Markets provide relief for ordinary people hurting from sanctions

Kang Mi Jin  |  2018-01-02 16:12
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The United Nations Security Council passed an additional four separate sanctions resolutions this year (2356, 2371, 2375, and 2397) in response to North Korea's continued provocations. But what economic effects are these sanctions having on ordinary citizens in North Korea?
While sanctions are helping to cut off the Kim regime's foreign sources of funding for its missile program, ordinary citizens are not emerging unscathed. Reports are emerging across the country of worsening conditions compared to the end of 2016. 
Since Kim Jong Un came to power, the people of North Korea have enjoyed a relatively stable economy free from significant interference in market activities, which has mitigated the threat of famine. However, economic conditions have worsened as sanctions measures intensify.
Coal workers are a primary example, with many finding themselves on the streets after international sanctions banned the export of North Korean coal. In addition, related businesses such as restaurants catering to workers and coal shipping companies have lost work. Textile and fishing industry workers have also felt the rippling effects of sanctions, losing significant revenue. 
Markets provide opportunity for North Koreans to dig themselves out of hardship

However, the majority of North Koreans are not just sitting back as the difficulties multiply. With little expectation that the government will step in and deliver beneficial reforms, the people have taken it upon themselves to pull each other up by their own bootstraps through market trading.
New occupations are continuously appearing, such as the compost distributors (middlemen) that have shown up just this year. Instead of receiving jobs from the government, people have taken to entrepreneurship, filling niches in the growing market economy. 
A source in Pyongyang who spoke with Daily NK on December 26 said, "Things have gotten quite difficult this year, and people are out doing what they have to do to earn money and survive in these conditions. But there are all sorts of occupations and market activities now, which we could have hardly imagined during the time of the great famine."
The real estate market has taken off and financial services are on the rise. Merchants now offer rental services for items targeting university students. Even water carriers have returned as a paid service after a 50-year absence. 
The fuel sector has also seen similar growth. Although the price of diesel and gasoline has risen with sanctions, fuel industry workers have found an expanding customer base in the growing servicha business (taxi and freight transport services).
"When the price of fuel went up, the donju and drivers who run the servicha businesses started using larger trucks capable of holding more cargo. Instead of raising the usage fees on customers, they started using trucks that could accommodate more customers and thus earn more money to pay for the rising fuel costs," the source said.
Collectively, these developments have shown that market activity has provided solutions to the difficult conditions. Market activity has intensified this year, exemplified by new used goods businesses and crowds of customers seeking out wholesalers in alleyways offering bulk packages for slightly cheaper than normal. 
As a result, ordinary citizens no longer rely on the government -- who they see as completely unconcerned with the people and solely focused on weapons development. Instead, they are now used to solving their problems themselves. In response to the economic blockade, the number of smugglers has simply increased to fill the gap. Even university students are now getting into the smuggling business," a source in North Hamgyong Province said.
Security agents obsessed with idea of intercepting defector remittances as government starved of funding
Being the primary target of international sanctions, the regime itself is also facing difficult economic times. Severed trade in minerals and other highly lucrative sectors with its primary trading partner China have proven damaging to the leadership. 
A Reuters report released on December 27 investigating trade between the two countries recorded $388 million worth of trade in November 2017 -- 36.7% less than the $613 million recorded for the same month a year prior. Regarding North Korean exports to China specifically, the number dropped 61.8% over the year, from $262 million in November 2016 to $100 million this November. 
Although Kim Jong Un claims his country's nuclear ambitions are intended to strengthen the nation, they have had the opposite effect by drawing a barrage of international sanctions. In addition, the government has faced mounting pressure from citizens and even cadres who have had a difficult time finding food due to last year's severe flooding in the north, as well as the subsequent drought and poor harvest. 
But the authorities have continued to focus only on handing down payment demands, coming up with various new pretenses for extracting taxes from the people. 
One of the most popular new methods amongst officials is to target remittances from defectors living in South Korea. 
A source in Ryanggang Province said that since the beginning of this year, "security agents have been following people with known defector family members, sticking to them like glue 24 hours a day if they catch wind of remittances coming through or if they see them suddenly living better." The agents are known to demand bribes for various reasons from families known to be receiving cash from abroad.
Individual law enforcement agents have also been trying to find and control smuggling routes, using their authority to extract bribes from traders involved in such officially illegal activity. 
Criticism of the regime on the rise, population now primarily concerned with earning a living
Ordinary citizens who saw themselves as unaffected by sanctions over the last few decades are now finally starting to feel the effects, causing many to begin criticizing a regime that has done nothing to alleviate the problems caused by sanctions. 
"Unlike in the past, there are new kinds of fees that people have to pay which are not officially considered taxes. They are criticizing the government for this and for ignoring the food shortages," a source in Pyongyang said.
"Everyones money is disappearing quickly this year, as weve had to deal with the poor harvest and the halt in trade (from China). They're wondering how long the blockade will last, blaming the problem on the government's pursuit of nuclear weapons, which they think do not help the people in any way."
The source also said that the central authorities are demanding "loyalty" or "patriotic" payments from everyone underneath them. Cadres are out demanding money from people under these pretenses, and ordinary citizens are responding with criticism, saying they are 'squeezing every last drop of money' from people who are working so hard just trying to make a living.
The regime is almost guaranteed to draw additional sanctions upon any further nuclear tests or provocations, meaning next year the North Korean people will likely also continue to experience economic difficulties. At the same time, popular sentiment will continue to turn against the regime. 

*Translated by Colin Zwirko

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