The jangmadang market system of North Korea

An informative yet entertaining new book, “North Korea Confidential: Private Markets, Fashion Trends, Prison Camps, Dissenters and Defectors” by journalists Daniel Tudor and James Pearson is exactly what one would want from people who know a few of the country’s secrets. It reads like a CIA fact sheet mixed with juicy anecdotes—and the authors have reassured readers that everything in it has been verified by three sources.

“The main cause of North Korea’s recent social change is actually a tragic one: the famine of the mid 1990s,” the authors write. That famine, which they estimate caused at least 700,000 people to die from starvation, gutted the control Pyongyang and the government had on the country as a whole. The reason is that when the government could no longer feed its citizens, North Koreans turned to a “quasi-capitalist market economy” to feed themselves. This undermined not only the power of the state, which lost a major source of its power (the collection and redistribution of food), but simultaneously opened up the country to a form of capitalism reliant on the outside world.

In the aftermath of the famine, an illegal but countenanced market system called the jangmadang took root. Under jangmadang, members of a family, usually married women who are exempt from state-mandated work units, sell a variety of goods. These can be family possessions, DVD players, phones, foreign currency, and so on. Families rely on income from these markets, as the official and unofficial exchange rates with foreign currencies have imploded, and the government has left much of the country outside of Pyongyang to fend for itself. The markets are so ingrained in society, the authors claim, that families not known to engage are often suspect because it is assumed they are obtaining wealth from defector relatives. One side effect of these markets is that women are often bringing home more money than their husbands, which undermines the traditionally patriarchal society.

The new North Korea depicted by the authors is dominated by this semi-capitalist form of life, and while most would imagine that would be difficult given the dictatorship’s image as a suffocating leviathan, the country has a new king—cash. Throughout the book, the authors stress that nearly every crime, from political to petty, can be resolved with a bribe. Get caught trying to cross the border? Pay the guard a bribe. Caught with foreign DVDs? Pay the inspector a bribe. Need anything? Pay a bribe.

[The Daily Beast]       Read more

How North Koreans make money

A lawless form of marketization has replaced the iron rice bowl of work in state companies, and many North Koreans think in terms of trade and profit.

There are a variety of ways one can make money in North Korea. For government officials (whose official salaries are neglible) it is access to things like the diplomatic pouch (for smuggling), the army (which is used more for construction projects than fighting), foreign North Korean-owned restaurants, weapons deals, or food rations that can be turned into cash.

For the average citizen, the entrepreneurial spirit is pretty astounding. In various neighborhoods in every major city, the authors claim, there is a middle-aged woman who rents apartments for sex by the hour. “Her preferred time will be in the afternoon, when her children are at school, and her husband is at work,” they write.

Or one can learn to perform a plepharoplasty, which is the surgery that gives people fold lines along the eyelids. “Those who do it well,” the authors note, “will benefit from word of mouth, and be able to make a good living.”

There are also those who have managed to get a Chinese phone that connects to the Chinese network. “Over half of those who have made calls out of North Korea with Chinese phones do not actually possess one themselves,” the authors explain. Instead there are phone owners who make their living renting out time on their illegal phones.

“North Korea’s new ‘system’ is unfair and Darwinian,” the authors write, “but at least gives the average person a sense of agency.”

[The Daily Beast]          Read more

Dispelling the myth of a brainwashed North Korean populace

Dispelling the myth of a brainwashed populace is one of the main goals of the book “North Korea Confidential: Private Markets, Fashion Trends, Prison Camps, Dissenters and Defectors”.

Despite horrific prison camps, lack of Internet, and a national fabric called “vinylon,” most people still take the risk to watch a foreign film, regularly consume South Korea pop culture, party, and even argue with the police.

The authors claim that, contrary to what one might expect, young people actually look forward to that time when they are sent away for compulsory agricultural labor because “it is an opportunity to party every night and meet members of the opposite sex.”

All of this, of course, raises the question of the country’s future. The authors Tudor and Pearson spend a chunk of the book outlining and explaining the North Korean power structure largely orchestrated by Kim Jong Il, from the Kim family itself to the shadow government dubbed—with true Communist rhetorical flourish—the Organization and Guidance Department.

Despite the slight erosion of central power, the authors don’t really think the regime is going away anytime soon. In fact, the authors compare the current shift to that which took place in the 16th and 17th centuries in Korea. At that time, the kingdom was under assault from both the Japanese and the Chinese, which partially cleared the decks among the ruling aristocracy and allowed the rise of a new group of merchants. Instead of trying to take over, however, the merchant chose to marry aristocratic families that had fallen on hard times, giving the new money status and the old fresh cash and blood.

Today, the authors contend, “The new, rising capitalist class generally seeks to join the existing elite through marriage and business ties, rather than undermine it.” But then again, this is North Korea, so who really knows what will happen.

[The Daily Beast]

S. Korean spy agency claims Kim Jong Un ordered 15 executions this year

North Korean leader Kim Jong Un ordered the execution of 15 senior officials this year as punishment for challenging his authority, South Korea’s spy agency told a closed-door parliament meeting on Wednesday.

A vice minister for forestry was one of the officials executed for complaining about a state policy, a member of parliament’s intelligence committee, Shin Kyung-min, quoted an unnamed National Intelligence Service official as saying.

“Excuses or reasoning doesn’t work for Kim Jong Un, and his style of rule is to push through everything, and if there’s any objection, he takes that as a challenge to authority and comes back with execution as a showcase,” Shin said. “In four months this year, fifteen senior officials are said to have been executed,” Shin cited the intelligence official as saying.

In 2013, Kim purged and executed his uncle, Jang Song Thaek, once considered the second most powerful man in Pyongyang’s leadership circle, for corruption and committing crimes damaging to the economy, along with a group of officials close to him.

Kim has also reshuffled close aides and senior officials repeatedly since taking office.

 [Reuters]

North Korean defectors say US should do more

A group of North Korean defectors converged Monday to call on the Obama administration to do more to help them topple dictator Kim Jong-un’s oppressive regime.

Scholte introduced some two dozen defectors at a National Press Club event to kick off the 12th annual North Korea Freedom Week. Their efforts to get information in and out of North Korea—through radio broadcasts, balloon drops, and other means—have led the country into the information age, ignited capitalism that is curbing starvation, and helped some 26,000 persons escape, Scholte said.

The defectors include a variety of organization leaders, prison camp survivors, and eyewitnesses to human trafficking, drug smuggling, propaganda dissemination, and illegal weapons trading. They will participate in various events throughout the week, including providing testimony to Congress on Wednesday, and at the United Nations in New York on Thursday. Twice this week the defectors will gather for events outside the Chinese Embassy in Washington, which has refused to treat North Koreans as refugees.

Scholte said defectors have proven highly effective at influencing the regime’s activities, but they don’t have the resources they need to do their jobs. The State Department has ended North Korea programs or severely cut funding over the last five years.

Despite that, he said, defectors refuse to quit: “The North Korean regime continues to threaten the people in this room, but they will not be intimidated.”

[WNG.org]

Addressing North Korean clichés and half-truths: Ignorance about the World

Excerpts from “North Korea: Markets and Military Rule” by Hazel Smith, as printed in The Guardian:

Perhaps the most pervasive myth is that North Koreans are ignorant of the world outside, and believe everything the government tells them. This is extended by the assumption that North Koreans are educationally backward, and lack the sophistication to understand the world beyond their borders.

North Koreans are anything but ignorant. With almost universal literacy, and despite economic deterioration, school enrolment – for girls and boys – remains near universal. About 35% of high school graduates went on to university education in 2002.

North Koreans are indeed subject to a relentless socialization campaign that glorifies the exploits of the Kim family and inflicts sanctions on those who criticize the country’s rulers. Yet despite the best efforts of the North Korean government, the picture of the DPRK as an absolutely closed society is far from the truth today.

The North Korean government works hard to prevent the free flow of information into the country. Students studying in Pyongyang have access to the major state libraries in the capital, which contain foreign books and films, but are only permitted to access these resources if they can demonstrate a “need” to do so, while access to the internet is limited.

However, a small number of students study abroad – about 500 were in Asia and Europe in 2002; in 2012, 96 North Korean students were studying at China’s Northeastern University alone.

Chinese traders and local trading networks have also provided routes for non-state sanctioned information for nearly a quarter of a century. Many Chinese traders and visitors are of Korean ethnicity, and three of North Korea’s north-eastern provinces border the Chinese prefecture of Yanbian, which is populated by ethnic Koreans of Chinese nationality.

Pyongyang’s population of three million frequently come into contact with foreigners in the service sector – hotels, shops, bars – and workplaces where foreigners also work. Outside Pyongyang, the port towns of Nampo, Chongjin and Rajin also host foreigners; so too has the southern tourist development zone of Kumgangsan, and the South Korea-sponsored free-trade zone of Kaesong.

It’s true that short-term visitors to the country are carefully “minded” by accompanying North Korean officials, but long-term residents have more freedom. They are permitted to obtain North Korean driving licenses, learn Korean and freely operate without permanent watch.

Addressing North Korean clichés and half-truths: The Omniscient Criminal State

Excerpts from “North Korea: Markets and Military Rule” by Hazel Smith, as printed in The Guardian:

North Korea is, allegedly, a criminal state for three reasons: firstly, because state representatives are alleged to systematically abuse diplomatic immunity to smuggle counterfeit currency, narcotics, counterfeit cigarettes, endangered species and other illicit goods across borders. Secondly, because state-owned companies manufacture counterfeit currency, cigarettes and narcotics for sale abroad.

Thirdly, this activity is apparently directed by the North Korean leadership for personal gain. These criminal acts, it is argued, should be understood as state-sponsored, and are managed by a shadowy party organization called Bureau 39. But the caricature of an omniscient state guided by a leader sitting in central Pyongyang planning day-to-day how to maneuver 24 million people to commit criminal activity for his sole benefit misses the point.

The US government and international media reports derive from a small number of US government publications that are in turn largely founded on allegations from defectors and unnamed US officials.

Such reports acknowledge the tentative nature of the evidence: “Data should be considered a ‘far cry’ from anything that might be remotely considered as evidence in a US court of law”, an official US report said on the DPRK’s alleged drug trafficking.

Perhaps surprisingly, given the vehemence in the west’s belief of North Korean state criminality, there have been only a few international court cases where North Korean nationals have been charged and found guilty of producing counterfeit goods or smuggling.

The cartoon picture of the country obscures important changes in North Korean society, and handicaps our understanding of their political consequences.

Creating the perfect North Korean leader

Recent rumors about North Korea make us muse on just how weird North Korea is.

When it comes to lionized feats of North Korean leaders, there are two kinds of tales. The first are the “real’ legends, i.e. those actually propagated by North Korea, usually quite incredible, but not unbelievable. We’re told that the dynasty’s founder, Kim Il Sung, wrote patriotic slogans in beautiful calligraphy at age three and founded a proto-political party at age 13. Kim Jong Il was born on the sacred slopes of Mt Baekdu and as a middle school student repaired trucks while also organizing ideological study sessions. These kinds of stories are primarily meant for the domestic audience to convince them of the merits of their uniquely qualified leaders. Education on Kim Jong Un’s exploits will certainly be growing.

The second kind of myth exists almost exclusively in international media and often consist of truly unbelievable tales. The best example is, of course, the “Kim Jong Il got 18 holes-in-one the first time he golfed” story. Or Kim Jong Il scoring a perfect 300 the first time he bowled is another such tale. North Koreans have never, ever heard of these stories, unless they’ve been told them by a foreigner. They exist purely in a fantasy version of North Korea we too often indulge in. We let this version take hold for several reasons.

First, the bar is exceptionally low for journalism on North Korea. It is a difficult place to cover, no doubt, but to all too many journalists this seems to mean a free pass. There is no punishment for getting it wrong.

Second, South Korean journalism on North Korea is problematic — we should remember the two countries are locked in a 70-year propaganda war. South Korean journalistic culture allows for stories to be built around a single anonymous source. Meanwhile, many Western news outlets are quite happy to quote South Korean articles as authoritative.

Finally, they do have customs and rhetoric that are often extreme or do not conform to our standards. Kids in the DPRK do sing songs for “their father Kim Jong Un,” for example.

More broadly, there are over 24 million people in the DPRK. There are trusting people, cynical people, simple people and smart people. In what way they interact with the information environment they face very much depends on who they are as individuals. Generally, however, it is fair to say most people accept the stories of their leaders’ heroics as truth. But we should remember that the stories they hear are usually not as weird as the ones we hear.

[Read full Reuters blog post]

North Korean merchant shipping fleets mask North Korean weapons trade

North Korea has developed sophisticated ways to circumvent United Nations sanctions, including the suspected use of its embassies to facilitate an illegal trade in weapons, according to an United Nations report.

North Korea has also gone to great lengths to mask the origin of its merchant shipping fleet by reflagging and renaming ships, the report said, particularly after the introduction of tightened U.N. sanctions in early 2013 that followed the country’s third nuclear test. Most of the registered owners of the ships are small companies that rarely own more than five vessels, meaning Pyongyang is able to keep its fleet running if a ship or shipping company is seized or has its assets frozen.

The report said North Korea was also making use of more complicated financial countermeasures and techniques “pioneered by drug-trafficking organizations” that made tracking the isolated state’s purchase of prohibited goods more difficult.

Under the myriad U.N. sanctions, North Korea is banned from shipping and receiving cargo related to its nuclear and missile programs. The importation of some luxury goods is also banned, along with the illicit transfer of bulk cash.

[Reuters]

Mexico holds North Korean freighter over UN weapons sanctions

A 430-foot-long North Korean freighter Mu Du Bong was riding high in the water when the vessel slammed into a coral reef in Mexican waters in the Gulf of Mexico last July 14, thudding to a halt. Salvage vessels pulled the freighter off the reef 12 days later and brought it to port in Tuxpan, where it’s been idle for nine months, moored to a wharf on the Tuxpan River. North Korea has declined to repatriate the 33 crew members.

Arms-trafficking practices led the U.N. Security Council to impose sanctions on a North Korean concern, Ocean Maritime Management Co. Ltd., that counts the Mu Du Bong among its 14 oceangoing freighters. Another of the company’s vessels was intercepted in Panama nearly two years ago, its cargo holds piled high with sacks of Cuban sugar. When inspectors removed the sacks, they discovered two MiG-21 fighter jets, 15 jet engines and radar control systems for missile launches. Cuba claimed the war materiel was being sent to North Korea to be refurbished and was to be returned.

“Thus far, 13 of the 14 vessels controlled by OMM have been renamed, their ownership transferred to other single ship-owner companies . . . and vessel management transferred to two main companies,” said a preliminary U.N. report dated Feb. 23.

William J. Newcomb, a visiting scholar at the School of Advanced International Studies at Johns Hopkins University who’s a former member of the U.N. Security Council’s panel of experts on North Korea sanctions, noted that the Mu Du Bong’s travels were similar to the activities of the Chong Chon Gang before it was caught carrying Cuban weapons. “It had all the earmarks of an arms transfer,” he said.

[McClatchy]