The rise of the black market in North Korea

Travis Jeppesen, Shopping in Pyongyang, and Other Adventures in North Korean Capitalism, NYTimes Magazine, 14 Feb 2019.

“Jangmadang! Jangmadang!” I echoed playfully. My minders ceased their laughter and looked down at the ground. They had forgotten for a moment that I was a language student; jangmadang was one word I was not supposed to know.

Usually translated as “market grounds,” jangmadang is the word for the unofficial markets that emerged during the Arduous March, which is the regime’s official name for the famine that blighted the country throughout the middle and late 1990s. These were illegal markets, to begin with, that sprang up as a result of the collapse of the public food-distribution system that all North Koreans had previously relied on for their monthly rations. During the later years of Kim Jong-il’s reign, the government began to grudgingly accept their existence and took steps toward regulating them: charging rent for stalls, controlling prices and monitoring what goods were for sale. Under Kim Jong-un, the restrictions against this form of private enterprise have been all but lifted, and jangmadang has transcended the cramped market stalls of its birth to refer to the vast array of legal, illegal and semi-legal markets that exist for all sorts of goods in North Korea. Among recent defectors and expat residents, it is said that now, as long as you have money, you can buy anything you want in North Korea. But since the government still hasn’t figured out a way of publicly reconciling with this nascent form of capitalism, it was considered taboo to discuss the jangmadang with foreigners.

Which is a shame, because the rise of the jangmadang is arguably the most significant milestone in North Korea’s recent history. It lies at the root of all the country’s economic development over the past few years. They might not be permitted to speak about it with outsiders, but North Koreans are no longer shy about flaunting their consumption habits, as anyone who has witnessed the displays on the streets of Pyongyang in recent years can attest. Montblanc watches, Ray-Ban sunglasses and Burberry couture hardly fit the stereotype of a half-starved populace completely cut off from the outside world. And while extreme poverty continues to afflict large swaths of the population, North Korean society no longer conforms to a simplistic picture of haves and have-nots, but is home to an increasingly diverse and complex array of socioeconomic classes. While the presence of a rising upper middle class is most apparent in Pyongyang, a nouveau riche strata has been observed in other parts of the country, such as the port city of Chongjin and in many places along the border with China, where licit and illicit trade continues to flourish. [...]

Today there are more than 400 sanctioned markets in the country, representing about 600,000 vendors. After the currency reform wiped out the wealth and savings of a number of merchants, the preferred currencies in business became the United States dollar and the Chinese renminbi. According to one survey, some 90 percent of all household expenditures are said to take place in these markets; they are so pervasive that people speak of a Jangmadang Generation that grew up knowing nothing else. Under Kim Jong-un, market activities have not only been tolerated; they have slowly crept into the official sector, as I witnessed firsthand in my visits to the country.