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N. Korea's Private Markets Thrive Despite Regime

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N. Korea's Private Markets Thrive Despite Regime

N. Korea's Private Markets Thrive Despite Regime

N. Korea's Private Markets Thrive Despite Regime

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  • <iframe src="https://www.npr.org/player/embed/104841473/104841454" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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In North Korea's broken, dysfunctional economy, scattered signs of business activity actually exist. There are open-air markets where people come to buy and sell clothes, rice, noodles and vegetables. The government allows these private markets to exist because people are in such dire need of food and clothing. But they also pose a challenge to the regime's absolute control of the economy.

MELISSA BLOCK, host:

Here in the U.S. we think of North Korea as being impossibly sealed off, a complete mystery. But Adam Davidson from NPR's Planet Money team says you can learn an awful lot sitting at home with a laptop computer. And he joins me now from our New York bureau. And Adam, you're going to take me today on a Google Earth tour of North Korea, right?

ADAM DAVIDSON: I want to show you something in North Korea that from what most analysts believe is absolutely terrifying to the regime of North Korea. And in Google Earth you have the special North Korea plugin - courtesy of North Korea Economy Watch. If you click on the left under places, it says shops and markets.

BLOCK: Yeah, the whole listing of shops and markets here.

DAVIDSON: And if you just click on that button next to shops and markets…

BLOCK: Yeah.

DAVIDSON: You suddenly see…

BLOCK: Oh yeah, the whole country just filled up.

DAVDISON: The whole country filled up. The ones that the analysts believe is really scaring the powers that be in North Korea are way up in the northeast.

BLOCK: Okay, so, Adam, I've zoomed pretty far in here and I'm seeing two markets, actually, one is called the Hyesan street market, and then there's a very big structure - it looks like it's several city blocks long that just says Hyesan Market.

DAVIDSON: Exactly. And it's the difference between those two markets that sort of tells you what has been happening in North Korea in the last few years. Starting in the famine of the 1990s, you had these street markets, and you can see, Melissa, right, it's probably just some people with some stands. That's how this started. It wasn't a decision from top down like things usually happen in North Korea - just people were hungry. The state wasn't providing their basic necessities anymore, and so they'd make food. They'd get some rice and turn it into rice noodles, or they'd get a chicken and sell the eggs.

But then the state got really scared and they thought, oh my goodness, if people are providing their own necessities, that's what happened in the Soviet Union and they collapsed. We want to be more like China. We want to co-opt this free-market activity, and that's what we see in the southern market that you talk about, this really developed one.

BLOCK: Well, what's going on at that market, Adam? Who's selling there? Do we have any idea? And where's the money going?

DAVIDSON: So, let's leave Google Earth and now let's go to the Web, to YouTube.

BLOCK: Okay.

DAVIDSON: I sent you a video called Jamadang Market in North Korea.

BLOCK: Yeah, this is footage made in August of 2005.

DAVIDSON: Right. And it says a film made by Free North Korea Broadcast.

(Soundbite of marketplace)

DAVIDSON: The North Koreans do not allow cameras to enter these markets, because, still, the official story is the government of North Korea provides everything, so this footage, to me, gets kind of exciting. It's clearly a camera snuck in a bag.

BLOCK: Yeah. You can see there's this little circular vantage point, sort of like a peephole.

DAVIDSON: And I got to say, what struck me is how just normal it looks.

BLOCK: People are selling what looks like some fruit. I've seen boots, some pots and pans. When you talk to economists, Adam, are they giving you any sense that markets like this one that we're watching on YouTube right now - that it's changing anybody's standard of living in a substantive way? That the economic picture is really turning around in any sense?

DAVIDSON: There isn't an awful lot of information, but it does seem that there are more goods and a wider variety of goods available than there were, certainly in the '90s, but that is not to say that people are living dramatically improved lives. I want to show you one of the other things that really fascinates me on this Google Earth. Click on Elite Areas.

BLOCK: Yeah.

DAVIDSON: You can zoom in. I think you're zoomed into an elite neighborhood in Pyongyang.

BLOCK: Right. Right by the river.

DAVIDSON: And I mean this looks ridiculously opulent, right? I mean…

BLOCK: It does. Huge houses, mansions, I guess, and surrounded by trees.

DAVIDSON: And these are, of course, it might be generals, it might be high-ranking ministers - these are the people who were, at first, terrified of those markets we talked about. But what seems to be the case, as far as we can tell now, is what they figured out is how to co-opt those markets. And what seems to be happening now is those markets are rife with the kind of corruption you see throughout North Korea. So maybe there's a guy selling lemons and making a few pennies, he kicks some money up to whoever manages the market, that guy kicks some money up to maybe a regional official, who kicks some money up to Pyongyang.

BLOCK: Yeah, it is ever so.

DAVIDSON: As it is ever so. Exactly. So, in the short run, anyway, it doesn't seem like this opening of markets is a real challenge to those very rich people living in these elite areas, but as we've seen with the Soviet Union and China, greater economic freedom does often eventually lead to greater political freedom.

BLOCK: Well, Adam, thanks for the Google Earth tour of North Korea.

DAVIDSON: Thanks for coming along with me.

(Soundbite of laughter)

BLOCK: NPR's Adam Davidson with our Planet Money team. And it's not just markets in North Korea, our Planet Money team covers economic stories all over the world at the Planet Money blog and podcast. That's at npr.org/money.

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