them, probably because it realized that it could not provide for its people as in the past, and because of the impossibility of shutting them all down. Many of North Korea’s elite and senior members of the Korean Workers’ Party leveraged their positions to engage in this same sort of private trade, though usually on a much larger scale. “The Kim regime has survived, and in some ways prospered,” noted William Brown, a former senior official at the Office of the Director of National Intelligence and an expert on North Korea’s economy, “by allowing continuous growth in market activity often at the expense of state enterprises and state control.” The government started legalizing markets as early as 2003, according to South Korea’s Korean Development Institute, and by 2017 the institute estimated that there were more than 400 state-sanctioned markets in the country, and if they counted the informal markets carrying on business in the alleyways, the number could be as high as 750.
Recognizing the need to assert the government’s role in economic activities and to generate goodwill for Kim Jong Un, the regime has tried to replicate in the provinces what it was doing in the capital. For example, in Sinuiju, a midsize provincial city with a population of around 350,000 people, according to the 2008 North Korean census, the most recent one we have access to, the regime built a new stadium and a theater, renovated schools, and began construction on a new park, to demonstrate, it was made clear, their leader’s love for the people. Kim also expanded and renovated facilities for market activities, providing a tax boon for the central government as well as for North Korean entrepreneurs. Data on whether this type of project has succeeded in generating goodwill toward Kim is hard to come by, given the difficulty of eliciting honest responses from North Koreans, who are afraid of expressing anything resembling criticism of their government.
As for the countless, smaller unofficial markets, the regime has been unable to tame them. For example, John Everard, a former British ambassador to North Korea, witnessed a police raid on one that consisted of just a handful of women. When approached, the women ignored the police at first but then packed up their bundles and just moved to another street. As soon as the police left, they set up their stalls again at the original spot.
North Korea’s economy, as the political scientist Robert Kelly has described, “is an incredibly inefficient, byzantine arrangement of bribes, cronyism and favours that make for a near-impenetrable business atmosphere in which no one is sure where the state ends and private economy begins.” The moneyed elites, known as the donju, “the masters of money,” have generated their wealth by taking advantage of the ambiguous spaces created by Kim Jong Un’s tolerance for market activity.
Indeed, the rise of the donju has been one of the most profound changes in North Korean society over the past two decades, according to defectors and as reported by the tourists and journalists who have witnessed it in their travels. “There are great and unexpected changes taking place within North Korea,” the elite defector Thae Yong Ho explained in testimony before the U.S. House of Representatives. “Contrary to the official policy and wish of the regime, the free markets are flourishing.” Of course, national policy is one thing, but actually implementing it is another, and given the web of relationships and money flows between North Korea’s small entrepreneurs and the local officials, it would be difficult to make big changes in these now entrenched practices without massive disruption and potential unrest. Some estimates indicate that 1.6 million North Koreans are working in informal markets, producing, on average, 70 to 80 percent of a North Korean’s income.
As numerous experts and North Korea watchers have pointed out, the country’s urban elites are making money, and lots of it. They are wearing colorful designer clothing, driving Audis, carrying leather bags, and using cell phones from China. They spend their money on the new amusements dispensed by the regime and provide their children with goods unfathomable a generation ago. They are hailing taxis to get to their destinations, often buying snacks from one of the many stalls as they wait. Even as early as the aughts, money was shaping the lives of children born to the donju. Yeonmi Park recalled that in 2000 her father, who was a smuggler, brought back “loads of gifts”: perfume, new clothes, books, makeup, and a 1980s-era Nintendo