The real revolution in N. Korea is rise of consumer culture
PYONGYANG, NORTH KOREA » Like all North Korean adults, Song Un Pyol wears the faces of leader Kim Jong Un’s father and grandfather pinned neatly to her left lapel, above her heart. But on her right glitters a diamond-and-gold brooch.
Song is what a success story in Kim Jong Un’s North Korea is supposed to look like. Just after Kim assumed power in late 2011, she started managing the supermarket floor at a state-run department store, which has freezers stocked full of pork and beef and rows of dairy, bakery and canned goods. She watches as customers fill their shopping carts, take their groceries directly to be scanned at the checkout counter and pay with cash or bank debit cards.
Song is part of a paradigm shift within North Korea: Three generations into the Kim family’s ruling dynasty, markets have blossomed and a consumer culture is taking root. From 120 varieties of “May Day Stadium” brand ice cream to the widespread use of plastic to pay the bills, it’s a change visibly and irreversibly transforming her nation.
While Kim has in recent weeks gained attention for his threat to fire missiles near Guam, his trademark two-track policy focuses on the development of both nuclear weapons and the economy. His acceptance of a more consumer-friendly economy is meant to foster economic growth and bring profits into the regime’s coffers. But like his pursuit of nuclear weapons, it’s a risky business.
Facing even more international sanctions and a flood of Chinese imports that has generated a huge trade imbalance, there are good reasons to believe the North Korean economy is in a bubble that could soon burst. Prices for gasoline imports have soared more than 200 percent in less than six months, the AP has found. The price of rice is also believed to be sharply rising, although harder to independently confirm because of the difficulty in visiting local markets.
The new round of sanctions announced by the U.N. earlier this month will make it harder for the North to export its goods, cap the number of laborers it can send abroad — an important source of foreign currency for the regime — and limit the growth of joint ventures. North Korea will be hit particularly strongly by a Chinese ban on several key products, including coal, iron ore and seafood.
The problem, however, goes deeper than that.
Market forces bring new forms of competition, uncertainty and change that are the antithesis of the centrally controlled, state-run economy of the North Korea of old. Markets are like a genie offering to grant the wish of wealth — but at the potential cost of political instability.
Once the genie has been released from its bottle, it’s very hard to put it back in. GUNS AND BUTTER The North Korean consumer landscape has evolved dramatically under Kim Jong Un.
In keeping with his father, whose motto was “Military First,” Kim devotes nearly a quarter of North Korea’s estimated $30 billion GDP to defense spending, which is a far higher military burden than any other country in the world. But his new slogan of “Parallel Development” — guns and butter, so to speak — reflects an inescapable reality of his era:
In the 1990s, North Korea nearly imploded when the Soviet Union and its satellite empire collapsed. Reeling from floods, famine and an overwhelmed bureaucracy, it could no longer afford the public distribution system many North Koreans had depended on for their basic needs. This change sparked a wave of grassroots barter and trade, which has swollen into the burgeoning market economy today.
Life in rural North Korea is still marked by far more hardship and scarcity than in its urban areas, and is hard even to compare to the showcase capital, Pyongyang. Yet there is, surprisingly, a bustling, almost booming, feeling in many parts of the country.
Under a 5-year plan for the economy Kim Jong Un announced last May, North Korean factories are putting a new priority on making more and better daily-life products. Managers, meanwhile, have more freedom to decide what to make, how much to pay their workers and how to forge profitable partnerships. Along the roads into virtually every city, street vendors, usually weatherbeaten old women, sell fruits, vegetables and other food. In the cities, bazaarstyle markets, shops and department stores are full of people. The shelves are lined with dozens of brands of domestically made cigarettes, sugary soft drinks and colorfully packaged chips or canned soups.
In specialty shops, the latest “Pyongyang” model smartphones — probably Chinese-made but rebranded to have a locally made appearance — go for $200. Apps to put on them, like the popular “Boy General” role-playing game, are $2 a pop. Pyongyang’s premier brewery, Taedonggang, just added an eighth kind of beer to its product line, which already includes beers dark and light, and even one that is chocolatey.
Despite the ever-tightening sanctions, consumer products are still coming in from all over the world. Buying a can of Pokka coffee from Japan is easy, and costs about 80 cents. Purchasing a Mercedes-Benz Viano might require some connections, but it is doable — for a $63,000 sticker price.
On the country’s bumpy highways, caravans of crampacked long-distance buses and trucks hauling goods from city to city are common. More products made in Pyongyang are found in rural areas these days, and vice versa. Although the use of U.S. dollars or Chinese yuan remains widespread, more people are using prepaid cards or local bills at the checkout counter — suggesting greater buying power in general and more confidence in the stability of the national currency.