“Just like South Koreans have fond memories for Park Chung-hee, North Koreans have fond memories of Kim Il Sung because during his reign, North Koreans lived better than South Koreans,” he explained.
But Kim Jong Un didn’t stop at appearances. Kim Il Sung had been a huge personality, and he had parlayed that into a charismatic regime that revolved around him alone. Kim Jong Il did not have this kind of demeanor. He was notoriously reclusive and standoffish and quite obviously disliked human contact.
Kim Jong Un seemed to be very much his grandfather’s grandson, someone who seemed to enjoy North Korea’s version of retail politics, of getting out and meeting his constituents. He didn’t need their votes—the leader of North Korea is always elected to the Supreme People’s Assembly, with 100 percent turnout and 100 percent in favor—but he did want enthusiasm, and so photographs of him being adored and being adoring were shared to perpetuate the myth.
In newspapers and on television screens, Kim Jong Un made sure to show himself as a man of the people. Everywhere he went—schools, orphanages, hospitals—he was tactile, smiling broadly and hugging everyone, from children to the elderly. Giving on-the-spot guidance at a farm, he petted a baby goat on the head.
The state media exploded with reports of people around the country supposedly randomly interviewed about their thoughts about their new leader. Everywhere from foodstuff factories to medicine manufacturing plants, North Koreans were quoted pledging their allegiance to the new leader, described as the “eternally immovable mental mainstay of the Korean people.”
One woman couldn’t contain her admiration: “I’m convinced he is the master of our destiny,” she said on state television. “As long as he is with us, we will not fear anything.”
The state media was glowing in its appraisal of Kim’s debut, and many people were initially encouraged. Families around the country were given unfathomably decadent rations—like fish and meat, a rarity—to mark the change in leadership. They were gifts from the Great Successor to the people. Optimism grew.
Min-ah was only a couple of years younger than the new leader, and her life was relatively good back then in 2012. She was relatively well-off by provincial North Korean standards. She lived in Hoeryong, a bustling trading post on the North Korean border with China, and her husband was a truck driver, a good job because it allowed him to run a lucrative smuggling business on the side. They had a house with a small yard and, soon, a young baby. Once their daughter started kindergarten, they had enough money to bribe the teachers to treat her well. They were part of the new North Korean middle class.
Still, she hoped that the ascent of Kim Jong Un, a millennial like her, would herald a new era for North Korea—an era of better relations with China, which tolerated but didn’t exactly embrace North Korea, and with the outside world. An era of economic prosperity, where North Koreans might begin to enjoy some of the riches and freedoms they saw in the South Korean dramas they secretly watched late at night.
But nothing improved. In fact, in some ways, life got worse. The border was fortified, making it more difficult for people to smuggle goods across the river. As a result, prices went up. The cost of laundry powder doubled and then tripled.
Disappointment began to set in. Min-ah’s husband and closest friends began joking about their new demigod. If Kim Jong Un can be leader, then I can be the leader too, they laughed. In the police state of North Korea, such talk was seditious, and if someone betrayed their words to the authorities, the consequences would be severe: almost certain detention in a political prison camp.
“Everybody knew that Kim Jong Il and Kim Jong Un were both liars. We knew that everything we heard on the news was lies, but it’s impossible to say anything because you’re under such tight surveillance,” Min-ah told me a few years after she and her husband and their two young daughters escaped to South Korea. “If someone is drunk and says Kim Jong Un is a son of a bitch, you’ll never see them again.”
Kim Jong Un had successfully taken over, but he had not yet proven that he knew how to make a success of the decrepit kleptocracy that was his inheritance.
CHAPTER 6
NO MORE BELT TIGHTENING
“We must grow the valuable seeds, which the great Comrade Kim Jong Il sowed, to build an economically powerful state and improve the people’s livelihood, and lead them to bloom as a glorious reality.”
—Kim Jong Un, April 15, 2012
KIM JONG IL WAS FIFTY-TWO YEARS OLD WHEN HE TOOK OVER the running of North Korea, and the country was very vulnerable. The Soviet Union had collapsed, and famine was about to explode. North Korea’s economy, already in a state of extreme disrepair, was about to get even worse.
The second-generation leader couldn’t risk adding any more uncertainty into this volatile equation. He just had to hold on and hope that the propaganda and the all-encompassing surveillance would see him through. Against the odds, Kim held on and kept the family business intact for seventeen years. His principal accomplishment was to have endured that long.
Kim Jong Un did not have the option of just holding on. He was only twenty-seven when he inherited this state. He could theoretically rule for decades. So, to prove his right to rule, he needed to do much more than his father. He actually needed to show that life was getting better in North Korea if he wanted people to continue supporting his regime and the grossly unfair society it had created. He needed to give people a sense of a better life.
But to achieve tangible economic growth, he didn’t embark on a grand or coherent plan such as the Chinese-style “reform and opening” or Soviet-style perestroika. Instead, he loosened the very restrictive rules a little. He simply stopped stifling enterprise.
Small acts of private enterprise were tolerated, if not endorsed. There would be no more clamping down on people who were trying to make ends meet by selling rice cakes or cutting hair or selling DVD players brought in from China, which handled almost all—about 90 percent—of North Korea’s trade. Farmers could keep a little of their harvest to sell privately. Big changes to the monetary system were abandoned in favor of some gentle market forces that might provide enough growth to satisfy the people.
North Koreans “will never have to tighten their belts again,” the Great Successor declared when he delivered his first public speech, marking the occasion of his grandfather’s one hundredth birthday. Kim Jong Un told the bedraggled populace that they would be able to “enjoy the wealth and prosperity of socialism as much as they like.”
It was a bold claim and a risky promise that challenged North Korea’s miserable economic record.
While other countries in Asia had boomed during the ’80s and ’90s, North Korea’s economy remained stuck somewhere between the Victorian era and the worst days of Stalin.
China joined the World Trade Organization. Communist Vietnam pressed ahead with its “doi moi” reforms that allowed more and more private enterprise. And South Korea was catapulting itself into the leagues of the world’s richest countries.
Meanwhile, in North Korea, the fields were plowed by oxen. Trucks burned wood, not gasoline. Factories ground to a halt because of the lack of electricity and raw goods. In 2005, North Korea’s GDP per capita was about $550—36 times smaller than the South’s. North Korea was wedged in the United Nations’ economic tables between Mali and Uzbekistan, while South Korea was up with Portugal and Bahrain.
North Korea’s economic handicaps date back to division of the Korean Peninsula in 1945, which created a fundamental economic imbalance between North and South. The mountainous North is rich in mineral resources like coal and had been developed during the Japanese colonial period as the industrial heartland. The southern half had been the “rice bowl” that had provided the food for the peninsula and for parts of Japan.
With the division, South Korea wanted for industry and North Korea for sustenance. While the South began an impressively fast industrialization process, fueled by government support for companies like Samsung and Hyundai, th
e North’s deficiencies were exacerbated by Kim Il Sung’s promotion of his juche policy even as the regime relied heavily on the Soviet Union and China for support.
While the South moved toward capitalism, the North had a Communist-style, centrally planned economy. The state theoretically provided food, housing, clothing, education, and healthcare in return for the people working on state farms, in state factories, or, for the educated, in state institutions.
The system worked, in a fashion, during the 1960s and 1970s, when North Korea could barter its coal and other commodities for food and goods from China and the Soviet Union. But then China began its metamorphosis into a capitalist behemoth, and the Soviet Union collapsed. North Korea’s downward economic spiral accelerated. With the famine, the country came as close to the brink of collapse as it had ever been.
It was during this time that the centrally planned socialist economy began to unravel. The regime, unable to supply rations any longer, had no choice but to allow people to buy and sell food to survive.
Under Kim Jong Il, the government retroactively allowed the changes that had spontaneously taken place already. Experts have called this process “marketization from below.”1
The ad hoc markets that had emerged during the famine became tolerated. Grasshopper traders—people who sold goods on the street and could pack up and hop away quickly—became commonplace. Corruption took off as people paid border guards and others in positions of authority to turn a blind eye to their trading and smuggling. While the state economy ground to a halt, the private economy did indeed begin to grow.
The famine had unleashed an unregulated, scattershot kind of capitalism that was hard to repress, and it has accelerated rapidly under Kim Jong Un.
The Great Successor understood that by simply allowing a constrained form of capitalism, he could give people the ability to earn their own money and let them work their way to a better life. And it cost his government nothing.
So, since that first speech in 2012, Kim Jong Un repeatedly talked about the paramount importance of raising living standards.
A year later, he would make an even bolder claim. Having already had the constitution amended to declare the North a nuclear state, Kim Jong Un revived the “byungjin” policy of his grandfather. During a Workers’ Party meeting in 1962, Kim Il Sung had espoused a “simultaneous progress” policy that would pursue the development of the economy and national defense at the same time. “A gun in one hand and a hammer and sickle in the other!” was Kim Il Sung’s revolutionary slogan at the time.
Fifty years later, Kim Jong Un again promoted the idea that this regime could pursue both nuclear weapons and economic development—that North Koreans could have both guns and butter.
Up on the border with China, Mr. Hong, the money transfer merchant who’d had his life savings wiped out in the 2009 currency reforms, found the new leader’s promises far from convincing.
If Kim Jong Un cared so much about them, why were North Koreans in far-flung areas still eating corn instead of rice, and why didn’t even the well-to-do have bathroom essentials? “When Kim Jong Un said he was going to make the country strong and prosperous, no one believed it,” Mr. Hong told me. “How could we be strong and prosperous if we didn’t even have toilet paper?”
But the Great Successor had to choose this course to have a chance at staying in power. He understood that North Koreans, having had a taste of capitalism and the relative riches it can bring in a dilapidated Communist economy, had rising expectations. Plus, almost everyone in North Korea knew China was much richer and that South Korea was much, much richer.
Did Kim Jong Un remember his lessons on the French Revolution from his time at school in Switzerland? If he was to keep a grip on this totalitarian state and head off possible dissent, he needed to maintain a sense that life was getting better. He had initially concentrated on the crony capitalists who kept him in power, and this had been effective in his first years as leader. That would suffice for only so long. With economic disparities widening, he would need to make sure the ordinary people also felt like their lives were improving.
But Chinese-style reform and opening—allowing information to flow in at the same time as loosening up on the economic controls—was not an option for Kim. Allowing the population to have access to the truth would mean they would also see that the Great Successor was, in fact, not so great. But small economic “improvements”—North Korea doesn’t call them “reforms” because that implies there’s something wrong with the system—pose relatively little risk.
Instead, he allowed the markets, called “jangmadang,” to blossom.
From the smallest of towns to the biggest of cities, there’s at least one bustling marketplace. Across the country, these markets have become the center of daily life. They are overwhelmingly run by women, who, once married, are no longer required to work in state jobs. So while their husbands go off to coal mines without electricity or hospitals without medicine, the women make proper money.
People with permission—or with enough money to buy permission—to travel to China cross the Tumen River and bring back rice cookers, high-heeled shoes, solar panels, deworming tablets, colorful shirts, cell phone cases, and screwdrivers. Sometimes they bring literal kitchen sinks. About 80 percent of the products in North Korea’s markets are made in China.
Those who can’t travel set up shop as hairdressers or bike repairers, open restaurants, or sell homemade sweets. Some entrepreneurial types make money by renting out their cell phones for calls to South Korea or their apartments to couples wanting some privacy.
These markets have become the biggest agent for change that North Korea has ever experienced. People across the country have seen their living standards improve—just as Kim Jong Un promised. Maybe things didn’t improve as much as many citizens, such as Mr. Hong, wanted, but they’re still heading in a positive direction. There is now a middle class in North Korea.
There are now more than four hundred government-approved markets in North Korea, double the number that existed when Kim Jong Un took over the country.2 The city of Chongjin alone has about twenty. The markets in Sinuiju and the “smugglers’ village” of Hyesan, both close to the border with China, as well as those in the port city of Haeju, have all grown rapidly and visibly in recent years.3 Satellite images show new markets popping up all over North Korea and old markets moving into bigger, newer buildings.
With an average of fifteen hundred stalls in a market, there is stiff competition to secure a prime spot. A good stall in a prominent place in Hyesan was going for about $700 in 2015—an astronomical sum in North Korea. But there is so much demand for stalls that even these expensive slots are being snapped up as soon as they become available.4
At every turn, there is someone seeking to make money from the markets. The security services extract bribes from those seeking to cross the river into China. The supposedly communist authorities have embraced the decidedly capitalist concept of tax. People running stalls in the markets must now pay 10 percent of the value of their sales to the market management office. South Korean researchers estimate that the authorities rake in about $15 million a day in stall rental fees from merchants, while other estimates suggest the state can earn almost a quarter of a million dollars in a single day by levying taxes on stall owners.5
Each market is run by a manager, someone who is almost always a man and who is well connected with local bureaucrats. This is a powerful role that comes with the opportunity to make a lot of money—and, of course, an obligation to pay kickbacks to higher-ups who put them in the job.
As the state economy has failed, with industry grinding to a halt thanks to a lack of electricity or raw goods, the markets have become the lifeblood of North Korea.
South Korea’s intelligence service estimates at least 40 percent of the population in North Korea is making money through their own endeavors. This, the intelligence service says, is similar to the levels of marketization seen in Communist Bloc count
ries like Hungary and Poland before the Soviet Union collapsed.
The southern spies love to report signs of imminent collapse in North Korea. But their numbers in this case might, in fact, be too low. Other surveys have found that more than 80 percent of the population now makes its living through market activity.6 Once entirely reliant on the state, they are now part of North Korea’s burgeoning entrepreneurial class.
An even higher percentage gets its food from the markets—about 85 percent, according to a survey by the South’s Korea Development Institute. Malnutrition remains a big problem, with many North Koreans still struggling to get variety in their diets. The United Nations estimates 40 percent of the population is undernourished, and stunting and anemia are still major concerns. But the explosion of market activity means that people are not dying from hunger anymore.
North Korea’s economy, far from being a defunct state teetering on the edge of Soviet bloc–style implosion, has become relatively stable. North Korea does not produce reliable statistics, but outside estimates suggest that it has been growing. South Korea’s central bank, which is always conservative in its figures, suggests that North Korea’s economy has grown by about 1 percent a year under Kim Jong Un. One South Korean think-tank, the Hyundai Economic Research Institute, predicts growth might hit 7 percent.
Even by the South Korean central bank’s more cautious estimate, North Korea’s annual output has more than doubled since Kim Jong Un became leader.
The millennials, who were born or grew up during the famine years—Kim Jong Un’s generation and younger—did so with markets as part of their daily life. They are often called the native capitalists—or the Jangmadang Generation.
The Great Successor Page 11