigerators, sofas, shampoo, playing cards, binoculars.

High heels went for 25 yuan (US$4), a Kim Jong Il-style beige suit for 85 yuan ($13) and a container of sea salt for 3 yuan ($0.47).

North Korean tour guide Mun Ho Yong, 25, said his family shops at the market several times a week to supplement state rations of rice, oil and fish.

Everything Mun wore — striped dress shirt, belt, polyester trousers and black dress shoes — was bought at the market except his pin of late President Kim Il Sung attached to his shirt, over his heart.

One major challenge will be to successfully leap from the market’s small-scale commerce to full-fledged manufacturing and trade.

(UPDATE) In an article published later in the New York Times (2011-10-12):

A Chinese company critical to Rason’s development, the Yanbian Tianyu International Trade Company, got involved here 13 years ago. It began by erecting the bazaar, then built the casino, a hospital, a bread factory and a telecommunications building. It is now working on a cement factory, and operates two iron mines.

“The policy environment has been improving continuously,” said Zheng Zhexi, 58, the company’s vice president. “It’s moving towards a market economy.”

He pointed to the official tolerance for the bazaar, where merchants rent stalls from the government to sell goods that they buy from Chinese traders. Prices fluctuate and shoppers haggle. The bazaar has proved so successful that it is expanding to six times the current size.

These kinds of markets have sprung up all over the country to supplement the government’s weak food distribution system. Still, the government is sensitive to their capitalist nature, and some top officials have tried to set limits on them. Foreign journalists were permitted a 15-minute tour of the Rason market on the condition that they not photograph it or take notes.

The market, open just a few hours each day, was bustling, with goods like skinned rabbits, sofas, Sony headphones and Dell computer mice. A soldier with a Kalashnikov slung over his back walked among the aisles, looking to buy, and women running stalls wore red vests, the uniform of officially registered merchants.

In one corner was an office with the English words “Foreign Exchange” above the door. In Rason, currency is exchanged at the market rate — one Chinese renminbi to 350 North Korea won — rather than at the official rate, which values one renminbi at 15 won.

Additional Information:

1. Previous posts on Rason can be found here.

2. Additional information can be found here.

3. Source:
Tending a Small Patch of Capitalism
New York Times
Edward Wong
2011-10-12

Stephan Haggard and Dan Pinkston have found and posted comments attributed to Kim Jong-il revealing some of his thinking on “markets” and the “market economy”:

Kim Jong-il, “On the promotion of a superior socialist economy…adhering to the principles of socialism” June 18, 2008, dialogue with party and state officials.

“…As I said on many occasions during the recent period, one must have a correct understanding of the market. As we allowed a certain use of markets with respect to economic management, some people understood this as a departure from the socialist principle and as a move towards a market economy through “reform” and “opening up” of the country’s economy.

But this is a very wrong way of reasoning. Having a misguided understanding of the market and the market economy on the part of economic planners shows their lack of ideology and knowledge… [If] one fails to exactly and deeply recognize the party’s ideology and policy with regards to economic planning, that person will have his or her faith in the superior socialist economy shaken and can be dazzled by “reform” or “opening up” that the imperialists brag about and also be captured by the fantasy that the capitalist market economy promises.

Workers need to be awakened from these pitfalls…. Markets are both home to and a hotbed for un-socialist phenomenon and capitalist factors in the economic sectors. Without devising a national plan about markets and neglecting them as they are, or further encouraging their activities and expanding their reach, the country’s economy will inevitably turn into a market economy. However, following the practical conditions by using the market to a certain extent while keeping it under national control does not necessarily mean a movement towards market economy. Markets and a market economy are not the same concepts. The question resides in how to perceive and treat the market, and how to use it following [appropriate] principles and direction…”

-Original text in Korean

“…….내가 최근시기 여러 기회에 말하였지만 시장에 대한 인식을 바로 가져야 합니다. 우리가 경제관리에서 시장을 일정하게 리용하도록 하였더니 한때 일부 사람들은 사회주의 원칙에서 벗어나 나라의 경제를 《개혁》《개방》하여 시장경제로 넘어가는 것처럼 리해한 것 같은데 이것은 아주 잘못된 생각입니다. 경제지도일꾼들이 시장과 시장경제에 대한 그릇된 인식을 가지게 되는 것은 사상의 빈곤 지식의 빈곤에 빠져있다는 것을 말해줍니다. 누구나 할 것 없이 경제사업과 관련한 당의 사상과 방침을 정확히, 깊이있게 인식하지 못하면 사회주의 경제의 우월성에 대한 신념이 흔들리게 되어 제국주의자들이 떠벌이는 《개혁》《개방》에 현혹될 수 있고 자본주의 시장경제에 대한 환상에 사로잡힐 수 있는 것입니다. 이에 대하여 일군들이 각성을 높여야 합니다….시장은 경제분야에서 나타나는 비사회주의적 현상, 자본주의적 요소의 본거지이며 온상입니다. 시장에 대하여 아무런 국가적 대책도 세우지 않고 그대로 내버려 두거나 시장을 더욱 조장하고 그 령역을 확대하는 방향으로 나간다면 불피코 나라의 경제가 시장경제로 넘어가게 됩니다. 그러나 현실적 조건에 따라 국가적 통제 밑에 시장을 일정하게 리용하는 것이 곧 시장경제로 가는 것은 아닙니다. 시장과 시장경제는 같은 개념이 아닙니다. 문제는 시장을 어떻게 보고 대하며 그것을 어떤 원칙과 방향에서 어떻게 리용하는가 하는데 있습니다….”

Marcus Noland followed up with a [longer] publication by Kim Jong-il’s sister, Kim Kyong-hui:

Strengthening Centralized, Unified State Guidance Over Economy, Kyo’ngje Yo’ngu

Our army and people are vigorously carrying out a general onward march to elevate the economy to a stage of leaping development through a new great revolutionary upswing under the great party’s military-first leadership.

Today, when our country is displaying its majestic appearance and might as a politically, ideologically, and militarily powerful state, in order to build it into an economically powerful socialist state and a socialist paradise where the people enjoy an affluent life with nothing more to desire in the world by concentrating efforts on the economic construction and on improving the people’s living standard, it is necessary to adhere to the socialist principle in the economic work and bring the superiority of the socialist planned economy into high play, and what is important in this is to strengthen the centralized and unified guidance of the state over the economic construction.

The great leader [ryo'ngdoja] Comrade Kim Jong Il [Kim Cho'ng-il] has pointed out the following:

“Above all else, it is necessary to strengthen the centralized and unified guidance of the state over the economic construction.”

Strengthening the centralized and unified guidance of the state in the socialist economic management arises as a basic demand for improving the economic management in line with the intrinsic nature of socialist society, further consolidating and developing the socialist economic system by bringing the superiority of the socialist planned economy into high play, and accelerating the construction of an economically powerful state.

Strengthening the centralized and unified guidance of the state is a basic demand for improving the socialist economic management because, above all, managing and operating the country’s economy in a planned manner under the state’s centralized and unified guidance is an intrinsic demand of the socialist economy that is based on collectivism and a basic principle of the socialist economic management.

Realizing the centralized and unified guidance of the state in the socialist economic management serves as a lifeline of the socialist economic management, which stems from the natural law-governed nature of the socialist economic development and the essential characteristics of the socialist economy.

The centralized and unified guidance of the state over the economy is, above all, an intrinsic demand of the socialist economy that is based on collectivism. The socialist economy is a large-scale collective economy in which all sectors and units of the people’s economy are organically connected with each other based on social ownership of the means of production, and it is a highly organized and centralized planned economy. This is the essential superiority of the socialist planned economy, which is distinct from the capitalist market economy that operates spontaneously on the basis of private ownership of the means of production. In a capitalist society, the bourgeois state is not able to perform the function of interconnecting the management activities of different enterprises and leading them in one direction. In a capitalist society, the economy moves in a spontaneous manner amid the pursuit of profits and competition based on the law of the jungle due to the conflict of interests between the capitalist class and the working popular masses and among capitalists, and this accompanies the bankruptcy of enterprises.

In contrast, the socialist economy is based on social ownership of the means of production, and it is managed and operated through goal consciousness by the popular masses as the masters. Social ownership of the means of production calls for combining all economic sectors and units into a single production organism, and also for the factories and enterprises comprising its components to move under a unitary command. Realizing planned ties between factories and enterprises and ensuring that the economy operates under a single unitary command are firmly guaranteed by the unified guidance of the socialist state.

The centralized and unified guidance of the state over the economy is also a basic principle of the socialist economic management.

Apart from the centralized and unified guidance of the state and the principle of managing a planned economy, socialism cannot be defended in the economic field, and the socialist economy cannot be developed.

The initiative of lower units has to be brought into high play in the socialist economic management, but this has to be achieved strictly on the basis of firmly guaranteeing the centralized and unified guidance of the state and within the framework of the socialist planned economy. It is only through the centralized and unified guidance of the state that it is possible to correctly map out plans so as to guarantee the greatest actual profits consistent with national interests and the all-people’s economic interests, mobilize all production potentials of the country to the maximum, concentrate forces and resources on the objects that are of key significance in the overall economic development, and thus achieve a planned and balanced development of the economy. If one moves in the direction of giving a free rein to economic management and enterprise management in an attempt to enhance the initiative of lower units and strengthen their “independence” and “self-reliance,” then the lower units will break way from the unified guidance and control of the state and act as they please, and this will not only bring about tremendous national waste and loss but also make it impossible to neither defend socialism in the economic field nor develop the socialist economy.

Strengthening the centralized and unified guidance of the state is a basic demand for improving the socialist economic management also because the centralized and unified guidance of the state over the economy has to be strengthened in order to be able to mobilize all potentials to the maximum based on the principle of self-reliance and thus elevate the country’s economy to a stage of leaping development and accelerate the construction of an economically powerful socialist state.

Today’s great upswing calls for more highly holding up the banner of self-reliance, and an economically powerful socialist state is a powerful state of self-reliance, a powerful state with a mighty self-supporting national economy.

We have laid the strong foundation of a socialist self-supporting national economy by highly displaying the revolutionary spirit of self-reliance under the wise leadership of the great leader [suryo'ngnim] and the respected and beloved general. Mobilizing and utilizing the potential of the already provided foundation of a self-supporting economy to the maximum is the most accurate way to elevate the country’s economy to a stage of leaping development and accelerate the construction of an economically powerful socialist state in our style in the present circumstances.

Though many obstacles are still lying in the way ahead of us, we have to open a road of advance for victory by relying on the boundless creative ability of all the people, our resources and technology, and the superiority of our system.

The centralized and unified guidance of the state over the economy has to be strengthened in order to elevate the country’s economy to a stage of leaping development by mobilizing the potential of the already provided foundation of a self-supporting national economy to the maximum and to accelerate the construction of an economically powerful socialist state.

Above all, the centralized and unified guidance of the state has to be strengthened in order to ensure a balanced and harmonious development of the economy in conformity with the aspiration and demand of the popular masses. An important task we are faced with in the economic construction at the present time is to rely on the superiority of the socialist planned economy to closely combine the normalization of production with modernization and push ahead with it vigorously, and thus decisively surpass the highest production level in all sectors of the people’s economy. It is only under the condition of strengthening the centralized and unified guidance of the state that it is possible to create the military-first era’s speed of waging the general onward march by mobilizing all production potentials of the country to the maximum from the viewpoint of national interests consistent with the party’s policy demands, and also accelerate the construction of an economically powerful socialist state by harmonizing the production ties centered on the objects of key significance in the economic development, guaranteeing the planned and disciplined nature of the economic work, and thus achieving a balanced development of the overall economy.

The centralized and unified guidance of the state has to be strengthened also to be able to bring the initiative of individual sectors and units, and local areas into high play and thus actively mobilize and utilize the potential of the self-supporting economy.

There may be things that are in short supply and that are missing in the process of building an economically powerful state. This is why the demand for bringing the initiative of each sector and unit into high play arises in order for all sectors and units of the people’s economy to normalize production and surpass the highest production level based on the existing assets.

Only when the centralized and unified guidance of the state over the economy is realized smoothly, is it possible to enhance the initiative of all sectors and units in line with the intrinsic requirement for the development of socialist economy that is based on collectivism and decisively boost the economic effectiveness in mobilizing and utilizing the reserves.

Strengthening the centralized and unified guidance of the state over the economy in no ways means disregarding the initiative of lower units. The socialist economic construction can be carried out successfully only when the unified guidance of the state is combined correctly with the initiative of lower units. This is because if the state’s centralized and unified guidance enables the economy to develop harmoniously on a pan-social level, then the initiative of lower units spurs factories and enterprises to increase production and perfect the production and technical processes on their own by positively exploring and mobilizing the existing reserves and production potentials pursuant to the economic plans established by the state. If the lower units are restrained based on the opinion that the management activities of each unit should be unconditionally subordinate to the state, then the initiative of factories and enterprises will be suppressed and the production will not proceed smoothly. This is why the centralized and unified guidance of the state over the economy is based on the premise of further enhancing the initiative of lower units.

All the economic guidance functionaries should have a correct perception of the state’s centralized and unified guidance and realize it correctly, and thus bring the genuine superiority of socialist planned economy into high play.

“위대한 당의 선군령도따라 우리 군대와 인민은 새로운 혁명적대고조로 경제를
비약적인 발전단계에 올려세우기 위한 총진군을 힘있게 벌려나가고있다.

정치사상강국, 군사강국의 위용과 위력을 온 세계에 떨치고있는 오늘 경제건설과
인민생활향상에 힘을 집중하여 우리 나라를 사회주의경제강국으로, 인민들이
세상에 부러움없이 잘 사는 사회주의락원으로 건설하기 위하여서는 경제사업에서
사회주의원칙을 고수하고 사회주의계획경제의 우월성을 높이 발양시켜야 하며
여기서 중요한것은 경제건설에 대한 국가의 중앙집권적, 통일적지도를
강화하는것이다.

위대한 령도자 김정일동지께서는 다음과 같이 지적하시였다.

《무엇보다도 경제건설에 대한 국가의 중앙집권적, 통일적지도를 강화하여야
합니다.》

사회주의경제관리에서 국가의 중앙집권적, 통일적지도를 강화하는것은
사회주의사회의 본성에 맞게 경제관리를 개선하고 사회주의계획경제의 우월성을
높이 발양시켜 사회주의경제제도를 더욱 공고발전시키며 경제강국건설을
다그치기 위한 기본요구로 제기된다.

국가의 중앙집권적, 통일적지도를 강화하는것이 사회주의경제관리개선의
기본요구로 되는것은 무엇보다먼저 나라의 경제를 국가의 중앙집권적,
통일적지도밑에 계획적으로 관리운영하는것이 집단주의에 기초한 사회주의경제의
본성적요구이며 사회주의경제관리의 기본원칙이기때문이다.

사회주의경제관리에서 국가의 중앙집권적, 통일적지도를 실현하는것은
사회주의경제발전의 합법칙성과 사회주의경제의 본질적특성으로부터 출발한
사회주의경제관리의 생명선이다.

경제에 대한 국가의 중앙집권적, 통일적지도는 우선 집단주의에 기초한
사회주의경제의 본성적요구이다. 사회주의경제는 생산수단에 대한 사회적소유에
기초하여 인민경제의 모든 부문들과 단위들이 유기적으로 련결된 대규모의
집단경제이며 고도로 조직화되고 중앙집권화된 계획경제이다. 이것은 생산수단에
대한 사적소유에 기초하여 자연발생적으로 움직이는 자본주의시장경제와 다른
사회주의계획경제의 본질적우월성이다. 자본주의사회에서는 부르죠아국가가
각이한 기업체들의 경영활동을 서로 맞물리고 하나의 방향으로 이끌어나갈수
있는 기능을 수행할수 없다. 자본주의사회에서는 자본가계급과
근로인민대중사이, 자본가들사이의 리해관계의 대립으로 하여 경제가 리윤추구와
약육강식의 경쟁속에서 자연발생적으로 진행되며 이것은 기업파산을 동반한다.

이와는 달리 사회주의경제는 생산수단에 대한 사회적소유에 기초하고있으며
인민대중이 주인이 되여 목적의식적으로 관리운영된다. 생산수단에 대한
사회적소유는 모든 경제부문, 단위들을 하나의 생산유기체로 결합시키는 한편 그
구성부분으로 되는 공장, 기업소들이 유일적인 지휘에 따라 움직일것을
요구한다. 공장, 기업소들사이에 계획적인 련계를 실현하며 경제가 하나의
유일적인 지휘밑에 움직이도록 하는것은 사회주의국가의 통일적지도에 의하여
확고히 담보된다.

경제에 대한 국가의 중앙집권적, 통일적지도는 또한 사회주의경제관리의
기본원칙이다.

국가의 중앙집권적, 통일적지도와 계획적경제관리원칙을 떠나서는 경제분야에서
사회주의를 지킬수 없고 사회주의경제를 발전시킬수도 없다.

사회주의경제관리에서 아래단위의 창발성을 높이 발양시켜야 하지만 그것은
어디까지나 국가의 중앙집권적, 통일적지도를 확고히 보장하는 기초우에서,
사회주의계획경제의 테두리안에서 이루어져야 한다. 국가적리익,
전인민경제적리익에 맞게 가장 큰 실리를 보장할수 있도록 계획을 세우며 나라의
모든 생산잠재력을 최대한으로 동원하고 전반적경제발전에서 관건적인 의의를
가지는 대상들에 력량과 자원을 집중하여 경제의 계획적, 균형적발전을
이룩하는것은 국가의 중앙집권적, 통일적지도에 의해서만 옳게 실현될수 있다.
아래단위의 창발성을 높이고 《독자성》과 《자립성》을 강화한다고 하면서
경제관리, 기업관리를 풀어놓는 방향으로 나간다면 아래단위들이 국가의
통일적지도와 통제에서 벗어나 제멋대로 움직이게 되며 국가적으로 막대한
랑비와 손실을 가져오는것은 물론 경제분야에서 사회주의를 지킬수도 없
사회주의경제를 발전시킬수도 없다.

국가의 중앙집권적, 통일적지도를 강화하는것이 사회주의경제관리개선의
기본요구로 되는것은 다음으로 경제에 대한 국가의 중앙집권적, 통일적지도를
강화하여야 자력갱생의 원칙에서 모든 잠재력을 최대한 동원하여 나라의 경제를
비약적인 발전단계에 올려세우고 사회주의경제강국건설을 다그칠수
있기때문이다.

오늘의 대고조는 자력갱생의 기치를 더 높이 들것을 요구하며
사회주의경제강국은 자력갱생의 강국, 위력한 자립적민족경제의 강국이다.

우리는 위대한 수령님과 경애하는 장군님의 현명한 령도밑에 자력갱생의
혁명정신을 높이 발휘하여 사회주의자립적민족경제의 토대를 튼튼히 마련하였다.
이미 마련된 자립적경제토대의 잠재력을 최대한 동원리용하는것은 오늘의
형편에서 우리 식으로 나라의 경제를 비약적인 발전단계에 올려세우
사회주의경제강국건설을 다그치는 가장 정확한 길이다.

우리앞에는 의연히 많은 난관이 가로놓여있지만 전체 인민의 무궁무진한
창조력과 우리의 자원과 기술, 우리 제도의 우월성에 의거하여 승리의 진격로를
열어나가야 한다.

이미 마련된 자립적민족경제토대의 잠재력을 최대한 동원하여 나라의 경제를
비약적인 발전단계에 올려세우고 사회주의경제강국건설을 다그치자면 경제에
대한 국가의 중앙집권적, 통일적지도를 강화하여야 한다.

우선 국가의 중앙집권적, 통일적지도를 강화해야 인민대중의 지향과 요구에 맞게
경제의 균형적이고 조화로운 발전을 보장할수 있다. 현시기 경제건설에서
우리앞에 나서는 중요한 과업은 사회주의계획경제의 우월성에 의거하여
생산정상화와 현대화를 밀접히 결합시켜 힘있게 밀고나감으로써 인민경제 모
부문에서 최고생산수준을 결정적으로 돌파하는것이다. 국가의 중앙집권적,
통일적지도를 강화하는 조건에서만 당의 정책적요구에 맞게 국가적리익의
견지에서 나라의 모든 생산잠재력을 최대한 동원하여 선군시대의 총진군속도를
창조할수 있으며 이와 함께 경제발전에서 관건적인 의의를 가지는 대상들을
중심으로 생산적련계를 조화롭게 하고 경제사업에서 계획성과 규률성을 보장하여
전반적경제의 균형적발전을 이룩함으로써 사회주의경제강국건설을 다그칠수
있다.

또한 국가의 중앙집권적, 통일적지도를 강화하여야 개별적부문과 단위, 지방의
창발성을 높이 발양시켜 자립경제의 잠재력을 적극 동원리용할수 있다.

경제강국을 건설하는 과정에는 부족한것도 있고 없는것도 있을수 있다. 따라서
인민경제 모든 부문, 모든 단위에서 있는 밑천을 가지고 생산을 정상화하
최고생산수준을 돌파하기 위하여서는 매개 부문, 단위의 창발성을 높이
발양시켜야 할 요구가 제기되게 된다.

경제에 대한 국가의 중앙집권적, 통일적지도를 원만히 실현하여야 모든 부문,
모든 단위의 창발성을 집단주의에 기초한 사회주의경제발전의 본성적요구에 맞게
발전시킬수 있으며 예비를 동원하고 리용하는데서 경제적효과성을 결정적으로
높일수 있다.

경제에 대한 국가의 중앙집권적, 통일적지도를 강화한다는것은 결코 아래단위의
창발성을 무시한다는것을 의미하지 않는다. 사회주의경제건설은 국가의
통일적지도와 아래단위의 창발성을 옳게 결합시킬 때 성과적으로 진행될수 있다.
그것은 국가의 중앙집권적, 통일적지도가 전사회적범위에서 경제가 조화롭게
발전될수 있게 한다면 아래단위의 창발성은 공장, 기업소들이 국가가 세운
경제계획에 따라 있는 예비와 생산잠재력을 적극 탐구동원하여 생산을 늘이
자체로 생산기술공정을 완비하도록 추동하기때문이다. 만일 매개 단위의
경영활동이 국가에 무조건 복종되여야 한다고 하면서 아래단위를 얽어매놓으면
공장, 기업소들의 창발성이 억제되여 생산을 원만히 진행할수 없게 된다.
그러므로 경제에 대한 국가의 중앙집권적, 통일적지도는 아래단위의 창발성을
더욱 높이는것을 전제로 한다.

모든 경제지도일군들은 국가의 중앙집권적, 통일적지도에 대한 옳은 인식을
가지고 이를 옳바로 실현함으로써 사회주의계획경제의 참다운 우월성을 높이
발양시켜나가야 할것이다.”

Stephan Haggard posted a link to (and translation of) some clandestine video footage shot in Pyongyang’s Moran Market (모란시장) and broadcast on KBS. I don’t have much to add except a satellite image of the area where the video was shot.  It matches the video!

Pictured Above (Google Earth: 39.043922°, 125.747335°) is the Moran Market. See it in Google Maps here.

Pictured above (Google Earth): The Kangdong Market (39.134801°, 126.109387°)

According to the Daily NK:

It has been revealed that the cost of living in Pyongyang has more or less held steady over the past month, despite a modest decrease in rice prices.

According to sources in Pyongyang, one kilogram of rice is trading for about 1,900 North Korean won, which represents a fall of about 100 won on June prices. It is thought that a modest easing of the exchange rate of North Korean Won against Chinese Yuan and the importation of a large amount of rice from China are partially responsible for the change.

“Chinese rice is currently selling for roughly 200-300 won less than Chosun (North Korea) rice,” one source said, explaining, “Chinese merchants and the like brought the rice into the country en masse at the start of the year when the price of rice was rising, but now it’s not selling so well. The price of rice has fallen across the broad and is fluctuating at around the 2,000 won mark.”

At the end of January, the price of a kilogram of rice temporarily soared past the 3,000 won mark. There was some speculation at the time that wholesalers were colluding to raise prices. After the price went up, a natural increase in market supply and a drop in purchasing power from currency redenomination kicked in to force prices back down. Since then it has more or less stabilized at around the 2,000 won per kilogram mark again.

The price for corn, which usually trades for about half the price of rice, has also recorded a small fall to 850 won per kilogram, down 130 won on last month’s prices. Pork prices are stable at 5,800 won per kilogram, which is the same price as last month.

Moreover, second-hand clothes are showing brisk trade on the market. One source attributed their popularity to the fact that they sell for less than half the price of new clothes.

Additionally, the source claimed that the warmer weather is encouraging more people to purchase sleeveless and short-sleeve shirts, as well as shorts and skirts. “Sleeveless shirts are prohibited by the authorities, so people only wear them at home. Mostly young people are doing this,” he said.

“Short-sleeve shirts, shorts and skirts are selling like hotcakes as well, but it is required that the latter two items go down past the knees.”

The cost of living in North Korea has more or less returned to the levels they were at before the currency redenomination. It is business as usual at the jangmadang, but with trade volume well down from what it was before. The source explained that, while people are not holding onto cash as a result of the currency revaluation, it is only food items and lifestyle goods that are selling relatively well, while sales of high-ticket electronic goods have actually decreased.

Here is the price data collected from the Kangdong Market on the outskirts of Pyongyang (JPG):

Left: June 2011, Right: July 2011

Links to the discussion of North Korea’s food crisis can be found here.

Read the full story here:
Market Prices Stable, Sleeveless Shirts Popular
Daily NK
Choi Cheong Ho and Park Sung Kook
2011-7-20

Pictured above (Google Earth): Hyesan City, capital of Ryanggang Province

According to the Daily NK:

A campaign to beautify the streets of Yangkang Province [Ryanggang, 량강도] has begun to anger local residents, according to sources.

The beautification campaign has been implemented nationwide in preparation for next year’s planned festivities. In Yangkang Province this has translated into residents being compelled to lower fences, erect gables along roof lines and lime wash walls.

A source from the province reported on Tuesday, “An instruction came down from the Urban Management Department of the municipal committee of the Party telling us to ‘destroy all fences over two meters in height’. Now people are saying that only the thieves are happy.”

North Korean fences have traditionally been made with brush wood or bamboo, and more recently with planks of wood. In the early 1990s, the height of most fences was around one meter, but as the economic situation got worse, the fences got concomitantly higher. Now, there are three meter high fences in some places, according to defectors.

The source explained the residents’ fears, saying, “We built fences that high using our own money because there are so many thieves. But, the authorities have ordered us to destroy the high fences, so people are really annoyed.”

He went on, “Some people have even built their storage areas with the high fences forming part of the walls. So, at a time when they should be in the jangmadang, they have been destroying their storage along with the walls. Therefore, people are calling it a life and death situation.”

A second instruction has been to place gables on roofs in order to make them more aesthetically pleasing.

Another source explained, “There was an instruction to build gables a month ago, so people dug clay soil from the mountains and built the gables. But, during the rainy season, the roofs started leaking.”

He added, “People ask what they are meant to do to put gables on tumbledown old houses.’”

According to the source, the beautification campaign began when a person who used to be the chief manager in charge of Yangkang Province Guidance Department of the Central Committee of the Party was appointed as Chief Secretary of the Provincial Committee of the Party (in 2009). People supposedly complain that he is tormenting people to garner a promotion.

In a similarly arbitrary process in 2000, Kim Jong Il caught sight of an apartment veranda with glass across it during a visit to Shinuiju, and summarily declared that all verandas should be so equipped. As a result, people had to add glass to their own verandas.

The competition to get as much glass on as many apartments as possible was fierce, according to sources, but then suddenly Kim, during a later onsite inspection in Hyesan, declared that all the glass was making apartments look like prisons, so it was all duly taken down again.

People thus assume that the energetic implementation of the current campaign is rooted in the desire of local officials to impress Kim Jong Il, a fact which is not improving their view of the situation.

Read the full story here:
Party Calls for Lower Fences and Splendid Gables
Daily NK
Lee Seok Young
2011-7-26

According to the Daily NK:

Young people in North Korea are emerging as proponents of Hallyu (the South Korean cultural wave) and as fashion leaders, showing themselves to be particularly keen on the South Korean music, movies, and fashion that are being smuggled into the country and traded.

On Wednesday, The Daily NK met with a Chinese merchant who conducts business in Pyongyang to find out about trends amongst young people in North Korea. He told us that, “Hooded sweatshirts are enjoying immense popularity with young people at the moment.” The reason, he explained, is that, “They want to emulate the fashion they see in South Korean dramas.”

He added, “At the jangmadang, hooded sweatshirts sell for about 200 Yuan (around US$31), so they’re not cheap, but so many people come looking for them that we almost run out of hooded sweatshirts to sell.”

The source explained that, in spite of this, South Korean brands and products with English lettering are prohibited from being sold.

“As the days get hotter, people are looking to get their hands on short-sleeve clothing. Light-colored clothing is most popular,” he noted, also mentioning that, “In general, new clothes sell for about 15,000 won and second-hand clothes for about 3,000 won.

One-piece dresses are in vogue with females as summer takes hold. These dresses tend to sell at the jangmadang for around 70,000 won. Additionally, the source said, “There are lots of young ladies looking for high-heel shoes, which go for about 25,000-30,000 won. Skinny jeans are as popular as ever, and you see lots of people walking around in three-quarter pants.”

He also mentioned that many people are taking advantage of the opportunity to wear shorts and sleeveless shirts to beat the humidity.

However, authorities have already cracked down on “inappropriate attire” for women, for example by banning skirts that do not go down past the knee. The sleeveless shirts, short skirts and pants that have become fashionable in recent times are difficult to wear out of the house because a person wearing them would become a target of the Union of Democratic Women’s community watch guards.

Regarding this, the source said, “People get punished for wearing shorts or skirts that don’t come down past the knee. The UDW’s community watch guards are in every lane and alleyway inspecting women (who break the law). Sleeveless clothes do sell, but nobody can wear them. So they just wear such items at home.”

Furthermore, he mentioned that, “Young ladies walk around wearing earrings and bracelets,” explaining that, “Bracelets, watches, rings and hairpins all tend to be popular itemsbecause people think they’re pretty.” North Korean authorities restricted the wearing of accessories in the past, but appear to have eased off on this policy in recent times.

He relayed that crackdowns on South Korean-made goods are as common as ever. According to him, those who get caught in the crackdowns have their goods confiscated on the spot. “The crackdowns on South Korean goods are still going strong,” he said. “At the outdoor market, the patrolling officers are checking practically every item tag now. That’s how serious it has got.”

“The intensity of crackdowns on South Korean movies and dramas on DVD that are coming into the country is always increasing,” he said, “but university students and young people in general are getting hold of South Korean and other foreign movies and selling them in secret.”

South Korean dramas and movies usually sell for 5,000 won (a normal DVD sells for 1,300 won), and at the moment IRIS, Assorted Gems, Slave Hunter, Queen of the Game and Smile, Mom are said to be the most popular.

Read the full story here:
Fashion Also Influenced by South Korean Culture
Daily NK
Choi Cheong Ho
2011-7-21

Pictured above (Google Earth): Two official marketplaces in Kaesong highlighted in yellow.  South Korean treats are popular in these markets.

According to the Daily NK:

Shin Ramen (a brand of instant noodles), Choco-pies and coffee mix, the snacks offered to Kaesong Industrial Complex workers, leak out and are now very popular in the jangmadang in Kaesong, according to sources.

The news was revealed by a South Korea government official and a staff member from an enterprise in the Kaesong Complex on the 15th.

North Korean workers often ask their employers for Shin Ramen uncooked and packed so that they can sell it in the jangmadang to augment their wages, according to the Ministry of Unification.

One staff member from a company stationed in the Kaesong Industrial Complex explained, “The time when the North Korean workers are given Shin Ramen, Choco-pies and coffee mix is the time they look forward to the most.”

“I am aware that North Korean workers take the several ramen given to them at snack times or when doing evening overtime back into North Korea,” he added. “They sell the ramen they take for roughly the same price as a kilo of rice. But it is not just Shin Ramen; Choco-pies are very popular with the North Korean workers, and they also use Shin Ramen soup as a seasoning at home.”

Kaesong Industrial Complex companies are known to get assistance from domestic companies, so pay less than market price for the Shin Ramen and other snacks that they offer to workers.

The company staff member said he saw the situation in a positive light, explaining,, “There have been almost no inter-Korean exchanges of late, so in this situation the Shin Ramen and Choco-pies and other things offered by enterprises provide a link between the North Korean people and South Korea. If the workers take the Korean-made products and sell them in the jangmadang then not just the workers but also the North Korean people get to know about South Korea.”

Unfortunately, meanwhile, although workers in the Kaesong Industrial Complex receive a wage of approximately $100/month, they are not free to keep it. 30% is taken by the North Korean authorities in the form of a ‘Socialist Culture Policy Tax’, and other costs are extracted as well. Therefore, the take-home pay is around $30/month, although even this is not paid in cash but in the form of an exchange coupon.

A Ministry of Unification explained one part of that system, saying, “Most of the money and other things that come from the South go to the central North Korean authorities, but a proportion goes to Kaesong city authorities. That money which goes to Kaesong City is meant to be for the purpose of buying rice for distribution to the local people.”

There are now approximately 46,000 North Korean workers in the Kaesong Complex, and complex operations are, as such, a $4.6 million monthly subsidy for the North Korean authorities.

Despite the measures put in place by the South Korean government following last year’s Cheonan and Yeonpyeong Island incidents, the number of workers earning money in Kaesong has continued to expand. According to the Ministry of Unification, at the end of February there were 46,420 workers, an 11% increase on one year previously. Earnings have also risen significantly in the same period.

Donald Kirk was the first (of whom I am aware) to write about the subversive nature of Choco Pies back in May 2009.

Read the full story here:
Shin Ramen Popular in Kaesong Jangmadang
Daily NK
Kim Yong-hun
2011-7-15

Pictured above (Google Earth, October 2010): (left) informal street market in Hadang-dong, (right) official market in Hadang-dong

According to the Daily NK:

Sources have reported a large increase in the number of ‘grasshopper traders’ in the alleyways around many of North Korea’s markets.

‘Grasshopper traders’ are individuals who conduct their trade activities without an official permit beyond official market boundaries, meaning that when security forces arrive they have to jump, like grasshoppers, to a new location. Growth in this kind of phenomenon would tend to suggest that the class of capital-holding middle class traders is shrinking, while the number of those trading day-to-day in order to make ends meet is growing. It is also related to the fact that official efforts to eliminate grasshopper trading are not as strict as they have been.

One source living in the traditionally more affluent capital, Pyongyang, explained to The Daily NK today that even there, “The number of grasshopper traders has increased a lot of late. There are too many to count,” adding that in the case of Hadang Market, the normal 100-200 grasshopper traders has grown to between 300-400 over a very short period.

Another source from Yangkang Province agreed, saying, “There are grasshopper traders camped in every alleyway around Hyesan Market. People are coming in twice the numbers they normally do, so cracking down on them is not easy.” Other local sources have revealed that markets in the provinces of North Hamkyung and Pyongan are in much the same state.

As expected, with an increasing degree of grasshopper trading comes an increasing number of market watch guards. However, whereas in the past those caught engaging in grasshopper trading stood to lose their wares, nowadays grasshopper traders are just warned about their conduct.

The Pyongyang source explained, “The number of market watch guards has increased by around ten, but their crackdowns are much weaker than they used to be. I know that the authorities have ordered them not to confiscate traders’ wares by force, just to enforce public order.”

This appears to be because the authorities fear that some of their excesses are inflicting too much harm on public opinion.

The Pyongyang source explained, “In many cases people oppose the young market watch guards’ attempts to take the belongings of traders by force, saying ‘they are worse than the Japanese’, and the authorities seem to care about that.”

Officials and the security forces are also being careful about their conduct because of fear of investigation, and this may also be affecting the market environment. Rumors are circulating which suggest that some cadres are being punished for things such as taking bribes.

On this point, the Pyongyang source added, “The central Party is conducting an inspection of the public organs charged with controlling the markets. The word is that people working for these organs are being investigated for things like taking bribes, going to the homes of traders to demand things, or just taking what they want from market stalls.”

Read the full story here:
Grasshopper Numbers Rising Fast
Daily NK
Choi Cheong-ho
2011-7-4

According to Bloomberg:

North Korean rice prices have quadrupled this year amid concern the regime is facing further economic isolation, according to a South Korean research report.

Rice prices jumped to as much as 2,200 North Korean won per kilogram during the first six months of the year from about 500 won at the end of 2010, South Korea’s state-run Korea Development Institute said today in an e-mailed statement. The difference was mostly caused by a slump in the domestic currency, which is a factor the government considers in setting the price, the report said.

North Korea’s won is not freely traded though the U.S. dollar is the de facto currency used in many markets.

South Korea in May last year cut off most trade with North Korea, accusing Kim Jong Il’s regime of torpedoing one of its warships in March that killed 46 sailors. The U.S. is assessing whether to provide food assistance to North Korea, which is also under United Nations sanctions for its nuclear tests.

The North Korean currency has weakened “sharply” since the regime shelled South Korea’s Yeonpyeong island in November amid concerns worsening relations will lead to further shortages of goods, the report said. North Korea has also increased coal exports to China to make up for the shortfall in trade with South Korea, causing energy shortages, it said.

While the regime lifted its ban on street markets that was placed at the end of 2009, high prices and goods shortages are preventing them from helping meet North Koreans’ needs, the report said.

Read the full story here:
North Korean Rice Prices Quadruple
Bloomberg
Bomi Lim
2010-7-5

Anju’s outdoor market

Voice of America published a series of photos from inside the DPRK. Many of the pictures are from Anju. Looking through them, I saw this outdoor market of which I was unaware.  It did not, however, take too long to find it on Google Earth. The coordinates of the outdoor market are 39.623199°, 125.680848°. Anju and nearby Sinanju both also have one covered market each.  Lots of shoes for sale.

UN Conference on Disarmament
The winner of the “rolling eyes” award this week goes to the announcement that the DPRK has been named to the presidency of the United Nations Conference on Disarmament.  According to the official press release:

In his initial address to the Conference as president, So Se Pyong of the Democratic People’s Republic of Korea said that he was very much committed to the Conference and during his presidency he welcomed any sort of constructive proposals that strengthened the work and credibility of the body. He was ready to work closely with all members to provide the grounds for strengthening their work. As president, he would be guided by the Rules of Procedure and take into account the position of each delegation to find common ground on substantive issues and procedural matters as well. With their support and cooperation, he would do everything in his capacity to move the Conference on Disarmament forward.

I am sure you can think of some recommendations for him!

Canada has since boycotted the committee (2011-7-11).

How to Generate Good Press: Write it
This week the Wall Street Journal’s Korea Real Time had a great post about the North Korean proclivity to purchase advert space in foreign publications and then report “favorable coverage” to the people back home.  ”See how much foreigners envy us and out leader[s]“?!

Paying for space in Blitz actually represents something of an economy drive for the Pyongyang publicity machine. Back in 1997, as famine gripped the land, the regime shelled out for some pricier real estate: a full page in the New York Times. That allowed the KCNA to boast that the U.S. newspaper of record had “dedicated one whole page to a special writeup under the title ‘Kim Jong Il Emerges As Lodestar For Sailing the 21st Century’”—with, as the KCNA noted, a large color picture.

Here are five stories from KCNA citing praise in the New York Times: KCNA 1, KCNA 2, KCNA 3, KCNA 4, KCNA 5.  As far as I can tell, the DPRK has never advertised in the Wall Street Journal.  Wouldn’t that be something.

DPRK: There’s an app for that
Martyn Williams writes about Eric Lafforgue’s new iPhone app featuring his pics of the DPRK.  His photo set is here.  Now all we need is a Kernbeisser iPhone app.