By: Aramie Louisville Vas
And who could possibly afford that? As Kim Jong Un’s government sort of continues attempts at economic reform, an increasingly consumer society demands its goods. The result? Black market items sold in stores where the goods are listed in both won and United States dollars, as witnessed in the capital of Pyongyang. The black market exchange rate in 80 times cheaper than the official rate, rendering that $400 light bulb a mere $5, and the $100,000 television around $1,300.
The people are making their own comeback from the mid-1990s famine, brought on by agricultural mismanagement and the collapse of the Soviet Union. When the state rationing system fell apart, the people of North Korea made their own system which ranged from bartering to selling what they could to survive.
The won was re-denominated in 2009 and it devastated most of the private wealth earned on the ‘free’ market. Demand for hard currency surged, and underground merchants began insisting on conducting transactions using foreign currency. Two years of hyperinflation followed.
A growing middle class in North Korea has now made money in the unofficial marketplace, and they are spending that money now. As a result of all the economic sanctions imposed for violating nuclear and missile restrictions, North Korea now has a growing range of companies producing domestic goods. It sounds kind of great, or at least, better than the past.
But isn’t the government of Kim Jong Un going to crack down on all this? Nope! Under Kim Jong Un, not a single policy has been passed which would mess with a now widespread illicit economy. They seem to have accepted the black market as the unofficial standard.
So what are the hot items in North Korea these days? Cell phones, there’s a big one. Most people have them now, and energy-saving products such as domestically produced LED bulbs and solar panel chargers are much sought after, as are baby items. We in Western countries and much of Europe may be used to huge stores dedicated to little, new humans but in North Korea baby stores are a big commodity. Cash cards are also a new thing, topped up with U.S. currency, as are battery-powered Chinese-made bikes.
Advertising is also taking off, and we all know what an unstoppable force advertising is in a market-based economy. And predictions do hold that, eventually, the North Korean government will adopt a market-based economy. Some would say they’ve already done so, it’s just in its infant stage.