North Korea has long relied on socialized agriculture, placing several families on a common piece of land to farm for the state. The result has been malnutrition and even starvation.
Reforms reportedly have been adopted to reduce the number of families per plot, and establish a production quota above which farmers can keep the excess. The objective however may not be greater freedom but reordered regulation.
There are indications that the regime is manipulating prices in an attempt to eliminate private markets and seizing privately farmed plots of land for collective use.
Open Radio for North Korea reported that “North Korean citizens, who experienced the similar situation in 2002, are preparing for Kim Jong-un’s New Economic Management System. To prepare for the prices skyrocketing, they are hoarding Chinese money, and prices and the exchange rate keep rising.”
Deep in the North Korean countryside, in remote villages that outsiders seldom reach, farmers are now said to be given nearly one-third of their harvests to sell at market prices. Collective farms are reportedly being reorganized into something closer to family farms. And State propagandists are expounding the glories of change under the country’s new young leader.
In the rigidly planned economy of this Stalinist state, could this be the first flicker of reform? A string of long-doubtful observers have become increasingly convinced that economic change is afoot, akin to China’s first flirtations with market reforms 30 years ago. But, they also warn, exactly what is happening remains a mystery.
“My gut sense is that something is changing,” said Marcus Noland of the Washington, DC-based Peterson Institute for International Economics and a leading scholar on the North Korean economy.
Kim Jong Un “is trying to do something new. … Whether that succeeds or not is a completely different issue,” he added. Like many other analysts, Noland remains pessimistic. The economic reforms appear to be very limited, he noted, and could quickly be abandoned if Kim changes his mind or faces opposition from his core supporters.
North Korea has flirted with radical economic shifts before. The 17-year rule of Kim Jong Il — whose December death paved the way for his son, Kim Jong Un, to take power — included market experiments in 2002, and a devastating currency devaluation in 2009 that stripped millions of people of their savings. Nearly all the changes were rolled back amid internal disputes, and fears among the ruling elite that they could lead to demands for change that could spiral beyond the state’s control.