• 214 days Could Crypto Overtake Traditional Investment?
  • 219 days Americans Still Quitting Jobs At Record Pace
  • 221 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 224 days Is The Dollar Too Strong?
  • 224 days Big Tech Disappoints Investors on Earnings Calls
  • 225 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 226 days China Is Quietly Trying To Distance Itself From Russia
  • 227 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 231 days Crypto Investors Won Big In 2021
  • 231 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 232 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 234 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 235 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 238 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 239 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 239 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 241 days Are NFTs About To Take Over Gaming?
  • 242 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 245 days What’s Causing Inflation In The United States?
  • 246 days Intel Joins Russian Exodus as Chip Shortage Digs In
Charles Benavidez

Charles Benavidez

Staff Writer, Safehaven.com

Charles Benavidez is a writer and editor for Safehaven.com. Charles is located in New York City and has over 5 years of experiencing covering financial…

Contact Author

  1. Home
  2. Markets
  3. Emerging Markets

What Does Capitalism Look Like In North Korea?

North Korea

A bit of capitalism flows in any society, even North Korea. It’s a natural offshoot of the human condition—that drive to survive self-sufficiently; that uncontrollable desire to … sell something. It’s the entrepreneurial spirit, and it’s hard to suppress entirely, even for all-controlling Pyongyang.

So markets, according to a recent joint study by a Washington-based think tank and a South Korean counterpart—are very much part and parcel of North Korean life, even if they don’t operate exactly the way we think.

According to the study, North Korea has 436 officially sanctioned markets that bring the government an estimated $56.8 million in revenue from fees, rents and taxes. North Korea even has a glossy 2018 ‘commodities’ catalog designed to show off a new line of consumer goods.

The study, called Beyond Parallel, says both rural and urban markets “appear to be deeply integrated into both the economy and society”, with an average of 48 markets in each of the nine provinces. However, the study noted, while the people demand “bottom up marketization”, the government has long sought to “control, manipulate, and institutionalize the markets”.

Since July 2002, North Korea has allowed official, state-sanctioned markets to operate. Since then, markets have expanded rapidly, forcing Pyongyang to introduce more regulations in order to reduce inflation and manage supply and demand imbalances, among other things.

But there are also unofficial markets, or black markets that are sometimes allowed to operate and sometimes targeted by raids, with vendors made to pay bribes to continue operations. Related: Gold, Silver Up As Trade War Fears Take A Breather

And mobile communications are contributing to the solidification of the North Korean market trend, even if consumers can only communicate through the state’s intranet and closed cellular system. It still “suggests there is evidence that a latent civil society could be emerging around these markets as citizens share information, commerce and further promote growing autonomy of livelihood through these markets”, Beyond Parallel said.

As they communicate more, they come to realize that the government simply isn’t providing them with what they want, based on microsurveys conducted by the researchers. A full 100 percent of respondents told surveyors that the government’s public distribution system “does not provide them with what they want for a good life”. And a massive 72 percent said they received almost all of their household income from markets, while 83 percent said that goods and information from outside North Korea were of “greater impact on their lives”.

Beyond the markets, which may be permanent buildings or open-air collections of vendor stalls, Pyongyang is hoping that a new line of “Made in North Korea” goods will help it works towards economic sustainability.

Pyongyang is pushing everything from a disproportionate list of beverages and bags of cement to cures for cancer, a homegrown take on Viagra and ostrich skins, according to the Associated Press. International sanctions means none of the gems in Pyongyang’s 207-page catalog will be tempting shoppers outside the country any time soon, but there’s a fair amount of symbolism to be found here—and for once, it’s not about nuclear weapons.

By Charles Benavidez for Safehaven.com

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment