Questions from NK Monitor

22 03 2008

NK_province_truck

NK Monitor has asked many interesting questions. I hope my answers are not completely wrong.

>Some (anecdotal) evidence seems to suggest that the public distribution system, especially in the border regions, is breaking down…

– Apparently, the PDS has been revitalized all across the country after 2003. It can break down again only if the government is collapsing or there is nothing to distribute. So far, these do not seem to be the case.

> …and as this happens, the jangmadang are increasingly filling this gap.

– This is why the “farmers’ markets” (jangmadang) were officially permitted in 2002-2003 virtually in every district and village. Moreover, after the 2005 crackdown on private selling activity, people still trade and speculate but discreetly, at night. The authorities know about that but seldom react.

> Imaginably, some of this food, especially up in the border areas, is imported from China. Assuming a large percentage of the food in that region is imported from China, wouldn’t that drive up prices in the region ?

– Food (and other goods) come from China as the result of barter (non-cash) deals with North Koreans. The food prices are growing, so the prices on the commodities which North Korea is exporting.

>(Also, due to predicted food shortages locally-produced food prices will no doubt rise as well).

– Yes, in jangmadangs the food prices rise and fall seasonally. But the prices on food sold through the PDS is likely to stay at the same level. PDS remains for the central government an important stabilizing factor which buys it time to look for survival paths.

>And as those traders start accumulating power and money and coalesce together, is it possible that this could contribute to the formation of “fiefdoms” along the border area that are autonomous and able to resist the central government?

– This process began in the early 2000s, when economic freedoms were hardly controlled from the centre. After 2005, when Pyongyang gained momentum, many of the freedoms associated with “7.1 economic measures” were curtailed. Recently, the government began to crack down on collective property on the means of production (trucks, buses, machinery) to undermine their ability to earn cash and barter.

And, the most important, you cannot “resist the central government” in societies like North Korea unless you feel suicidal…

LP


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3 responses

24 03 2008
nkmonitor

Dr. Petrov,

What’s your take on the recent reports of “massive food shortages” affecting Pyongyang? (See: http://uk.news.yahoo.com/skynews/20080320/twl-huge-food-shortage-in-north-korea-3fd0ae9.html) Is this a sign of the end of the Kim Jong Il regime or are such prognostications overblown?

I would assume that those who matter most (top generals, policy makers, etc) are still getting their rations.

24 03 2008
leonidpetrov

Food shortage is not a news for North Korea. They have been struggling since the Korean War (1950-1953). But I doubt that they will have to face another disaster similar to what happened in 1995-1998.

People have learned to survive in the half-market-half-centrally planed society. The PDS is restored and helps people to survive. The market fills the gaps but undermines the ideology.

The government is encouraging the people to gain profit but does not allow them to appropriate it. So, the process of decay has started but is going VERY slowly.

LP

31 03 2008
“For Kim Jong Il, this will be his most difficult year,” « North Korea Monitor

[…] able to cope with desperate economic conditions than in times past (as Dr. Petrov pointed out here), I can’t help but wonder if North Korea’s resurgence of hostility is in someway related to the […]

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