A glimmer of financial hope in North Korea?

A North Korean defector who now lives in South Korea has this to say about life in Hyesan, a North Korean city near the border with China: “Women are wearing clothes from Japan or South Korea that show off their figure if they have some money, and cosmetics from South Korea, too.” Since her 2012 defection, Ms Park remains in touch with family in Hyesan thanks to a mobile phone illicitly brought from China. “Seven out of 10 homes have color TV, and people can afford to make meat broth once a month . . . The quality of life has improved a lot.”

Though Kim Jong-Un has stressed a desire to strengthen the economy and “improve the people’s standard of living”, Hyesan’s growing middle class is more a reflection of the North Korean government’s surrender of control over much of the real economy than a result of improved policies. It is also a window into North Korea’s struggle to foster economic development while keeping a totalitarian political system alive.

After the starvation of up to 1m people in the famine demonstrated the state’s inability to feed its people, it was forced to turn a blind eye to the informal markets that sprang up. For residents of cities such as Hyesan, near the border with China, the opportunity to engage in illicit trade with Chinese merchants has been especially lucrative.

The capital has always offered higher living standards than the rest of North Korea, serving as a home for about 3m of those considered most dependable and loyal to the regime. Visitors to Pyongyang over the past two years also speak of growing prosperity. There are more cars on the formerly traffic-free streets – including BMWs, despite a UN ban on luxury goods imports. Children in the city’s parks use skates, department stores are increasingly well-stocked, and a growing number of once drab shops bear hoardings with eye-catching logos.

Chinese trade with North Korea hit a record $6.6bn last year, according to the Seoul-based Korea International Trade Association – the vast majority of Pyongyang’s trade and up ninefold since 2001. Says Andray Abrahamian, executive director of Choson Exchange, which provides business training to young North Koreans. “Increasingly, over the last decade, people see business as the way to get ahead rather than the traditional way, which would be getting ahead in the party or the military.”

The majority of North Koreans though still endure grinding poverty that contrasts sharply with the lifestyles of the smugglers of Hyesan, let alone the Pyongyang elite. A study last October by the World Food Programme estimated only 16 per cent of households had “acceptable food consumption”. In the northern province of Ryanggang, 40 per cent of children under five were stunted.

[Simon Mundy writing in Financial Times]

This entry was posted in China, Kim Jong Un, North Korean refugee, Uncategorized by Grant Montgomery.