The following is a guest post by Gene Choi, a student from South Korea who has been helping us this summer as a researcher.
North Korea is changing—not in terms of the political atmosphere and the recent leader-shift or the economy, but in terms of its culture.
20 years ago, people wore black baggy pants and loose long-sleeves all day long, all year around. Hairstyles were similar as well—shaggy for men, short or ponytails for women. No accessories were to be seen, and everyone had black hair. Everyone looked the same and uniformity was beauty.
In the present era, however, images from the Associated Press and South Korean media show a different, more familiar picture (although the ones from North Korea’s state-owned media depict similar images of the past). Now, at least in Pyongyang, people are wearing shorts and shirts with color; people are wearing accessories; you can actually distinguish one person from another. Most of all, they are dyeing their hair to different colors, a popular fad among North Korean teenagers and college students, not only among the general public, but also among the children of well-off and high-profile members of the Workers’ Party.
Admittedly, what the media portrays when talking about the South Korean cultural wave is more or less a form of hyperbole. Newspapers and magazines depict the phenomenon as if it were a pervasive and popular movement, but interviews with defectors and surveys indicate that only half of the people have had access to such foreign media. What is notable, though, is the expanding accessibility to such material and the lessening gap between the number of people who have access and the number of those who actually utilize or involve themselves with it, indicating a gradual but steady pervasion of foreign culture into the previously hermetic nation.
The largest influence of this pop culture boom comes from none other than its neighbor, South Korea. The pop culture of South Korea, which is already spreading throughout all of Asia, Europe, and even America (a cultural wave often called Hallyu), is being introduced and shared among the people of the North. The reason is clear: NK songs, for instance, all involve chants glorifying their great leader Kim Jong-il or the Workers’ Party, which is, undoubtedly, not as enjoyable as fast, modern hook songs. Drama, a huge industry in South Korea similar to soap-operas in the US and Great Britain, is also enthralling many North Koreans. In fact, it is well known that former leader Kim Jong-il loved the South Korean actress Young Ae Lee so much that he bought DVDs of dramas and movies that she starred in, and even received them as presents during the North-South Summit of 2000. What is surprising, though, is that these goods are all illegal in North Korea. The only way to access them, therefore, is the black market.
The cultural influx has likewise intrigued many other members of the Workers’ Party, and they are also engaging themselves in the new unofficial market, although they bash capitalism on an ostensible level. What is most surprising is that the government itself is even sometimes involved, such as recent reports by the IAEA that Pyongyang bought nuclear equipment via the underground market.
But on the surface, of course, the government is harsh in trying to root out all “evil media” from outside sources, with the ultimate purpose of making its citizens blind and deaf to the real world just outside their borderline. A 2007 directive, for example, ordered all unauthorized MP3 players to be confiscated, and a 2009 directive banned the importation of DVDs and scrutinized them to only allow domestically produced videos, thereby aiming to rid of “potentially rebellious and dangerous” material. Yet the rising market has already grown to a size of $2.24 billion and is likely to continue expanding.
The birth of the black market is, by nature, imprecise in its exact date, yet it is assumed to have existed since socialism was established, although primitive in this stage. The baby boom era in the late 1950s initially stimulated the black market and introduced many North Koreans to a new economic system, as the distribution system proved unable to feed and sustain the sudden rise in population. From this period forward, the underground capitalistic system was developed, almost paradoxically, by communistic policies.
For instance, one of the main economic policies Pyongyang undertook after realizing that it could not feed its people and that it was running out of funds for the Party was earning foreign currency. Accordingly, institutions were created solely for the purpose of bringing in dollars and the yuan. Authorities took advantage of their monopolistic privilege and used the price margin between the internal and external market to earn substantial amounts of profit. Farmers would be hired to produce exportable goods, mostly farm and fishery products that are in high demand and thus expensive in the foreign market but in low demand and thus quite inexpensive in domestic market. Government agencies would buy those products from farmers at low prices and export them at a high price to foreign market like Japan for high profit. Those farmers would be specially compensated with “favor goods”—products rarely seen in the North Korean society such as TVs, radios, and laundry machines. What officials failed to realize, though, was that the favor goods could be sold at high prices in the black market, making almost a farmer’s annual income by selling just a few. Likewise, inadvertently, a series of socialistic policies almost necessitated the very model it was aimed to avoid and destroy, thereby creating a unique dual economic structure (for more detail, see here).
The underground economy gradually grew throughout the 70s and 80s until it exponentially expanded as a source of obtaining food during the 1990s, a period in which North Koreans were struck hard by a record-breaking famine after the Soviet and Eastern bloc collapsed. Ever since, many Koreans have resorted to the underground market for buying other consumer products as well, thereby expanding both its size and accessibility. Perhaps the greatest impact this emerging market had on the North Korean public is a change in perception and knowledge, all which came from outside media. Grown and raised in an environment which indoctrinates and brainwashes its constituents, North Koreans had previously believed that they were gifted to be protected from their “axis of evil,” capitalism. But with the influx of and exposure to foreign media, the citizens began to see the real picture. And with starvation still prevalent in its society, more of its people are turning away.
Among these foreign media, radio is the primary source; 67 percent of defectors in a poll answered they have been constantly listening to South Korean transmissions, which could be readily received near its border with China and with the help of corrupt security officials. In addition, cell phones, which were officially declared legal in 2008, are now owned by a significant number of people, reaching a shocking 1 million users in 2011, according to Reuters. Illegal cell phones that enable contacting people from outside the country are simultaneously growing in number, as users blend in well with the profusion of legal cell phone users. These communication devices are being used as direct medium to engage in under-the-table transactions by contacting brokers and trading information. Both radios and cell phones are becoming important catalysts for a more open and capitalistic society.
But illicit trade, as helpful as it may be in the context of North Korea, is of course not without its problems. Because the market is growing so fast, inflation is substantially high. The increasing desire for high-quality foreign products causes a rise in dollar demand, making its value in the black market skyrocket 19 times from the period 2002 to 2009. This suggests an average of a 160% annual increase and an exchange rate 40 times higher than that set by the North Korean government. The 2009 redenomination, although mainly targeting inflation in the official domestic market, was partly aimed to weaken the base of the emerging wealthy class who utilize this black market, but it more or less failed; inflation rates are back to pre-redenomination levels and the price of food products are unprecedented, both in the official and underground economy. For example, according to the Daily Telegraph, Choco Pie, a popular South Korean chocolate cracker brand, was revealed to be sold at the black market for $9.50, more than 36 times more expensive than the retail price in South Korea and nearly a sixth of the wage of an average worker. To make matters worse, the trade balance deficit that has been persisting for the past 30 years and the ensuing decline of foreign exchange reserves continue to exacerbate the situation. Compounded by the increasing dependence on China after the 2006 nuclear crisis (in 2008, investment from China amounted to 94% of the total FDI), North Korea’s “official” socialistic economy has rapidly declined and has given rise to the development of a new “market.”
What keeps this market going is not only the increase in participants, but the constant input of money; workers’ remittances facilitate this illegal trade by pouring foreign currency to the underground money supply. The money the 23,000 defectors living in South Korea send back to their homes amounts to $10 million a year, and the security officers of North Korea, who also need money to sustain themselves, simply do not crackdown on foreign currency and are openly accepting bribes. The constant inflow of such foreign currency can only be used in the black market, and so people start avoiding the existing, outdated socialistic model. Interviews with defectors often note that they utilize the underground market for its diversity of products unseen in the official market authorized by the government. What is more, children of high profile families are getting increasingly interested and involved in the more lively and diverse world around them through the variety of exotic products in the black market, thereby setting a new potential for change in the following generation.
On the government-level as well, profound changes toward a more capitalistic economy are already taking place: agriculture products, which used to be wholly taken by the government and rationed to its people, are now only 70% owned by Pyongyang and 30% by farmers under the new economic reform by Kim Jong-un, after realizing through a series of failures that obstinacy of adhering solely to socialistic ideals will not solve famine or other economic crises. Public awareness is evolving. A growing number of people are being exposed to a completely new economic structure that comparatively functions well and are seeing people involved in this trade become as rich as ever, thus creating a tacit consensus that this foreign system works. A motto that every North Korean lives by, according to a Chinese broker, is, “business is survival”.