When Rüdiger Frank visited North Korea, he expected to see surreal images of xenophobia and nationalist pride that the regime’s tightly controlled media showed the world. Instead, he stumbled into Pyongyang’s Tongil street market which was packed with women selling items ranging from tropical fruits to refrigerators. In a country which champions state-run grocery stores, self-reliance, rationed goods, and rigid price controls he was taken aback to see these women boldly buying and selling imported goods in Chinese renminbi, Japanese yen and even dollars.

These women-led informal markets, termed jangmadang, now form the backbone of the world’s lone remaining authoritarian socialist state. Beneath the pride and pomp of the regime’s celebration of five-year plans, production quotas, and central planning is a country dotted with flourishing markets. They operate beyond the ambit of the State Planning Commission in Pyongyang which manages the country’s socialist economic system, where all households are employed in official workplaces comprising the public sector, bureaucracy, and collective farms. In return, consumer goods from grain and vegetables to soap and clothes are distributed by the Public Distribution System (PDS) through rationing. Yet, working class solidarity does not seem to be present in this socialist system as each household’s purchasing power differs according to its rank within the songbun system, where the goods and services distributed fluctuate on the basis of one’s work, age, loyalty to the Kim dynasty, and residence.

The dire poverty and starvation produced by this structure reached a crisis point when the PDS utterly collapsed with the fall of the Soviet bloc on whom Pyongyang relied heavily for subsidised imports until 1990. As the PDS failed, North Korean women stepped in, sparking the bottom-up marketisation of the world’s last command economy.

The Rise of the Jangmadang

By 1998, the Democratic People’s Republic of Korea’s (DPRK) GDP had shrunk by 40%, coupled with an extreme food crisis with the average amount of rationed grains per day dropping from 700 grams to 492 grams by 1992. Most firms were operating either at or below 50% of their capacity. The regime still demanded the predominantly male workforce to report to their assigned roles even if their enterprises were shut down or produced less, in an effort to maintain surveillance over its people and avoid unrest.

It is this vacuum which incentivised women to take charge as the regulation did not apply to them. Any married woman could register as a “housewife” which greatly loosened state control over them while granting them provisions to engage in informal activities such as cultivating kitchen gardens and private plots. These humble kitchen gardens laid the foundation for the rise of grey-markets as women discreetly started cultivating and trading food along with exchanging essential goods. By 2008, half the population were engaged in cultivating kitchen gardens and poultry, with women making up the lion’s share of these activities.

These small initiatives that started out from their homes as means of trading food with their trusted neighbours quickly developed, as pop-up stalls and home run businesses sprouted across the country. Today, they have evolved into product markets in downtown centres throughout the DPRK with sophisticated networks operated by smugglers who bring in foreign commodities, including fashion, technology, coffee, beer, and Coca Cola. Some traders even began to sell shares of their operations, and most transactions are conducted exclusively in foreign currency due to the volatility of the North Korean won.

Today almost 71% of households participate in the jangmadang for buying or selling as grey-markets have swept across the landscape left open by the country’s decrepit PDS making the DPRK a highly informalised economy. Numbering around 730 large markets combined with smaller operations, the jangmadang system entertains almost 10,000 visitors daily and is identified by its iconic, blue-tarped roofs, making it an integral part of most North Korean individuals’ economic life, accounting for 90% of household expenditure.

Her Market, Her Rules: Women Breaking State Control

Faced with a rapid loss of control over his planned economy, Kim Jong-Il waged a losing war with the jangmadang system starting from 2009 when he launched the “150-Day Battle” campaign to forcefully mobilise the labour force back to collective farms and public sector industries. This resulted in further deterioration of economic performance as the workers merely bribed the state officials to be absent from their work with more than half of workers reporting absence from state enterprises. This was followed up by forbidding women from market trading, street vending, or sales, which backfired as women diversified the jangmadang from goods to services like credit-lending, transportation, currency exchange, and opportunities to conduct minor investments thereby leading to the further proliferation of the grey-market system.

Therefore, the regime was compelled to shift from coercive suppression to a more regulatory strategy of collecting taxes and issuing licences on market activities instead of a complete abolition. The regime recognises the potential for popular unrest resulting from the state’s attempt to seize citizens’ last viable means of sustenance given the financial and logistical inability of the PDS to sustain the population. Hence, the DPRK’s economy reflects a decaying command economy framework propped up by marketisation from below as the jangmadang rapidly became its bedrock, exemplified by the fact that individuals can earn up to 80 times more from the informal economy relative to participation in the formal economy.

Commerce as Counterpower

At first glance, the rise of grey-market capitalism may not seem to be in favour of the Kim regime. However, a deeper analysis reveals nuances. Although the jangmadang operates in defiance of the strict ideological goals set by a planned economy, it largely co-exists through bribery and collusion with the bureaucracy rather than espousing a complete replacement of the ruling dispensation. Probabilities of regime change are presently low as the bureaucracy realises that a complete toppling of the regime would also put their own existence into question. From Kim Jong-un’s perspective, tolerance to the jangmadang system placates the North Korean people while also blunting the economic pressure from Western sanctions as he can avoid structural reforms to the DPRK’s political economy.

Yet the jangmadang women have risen up as a fellow stakeholder to the DPRK’s survival, as an equilibrium has been established among the market traders, the bureaucracy, and the supreme leader. Although it benefits the dispensation short term, it has clearly broken its centrally planned economy, eroded the regime through corruption, and has fundamentally changed the support North Koreans have for socialism and the command system built atop it, as a new shadow middle class emerges outside of the socialist framework. The women of the jangmadang have shown that even within one of the world’s most closed systems, market initiative finds a way to endure.

Written by Chethan Shajan, Edited by Yoana Kartova

Photo Credit: Markus Winkler (Uploaded 29 March, 2019) on Unsplash