Pyongyang "gives in" to capitalism, allows private businesses
Seoul (AsiaNews) - After more than 60 years of a centrally planned Stalinist economy, capitalism is making its first inroads in North Korea.
Conservative South Korean newspaper Chosun Ilbo recently reported that since the collapse of the North's state-run food ration system, which underpinned the regime and the Kim family's rule, the authorities were forced to phase it out in favour of small businesses run according to an independent management system.
According to some sources, a capitalist system is emerging from open-air markets that are not run by the state and are technically illegal. Nevertheless, most of the time, farmers, workers and craftsmen are allowed to exchange their goods.
Over time, success in these markets naturally has led to other business ventures like in other parts of the world. The authorities have allowed this to happen in exchange of a share of the revenues.
One market trader in Chongjin, North Hamgyong Province, started his own textile factory after pooling US$ 30,000 from his family and friends, a source said.
"On paper the company belongs to the state, but he is in charge of hiring workers and oversees the entire business, from raw materials purchases to production, sales and even the distribution of profits," it added. As in the case of many other firms, most of its output goes to China.
Each of the dozen or so workers at the factory earns around US$ 50, with 30 per cent of the factory's monthly revenues handed over to authorities as a de-facto corporate tax.
The Choson Sinbo, a pro-North Korea paper in Japan, recently reported that in March labourers at the Electric Cable Factory 326 in Pyongyang earned up to 100 times their ordinary salaries, reaching up to US$ 40.
A recent defector from South Pyongyan Province recalls that the Pyongsong area, in the central region, has seen transportation companies spring up, run by people who import small used tractors from China and farm other people's land for a fee.
"A large number of businesses in North Korea recently moved to an independent management system and are noticeably different than they used to be," said Kim Young-hee, another North Korean defector who now works for the Korea Finance Corporation.
.png)
