Capitalism in N. Korea
Kookmin University professor Andrei Lankov contributed an article to US-based NK News on November 14 (local time), saying that North Korea is witnessing the formation of the bourgeoisie and the newly rich.
He mentioned in the article, “Pyongyang appears to be maintaining the Stalinist concept of socialism these days, but its government officials are seeing the private economy emerging there to cause a wealth divide.” In short, it is showing some signs of significant wealth inequality amid the early stages of capitalism. “Most of the North Korean population are still stricken with poverty but there are some better-off people, including non-officials and middle-class entrepreneurs, who own hundreds of thousands of dollars,” he added.
Until as recently as the mid-1990s, most of the upper class in North Korea were party officers and government officials. They hid their assets effectively and thus others could not notice how wealthy a life they lived. However, according to the professor’s remarks, all of the people are well aware of the fact that they drive their own cars and pay huge sums of money to eat out in fancy restaurants in downtown Pyongyang.
He continued to explain that he has pretty good evidence of this point, although there are no statistics for now about who newly rich and what their income sources are. “It seems that many of the nouveau riche have gathered wealth through bribery and collusion while running state-owned companies, or made a sizable fortune during or right after the severe famine in the 1990s,” he said, adding, “As of now, those with a monthly income of US$300 to US$400 or higher are considered rich, and very rich if the amount exceeds thousands of dollars.”
In North Korea, air conditioners, refrigerators, washing machines, and the like are regarded as luxury items. These are rarely in use in reality but just exhibited in most cases, due to the high frequency of power outages. Many upper-class people have LCD TVs, electric cookers, and furniture imported from China, too. Self-owned cars are owned by top 0.1% of the population, and most of these are in the name of national organizations to prevent any problem from arising. Traveling not just at home but abroad is very limited even for the wealthy class, though.
“Real estate transactions have begun to be made between rich people, though illegal, and a high-rise apartment house is currently purchasable at US$10,000 to US$25,000 in a small town and between US$50,000 and US$80,000 in Pyongyang,” he continued, declaring that Leninism is done in the North.
“Over time, the private market in North Korea will become a space where rumors concerning the external world are freely circulating, and the population will be less and less dependent on rationing for their livelihood if capitalism is in progress there,” he explained, adding, “This will be of no good to the Kim Jong-un regime, but the key officials and the wealthy class are in the same boat when it comes to the gradual change in the economic system.”