SEOUL - NORTH Korea has clamped down on fast-growing free markets for fear they could undermine the communist state's power over its people, analysts and observers say.

The regime in late November banned general markets which sell consumer goods from early next year. It severely restricted the operations of food stalls, according to the Daily NK web newspaper and other analysts.

The food markets known as 'jangmadang', some of which currently open daily, will be allowed to operate just three times a month and to sell only vegetables and certain other farm products.

Staples such as rice and corn will be sold only at state distribution centres.

The Seoul-based Institute for Far Eastern Studies predicted the curbs would prove unenforceable and said in a commentary they could spark rioting.

In March thousands of women started a rare street protest in the north-eastern city of Chongjin against a clampdown on street vendors and hawkers, mostly women chasing a little extra money to buy food.

The markets sprang up after the famine years of the mid-to-late 1990s, when the official food distribution system broke down and people were forced to trade and to travel around the impoverished nation to survive.

In 2002 the country introduced limited reforms. Controls on prices and wages were loosened, workers were granted material incentives and the role of the private markets was accepted.

But in October 2005, apparently fearful of relaxing its grip, the regime banned private grain sales and announced a return to centralised food rationing in some areas.

Analysts say the private markets have grown because the centralised command economy cannot do its job.

'Due to food shortages and an inoperative distribution system, the jangmadang have grown fast. They are everywhere, playing a crucial role in allocating resources,' said Mr Lee Seung Yong of Good Friends, a South Korean aid group which has many contacts in the North.

The rulers see the jangmadang as a threat to their socialist system because it has generated capitalist trends, he said, adding that even party officials engage in commercial activities to survive.

'They also regard the jangmadang as a hotbed of corruption and crime,' he told AFP.

North Korea studies professor Kim Yong Hyun from Dongguk University, said the state is trying to reassert control over distribution because sharp price rises have put basic commodities beyond the reach of ordinary people.

The new directive, however, will be ineffective or face disobedience because workers cannot in any case live on their wages and must find extra income or food elsewhere, he said.

'It's too late for the troubled country to go back to its earlier system,' Prof Kim said.

North Korea may have to ease the clampdown because it cannot solve food shortages and state stores do not have enough products to sell, he said.

Chronic food shortages worsened this year, the Food and Agriculture Organisation and the World Food Programme said in a joint report last week.

About 40 per cent of the population - an estimated 8.7 million people - will urgently need food aid in coming months, they said.

Associate Professor Andrei Lankov of Kookmin University says the North's rulers will probably never initiate economic reforms.

They fear 'that Chinese-style reforms might trigger regime collapse if common North Koreans learn too much about South Korean prosperity and freedom', he told the Korea Times in a recent commentary.

On Dec 1, the North ordered hundreds of South Korean staff to quit the Kaesong joint industrial complex, developed by Seoul as an experimental market-based system.

Some 36,000 North Koreans work in South Korean light industrial plants.

Mr Cho Min of Seoul's Korea Institute for National Unification, said the Kaesong estate workers enjoy a much better lifestyle than other residents.

'The well-fed and happy-looking workers commute every day to and from the South Korean plants, serving as quiet but powerful evangelists of capitalism in the city,' he told AFP. -- AFP