North Korean markets thrive

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Private markets began taking hold in North Korea following a devastating famine in the 1990s, when the state distribution system broke down.

Since 2004, the size of spaces used as markets has significantly expanded, as have bus depots supporting the delivery network, says Curtis Melvin, a researcher who studies publicly available satellite imagery of the country at the Johns Hopkins School for Advanced International Studies in Washington.

“This didn’t start under Kim Jong Un, but there’s been a lot of growth under him,” said Melvin, referring to North Korea’s young leader, who took power following the death in 2011 of his father, Kim Jong Il.

Using servi-cha, a rice vendor who needs to replenish supplies when none are locally available can phone a wholesaler in another city and place an order. The wholesaler delivers rice to the local depot, where a bus ships it to the buyer’s town.

To pay for the rice, the buyer visits a small money transfer business, which takes the payment and calls a partner business in the seller’s town – one in 10 North Koreans has a cellphone – who confirms the deal and hands cash to the seller.

By reliably accepting cash in advance, servi-cha have helped foster the concept of trust in business in North Korea, said another defector who stays in touch with family in the North and asked to be anonymous for the safety of her relatives still living there.

“Logistics with buses are like vessels which keep pumping blood around the country and stop people from starving to death,” says a defector. “This is something that the planned economy can’t do.”

[Reuters]

This entry was posted in , by Grant Montgomery.

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