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| The Korea Institute for National Unification hosted a press conference titled "Eight major changes in North Korea's economic society in the days of Kim Jong-un" at the Press Center in Seoul on Thursday Korea Times photo by Jung Da-min |
By Jung Da-min
Despite North Korean leader Kim Jong-un's much-publicized on-site inspections of a Pyongyang bag factory or a Sinuiju cosmetics factory and other manufacturing facilities, service industries such as trade, retail and lodging are the main forces behind its economy, experts say.
"The economic development of North Korea has been faster than before with an accelerated market economy since Kim Jong-un took power, at least before the onslaught of international sanctions," Lee Seog-ki, senior research fellow at the Korea Institute for Industrial Economics and Trade (KIET)'s Center for Global Industry and Trade told a Korea Institute for National Unification (KINU) forum in Seoul on Thursday.
"It is the commercial, distribution, tourism and other service industries that are leading economic growth in North Korea."
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| This 2006 file photo shows Pyongyang citizens at the Central District Market in Pyongyang. Yonhap. |
North Korea's accelerated embrace of a market economy can also be observed in the business and labor fields, according to KINU research fellow Hong Jae-hwan.
North Korea is expanding the autonomy of corporations, allowing them to adopt market principles to some extent while boosting incentives for corporations and workers.
These changes have come since Kim Jong-un took over.
"The state has reduced interference, giving them discretion to make up plans and implement them according to their own realities," Hong said. "On some products, they may make their own pricing decisions."
"It is also moving toward legalizing companies' mobilizing funds from private investors called 'donju.'"
The move to give more legitimacy to commercial activities and financial activities can also be seen in the finance sector.
According to KINU researcher Joung Eun-lee, the North has been trying to incorporate disfranchised residents back into the central banking service, while putting strong emphasis on the concept of "credit." They now relied on private lending.
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| A citizen purchases a government a government bond at a bank in Pyongyang in this 2003 KCNA file photo. KCNA-Yonhap |
"North Korean people have avoided the central bank because they cannot withdraw their money when they want to, but Some North Korean defectors I recently interviewed testified that they had deposited in the central bank and had also received interest, though they are rare cases," Joung said.
Joung said these moves were evidence that the country had engaged itself in the market economy since Kim Jong-un took power.
"North Korea is emphasizing the concept of credit, and the electronic payment card system is also spreading among its residents with its convenience of not having to carry cash. The installation of card payment terminals is increasing not only in about 500 general markets but also in stores."
According to Jeong Eun-mee, visiting fellow at Soongsil Institute of Peace and Unification (SSIPU), the appearance of beef on the tables of North Koreans is one of the remarkable changes with the end of food ration system ― except for certain jobs such as factory workers.
"It was hard to imagine buying beef in the past, because cows were an important means of agriculture," Jeong said.
She also said North Korean people had started to consider apartments as symbols of showing off their wealth or success.
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| The Pyongyang skyline as seen in this 2016 AP file photo. The 105-story Ryugyong Hotel is a feature. AP-Yonhap |
The concept of buying services was also spreading to the education sector, said KINU researcher Cho Jeong-ah.
Cho pointed out that private tutoring was being used in some major cities, showing that people had started to regard education as an object of purchase for personal benefits, not as a public service offered by the state.
Jeong added, "Consumption for education is often observed in middle class households "This is interesting in that education is being perceived as a ladder to a better class."
Meanwhile, KINU researcher Park Young-ja said women rather than men had led North Korea's economic and social changes.
Park said North Korea had pursued a military-first policy "Songun," that defined men as warriors in front and women as warriors in the rear. But without a war, men paradoxically had failed to find their roles, while women, especially mothers, started to gain a stronger voice while taking responsibility for the domestic economy.
"Although nursing and housework are still considered to be a mother's role, there is a growing awareness among young people to respect women, considering that they are socially underprivileged," she said.
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| On the 108th anniversary of International Women's Day, North Korean women workers attend athletic and amusement games at the Pyongyang Gymnasium in March this year. KCNA-Yonhap. |
There had also been a change in attitudes toward marriage and childbirth, Park said.
"Young people often do not report their marriage or report it late, because they want to avoid the mobilization of the nation required for married couples," she said.
"Many couples tend to think one or two babies are better than having more, and this is not because of poverty like it was in the past, but because they want to provide better environments for their children. The low fertility trend is more notable among high-income households."
She said the divorce had also been rising in recent years.
"There is a consciousness among women that they no longer have to stay with their husbands while being beaten by them," she said. "Divorce, in a way, is a declaration of independence by women."
