A Glimpse at North Korea

File:Korean peninsula at night 1

Every once in a while a western news organization manages to pull something together that sheds some real light on conditions in North Korea, and this week the organization is The New York Times and the author is Shannon LaFraniere. Working from near the border in Yanjian, China she does interviews “with eight North Koreans who recently left their country — a prison escapee, illegal traders, people in temporary exile to find work in China, the traveling wife of an official in the ruling Workers’ Party.”

It’s the kind of story that’s really worth reading in narrative form, so you should click over. But to look at it analytically, the shape of the story seems to be that after the epic catastrophes of the 1990s the state began to allow (or at least turn a blind eye to) some private market activity in the shadows of the state factories and state agricultural enterprises. Indeed, one of the more lucrative revenue sources for state firms was bribes from their own employees paid in exchange for permission to not show up for work, thus letting the briber have extra time for private sector economic activity. This helped stabilize the situation, and also led to some people accumulating non-trivial (by DPRK standards) savings. Then the regime implemented a currency swap that basically wiped out everyone’s savings, and sent the economy reeling again, a situation that only worsens with North Korea’s deepening international isolation.