Report: Markets may bring social change to North Korea

SEOUL – North Korea remains one of the most tightly controlled economies on earth, however capitalism is becoming an ever-larger force inside the isolated nation.

There are at least 436 officially sanctioned markets located across the country, according to research released this week by the Center for Strategic and International Studies, a Washington-based think tank. They sell everything from socks to cosmetics to noodles.

The markets bring in an estimated $56.8 million a year through taxes and rents paid by vendors to the state, and have “become an institutionalized part of North Korean society,” according to the research, which was done in partnership with the North Korea Development Institute in Seoul.

“The growth of markets is the single most significant socioeconomic development to occur in North Korea over the last 20 years,” wrote the study’s authors, Victor Cha and Lisa Collins.

The first official markets were allowed to operate in 2002, emerging in the wake of a black market economy that sprung up after the collapse of support from the Soviet Union and a devastating famine in the 1990s.

The markets range in size from a few thousand square feet to the massive 250,000-square-foot Sunam market in Chongjin, North Korea’s third-largest city, which generates an estimated $850,000 a year for the government, according to the CSIS study.

North Korea, particularly the capital city of Pyongyang, has seen a nascent middle class emerging in recent years, able to shop for refrigerators and washing machines at the threestory Kwangbok Area Shopping Center, or sample hamburgers at a chain of fast-food restaurants.

In addition to official markets, a thriving black market exists. Originally supplying North Koreans with muchneeded food and necessities, it has evolved over time to provide items such as cell phones and media from the outside world, including South Korean television shows and Chinese films.

North Korean leader Kim Jong Un has accelerated economic reforms since coming to power in 2011, and this year in particular he has emphasized developing North Korea’s economy. In April, he announced that the nation would be ending its dual-track policy of economic growth and nuclear weapons development and instead would “focus all of its energy on building a socialist economy.”

However, North Korea’s economy remains stifled by strict international sanctions imposed in reaction to its nuclear weapons program. The economy shrank by 3.5 percent in 2017, according to South Korea’s central bank – it’s worst showing in two decades.

Washington has held a hard line, saying the sanctions won’t be lifted until North Korea denuclearizes.

Potonggang department store staff stock shelves with local and imported snacks in Pyongyang, North Korea. AP