The decrease in the number of North Korean defectors
The number of North Korean defectors entering South Korea has been declined rapidly. It used to be approximately 3,000 defectors on average every year, but the number of defectors has decreased in half since 2012, the year of the appearance of the Kim Jong Un regime. Human Rights Watch (HRW) analyzes that this phenomenon is due to the reinforcement of the border control in its ‘2015 World Report’. The persons involved in helping the defectors to be sent to South Korea say that the cost of crossing the river near the border to China goes through the roof up to 7000 ~ 9000 dollar, which used to be 2000 ~ 3000 dollar in 2010. The strict crackdown on North Korean defectors by the Public Security Bureau in China is considered to be one of the reasons. So far, about 25,000 North Korean defectors have settled down in South Korea, and 9 people are confirmed to be back to North Korea via their appearances on the North Korean broadcasting. According to the Department of Unification, less than 1,200 defectors have arrived in South Korea this year. Many think that they are pretty sure why North Koreans are heading to South Korea constantly, and it is easy to say that it has always been impossible to live in North Korea given the circumstances such as the arduous hunger, the harsh dictatorship, and the extreme brainwashing doctrine. Yes, of course, it was a correct answer before. Are they still leaving their homeland because of the same reason? Is it possible that North Korea is the stagnant society which has never gone through any changes in the several decades? How can we understand the decline of defectors then? In the matter of fact, recent researches show that the better living condition can be one of the reasons of the lower number of defectors. Newly-arrived defectors, many pictures taken by foreign tourists on the Social Network Service, and even experts research indicate that something is changing there. Something very different, but the most of Norwegian media deny to face.
The economic growth in North Korea
Seoul University the institute for peace and unification studies (IPUS) has been conducting a survey, targeting newly-arrived North Korean defectors every year. The result of survey in 2015, targeting 146 defectors arrived in South last year was beyond the common stereotype on North Korea. It is a good example of how rapid North Korea is changing, compared to the year before. According to the research, the answer to “I ate three meals every day when living in North Korea” is 86.9%, which is 12.4% higher than last year’s survey. And more than half of respondents say that they ate meat twice a week, whereas half of respondents say that they ate meat twice a month last year. To the question about the food situation during the last one year before getting out of North Korea, only 1.4% says that there was frequent shortage on the food. The rate of “sometimes short” is 17.2%, “Enough, but not diverse” is 41.4%, and “both enough and diverse” is 40%. In summary, 81.4% of them had no difficulties in getting hold of food when they were about to move out of North.
Furthermore, people are crowded in the Gwangbok department store, which was the last field work place of late Kim Jong Il. It means that North Korea, knowns as the society, run through official rationing channels, begins to embrace the market economy on a small scale. In fact, the food production for 2013/14 is estimated to rise by 5 percent than last year, from 5.73 to 5.98 million tonnes, which is at the highest level in two decades, according to FAO/WFP Crop and Food Security Assessment released by World Food Programme (WFP) in 2013. It is 11.8% increase compared to 4.5 million tonnes in 2010. Needless to say, there are still many issues of concern when it comes to nutrition, public health, and hygiene. That is why North Korea needs the constant international aid. Many people accuse North Korea of pocketing economic aid only to develop the nuclear weapon, but the recent research shows the opposite way. And Damian Kean at Asia regional office of WFP says to Voice of America that they conducted around 1,800 times control activities on the food distribution in North Korea, and they did not find any problems, such as the maldistribution or pocketing done by officials. And according to the same survey of IPUS mentioned above, 67.1% of defectors are aware of the economic aid to North Korea.
The rise of the openness and the consumer society
North Korea insists that about 2 million people are using the mobile phone, using the telecom company called ‘Koryolink’, made as the joint-stock company with the Egyptian company ‘Orascom,’ Speaking of Orascom, it is said that Orascom is about to wash its hands of telecom business in North Korea because the success has not brought any profits. Orascom is required to get a permission to transfer money out of North Korea, which has not once granted by the North Korean government. What’s more, the profits have not even been calculated correctly due to not only the distorted government’s official currency but also the economic sanctions, prohibiting North Korean Won from trading off internationally. Despite of this plight of investors, the number of subscribers keeps increasing and the technologies develop apace. The third self-production smartphone ‘Pyongyang 2407’ is released in 2015. Given the fact that the price of smartphone in North Korea is known to be more and less around 400 dollar, it is noticeable that people with that purchase power rose in North Korea. Whereas North Koreans are still forbidden using the 3G internet, foreigners became allowed to use the 3G internet via ‘Koryolink’ in 2013. In addition, many foreign tourists confirm that they took pictures freely without any kinds of restrictions since then. These new changes are regarded as signs of confidence of the new leader Kim Jung Un, and it can be seen as a start point toward the broader openness. Going back to the survey by IPUS, 55.2% of defectors answer that they bought a house by paying for it when they lived in North. Only 20% lived in the house which the state distributed to them. And the relatively active behavior as consumers emerges, considering the fact that half of them experienced the return and change of products in the market.
The Jangmadang (Unofficial/Free Market) Generation
Now you might wonder where this experience of the market economy comes from. It is certain to answer. Jangmadang, literally to translate, ‘Jang(market) + Madang(yard),’ unofficial/free market in English. Jangmadang used to be translated into the black market before. However Jangmadang is now tacitly permitted by the officials at some level. So it would be inappropriate to call it the black market, but rather it is close to the unofficial/free market. Curtis Melvin, a researcher U.S.-Korea Institute at Johns Hopkins says that the number of Jangmadang is estimated to be 406 places, which is more than doubled in 2010, based on analysis on the satellite photos. The Jangmadang has a significant characteristic of the capitalistic market economy, and this feature leads North Koreans to adapt to the rule of supply and demand. In the survey of IPUS mentioned above again, 76.7% answer that they have sold something in the Jangmadang. The Jangmadang started to develop in the period of the Arduous March, in the middle of 1990 when the rationing system and the planned economy collapsed owing to the natural disasters and the international isolation. To put it simply, all of the rationing stopped and people had to learn how to survive ‘on their own.’ People, born in between in early 1980s and early 1990s, are called Jangmandang Saedae, unofficial/free market generation. Many of North Koreans run wholesale business, crossing the border to China or Russia. And around 20,000 North Korean workers, dispatched by the governmental authorities or having found employment privately, are confirmed to work in China now. The National Security Service in South Korea explains that this generation has lower loyalty to the state, compared to their parent generation, and they have a strong tendency of individualism because of peculiar identities, evolved from the experience of the market economy. Another example of the growing market economy is Donju (literally, ‘money masters’). Donju is the emerging rich group, making lots of fortune by leasing portions of state-run businesses. Since the personal property right is forbidden, the market economy is done by the way of renting state-own enterprises to the new rich class, Donju. It is considered that the North Korean government collects taxes approximately 10 ~ 15% of profits of renting out them. Yang Mun Su at Korean Development Institute explains that one of the biggest gold mines to Donju is the real estate market. Even though all of houses in North are supposed to be state-owned, the real estate market is active by exchanging the document of the residence permission. Yang says that both this marketization and trade with China are classified as the main driving forces of the economy boost in North Korea.
The rapid development in the Economic and Trade Zone in North Korea
The huge growth of the cooperation with China and Russia is another point. North Korea set the Rason (Rasin-Sonbong) area, located close to border lines both to China and Russia, as the free economic and trade zone in 1991, but failed to get investment. However, under Kim Jong Un’s regime, these areas meet a breakthrough in accordance with the need of neighboring countries. Both China and Russia are renting one of docks in the Rajin harbor in order to have a better access to the Pacific. On November 18 2015, North Korea declares a new law concerned about this Rajin area. Article 4 clearly indicates that the zone is “open for investment by corporate bodies, natural persons and economic organizations of different countries.” And Article 5 says that the state shall ensure investors to be provided with all good conditions for their economic activities. This new law has 50 detail plans on the Rajin area, so it seems that the success of this area will be the bigger-scale door toward openness. That is why we should look carefully on this Rajin area.
May 24 sanctions and an icebreaking news
In 2008, the Russian president Vladimir Putin and late Kim Jong Il agreed to develop in connecting trains Trans-Siberian Railway (TSR) and Trans-Korean Railroad (TKR). This joint development is called ‘Rajin-Hassan logistics partnership, or Rajin-Hassan Project.’ South Korea was supposed to be part of reconstructing the railroad together, but all process was stopped because of May 24 sanctions, introduced after the Cheonan ship sinking accident in 2010. It has been many debates on May 24 sanctions especially after the close economic cooperation among North Korea, China, and Russia since it seem that South Korea falls behind the big economic change in East Asia. Fortunately, the South Korean president Park Geun Hye and the Russian president Vladimir Putin declare Joint Statement that allows South Korea to join this project in 2013. Three times transportations of container shipping have done as a part of pilot project last year and South Korean companies are getting closer to sign a shipping investment contract. These commercial containers are the first shipping, freighted directly from North Korea ever since the May 24 sanctions in 2010.
I do appreciate this icebreaking news in inter-Korean relations. However, it seems still silly that South Korea has a memorandum of understanding (MOU) with Russia even if all the investments and the shipping profits occur in the Rajin harbor in North Korea. All the freight ships, used during the pilot projects, had to use a dock which is rented to either China or Russia because May 24 sanctions forbids all kinds of economic trades with North Korea. So in this way, the mineral water, shipped from the Rajin harbor to the Busan harbor, is not considered to be the ‘Made in North Korea.’ The ban of tourism to the Geumgang mountain damages 2000~3000 dollar a year to the North Korea side, but the total damage to economy in South Korea is 10 times bigger than that of North Korea. It is because the industry complex in Gaesung in North Korea and the tourism market around the border to North Korea literally collapse.
A big change in North Korea
Jong Uk Sik in the NGO ‘Peace Network’ consists that Kim Jong Un is trying to transform ‘Army first’ policies into ‘Economy first’ policies, and his reform looks so similar to that of Deng Xiaoping. And he anticipates carefully that Kim Jung Un will make an official announcement regarding Kim’s partial open reform strategies at the Party Congress in May this year. Kwon Yong Kyung, a professor at the Institute for Unification Education also explains that the economic strategy of Kim Jung Un looks similar to the economic reform in the beginning of 1980s in China. Kim asserts that the double strategy, separating the state-planned economy and the emerging market economy ended up in making bigger dilemma among people’s lives in North Korea. So Kim Jung Un is likely to experiment the mixed strategy, putting the state-planned economy and the market economy together, while keeping continuing Kim Jong il’s Sungun (Army First) politics. Jangmadang and Donju are one of the evidences of Kims’ new mixed economy plan.
So, what is next then? How can we deal with this big change? There have been a lot of peaceful agreements between South Korea and North Korea so far. The problem is that none of those agreements have a practical effect on real politics. How long will the South Korean government let valuable agreements remain a scrap of paper? See the changes. North Korea is opening the door.
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About Jinha Sim
Jinha Sim is born in South Korea. She is current a Master student at the East Asian Culture and History program at the Department of Culture Studies and Oriental Languages, at the University of Oslo.