As private commerce grows, Kim's grip on N. Korea slackens

Passengers ride the bus in newly constructed area in central Pyongyang, North Korea April 12, 2017.
Passengers ride the bus in newly constructed area in central Pyongyang, North Korea April 12, 2017. PHOTO: REUTERS

SEOUL • Despite decades of sanctions and international isolation, the economy in North Korea is showing surprising signs of life.

Scores of marketplaces have opened in cities across the country since Mr Kim Jong Un took power five years ago. A growing class of merchants and entrepreneurs is thriving under the protection of ruling party officials. Pyongyang, the capital, has seen a construction boom, and there are now enough cars on its once-empty streets for some residents to make a living washing them.

Reliable economic data is scarce. But defectors, visitors and economists who study the country say nascent market forces are beginning to reshape it - a development that complicates efforts to curb Mr Kim's nuclear ambitions.

Even as President Donald Trump bets on tougher sanctions, especially by China, to stop the North from developing nuclear-tipped missiles capable of striking the United States, the country's improving economic health has made it easier for it to withstand such pressure and to acquire funds for its nuclear programme.

While North Korea remains deeply impoverished, estimates of annual growth under Mr Kim's rule range from 1 per cent to 5 per cent, comparable to some fast- growing economies unencumbered by sanctions.

But a limited embrace of market forces in what is supposed to be a classless society also is a gamble for Mr Kim, who in 2013 made economic growth a top policy goal on par with the development of a nuclear arsenal.

Mr Kim, 33, has promised his long-suffering people that they will never have to "tighten their belts" again. But as he allows private enterprise to expand, he undermines the government's central argument of socialist superiority over South Korea's capitalist system.

There are signs that market forces are weakening the government's grip on society. Information is seeping in along with foreign goods, eroding the cult of personality surrounding Mr Kim and his family. And as people support themselves and get what they need outside the state economy, they are less beholden to the authorities.

"Our attitude towards the government was this: If you can't feed us, leave us alone so we can make a living through the market," said Ms Kim Jin Hee, who fled North Korea in 2014.

After the government tried to clamp down on markets in 2009, she recalled: "I lost what little loyalty I had for the regime."

Ms Kim's loyalty was first tested in the 1990s, when a famine - caused by floods, drought and the loss of Soviet aid - gripped North Korea. The government stopped providing food rations, and as many as two million people died.

Ms Kim did what many others did to survive. She stopped showing up for her state job at a factory in the mining town of Musan, and spent her days at a makeshift market selling anything she could get her hands on. Similar markets appeared across the country.

After the food shortage eased, the Musan market continued to grow. By the time she fled, Ms Kim said, more than 1,000 stalls were squeezed into it alongside her own.

Unofficial market activity has flourished, too: people making and selling shoes, clothing, sweets and bread; traditional agricultural markets; smugglers who peddle black- market goods like Hollywood movies, South Korean television dramas and smartphones that can be used near the Chinese border.

Mr Jung Gwang Il, who leads a defectors' group in Seoul called No Chain, said that with more North Koreans getting what they needed from markets rather than the state, their view of Mr Kim was changing.

"North Koreans always called Kim Jong Un's grandfather and father 'the Great Leader' or 'the General'," Mr Jung said. "Now, when they talk among themselves, many just call Jong Un 'the Kid'. They fear him but have no respect for him."

"They say, 'What has he done for us?'," Mr Jung said.

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A version of this article appeared in the print edition of The Straits Times on May 02, 2017, with the headline 'As private commerce grows, Kim's grip on N. Korea slackens'. Print Edition | Subscribe