Side jobs, black markets flourish in North Korea

December 26, 2011

By YOSHIHIRO MAKINO / Correspondent

SEOUL--North Korean citizens, unable to count on a stable income or rationing, are moonlighting as security guards or coal haulers to make ends meet, eroding their allegiance to state authorities.

A South Korean research institute estimates that unauthorized economic activities, such as side businesses, account for 40-70 percent of citizens' daily lives.

Experts say as much as 75 percent of the North Korean population does not depend on the state-owned economy at all.

The prevailing view is that the regime will lose more of its ruling power unless Kim Jong Un, who succeeded Kim Jong Il as North Korea's new leader after his death on Dec. 17, reforms and opens up the economy.

One last parting gift that Kim Jong Il apparently left is fresh fish, which North Korea began distributing to Pyongyang residents on Dec. 23.

According to the Korean Central News Agency, Kim Jong Il before his death instructed the rations be made available, and Kim Jong Un has arranged for special transportation efforts.

"We must deliver Dear Leader's affection to the people without delay," Kim Jong Un was quoted as saying.

North Korea reinstated rationing for "all rice" for Pyongyang residents at the end of August. But the amount for ordinary workers was cut from 700 grams a day to 350-400 grams, according to North Korean defectors and other sources.

Rationing in provincial cities has been suspended since the 1990s.

In Pyongyang, the government distributes vouchers, which allow residents to buy rice at 30 won per kilogram, three to four times a year, according to the sources. One yen buys about 45 won at a black-market rate.

Vouchers for clothing or household appliances are hard to come by even in the capital.

A variety of goods, from food to industrial products, are available at state-sanctioned general markets. But prices are more than 100 times higher than government-designated levels because they are determined by market principles. Rice, for example, is sold at about 3,000 won per kilogram.

Citizens roam through black markets, set up on back streets and behind apartments, looking for cheaper fare. Mock meat made of bean curd has been a popular staple since the 1990s.

People need 30,000-40,000 won a month to make a living, even after vouchers are taken into account, the sources said. But Pyongyang workers earn only 2,500-7,000 won a month.

People who have some money to spare engage in trading or run restaurants. Others work nights as security guards or carry coal briquettes.

At a shoe factory outside Pyongyang, only about 100 of the 750 employees report to the factory. Others buy materials, make shoes on their own and sell them in markets.

The workers, after paying 10,000-30,000 won in sales to the factory a month, can keep what is left as their own take, according to sources.

North Koreans at the dinner table used to talk about what Kim Il Sung, who founded the country, did and said. Today, they talk about how to make money instead.

The citizens' desire to earn their own way may have improved their standards of living. But it has not contributed to the nation's economic strength because the regime denies the existence of a market economy and cannot tax side businesses.

By YOSHIHIRO MAKINO / Correspondent
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Pyongyang citizens receive rations of fresh fish on Dec. 23 in a photograph distributed by the Korean Central News Agency. (Korea News Service)

Pyongyang citizens receive rations of fresh fish on Dec. 23 in a photograph distributed by the Korean Central News Agency. (Korea News Service)

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  • Pyongyang citizens receive rations of fresh fish on Dec. 23 in a photograph distributed by the Korean Central News Agency. (Korea News Service)

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