4.4 Findings
4.4.7 Money talks
Ri’s answer is succinct but solemn: “The fact that I can survive.”
with climbing the social ladder in North Korea. “My generation focused on earning money,”
she says, explaining that survival trumped pleasing the political elite. “People seek to find ways to generate revenue for themselves, even through illegal ways. [My generation] didn’t try to become a Party member or pursue a high social status.”
Hye Mi, a 31-year-old woman from Chongjin, also emphasizes reliance on black mar- kets for Millennial North Koreans. “We had to wait to die when rations stopped... [but] peo- ple know how to survive because of jangmadang,” she says. Hye Mi and others describe the multitude of entrepreneurial activities that emerged in North Korea’s black markets.
Some smuggled clothes, some hawked tofu, others sold counterfeit DVDs from China and South Korea. Hye Mi peddled bootlegged moonshine she made in secret. She laughs at this admission bashfully but with obvious pride, and with good reason - her generation birthed a nascent middle class beyond the purview of North Korea’s carefully craftedsongbunstrata.
Apart from smuggling in commodities, many people also went to China to work and send money to their family in North Korea. “Leaving North Korea was not just for myself but also for my family, to earn money for them,” says Su Kyoung. Many interviewees stated that a parent or other relative left North Korea first, years before they did, and would often send money or items of material comfort. This helped many survive. Kyu Ri mentions she was never able to buy clothes for herself in North Korea but because she had an aunt in China who sent her clothes and other necessities, she was relatively more well-off than other people in her neighborhood. In fact, in the first decade of the 2000s, families of defectors were often the richest in their neighborhood (Demick, 2010).
On November 30, 2009, North Korea launched a surprise currency reform ostensibly aimed at battling inflation. Old banknotes were to be taken out of circulation with new notes devalued by a factor of 100. People were given less than a week to exchange a maximum of 100,000 won (approximately $40 dollars) for new banknotes. By placing a cap on the amount of notes an individual could exchange, these measures effectively wiped out the fledgling middle class that had emerged in post-famine North Korea. This was an act that
punished independent entrepreneurs by confiscating the wealth and savings individuals had accumulated outside of officially sanctioned economic activities.
Further, the 2009 currency reform was designed to reward those who remained loyal to the Party and Kim regime by not becoming “shameless anti-Socialist profiteers” (Lankov, 2013). All those employed by state-owned enterprises were to receive the same amount in wages of the new currency as they did the old currency (Lankov, 2013; Lim, 2010).
This further punished those engaged in black market activities as the resulting avalanche of inflation reduced the value of their holdings to next to nothing given the limitations placed on the amount of currency they could exchange.
Lankov (2013) describes the 2009 currency reform and its aftermath as moves intended to “destroy” the markets as they allowed ordinary North Koreans an alternative to depen- dency on the state for survival. North Korean authorities seemingly confirm this notion. In an interview with the Associated Press, Ri Ki Song of North Korea’s Academy of Social Sciences stated that “Markets will be removed in the future, by reducing their numbers step-by-step, while continuously expanding the planned supply through state-run commer- cial networks.”16
The corresponding crackdown on markets severely inhibited people’s ability to earn money and make ends meet. Jun Ho says his family survived the famine because his mother opened a bakery. While the bakery was successful, his mother and brother elected to flee given the precarious and “unpredictable” economic situation. Jun Ho emphasizes that “pri- vate business is illegal” in North Korea, meaning “business success is not permanent.” He angrily states that his family had to leave because they were “not allowed to make money to survive.”
Moon Ju was preparing to go to college to be a nurse when the 2009 currency reforms were carried out. When asked about her motivations for leaving North Korea, she says
“My biggest problem was that my family was impoverished... First of all, my family was
16“North Korean prof says private markets must go,”Korea JoongAng Daily, April 3, 2010, accessed April 25, 2022, https://koreajoongangdaily.joins.com/news/article/article.aspx?aid=2918717.
one of the biggest victims from the currency reform. Second, I needed money so I had to go to China. Third, I couldn’t earn money while working so there was no choice but to defect.” She goes on to discuss how she and her family could not afford to eat given the impoverishment thrust upon them by the North Korean State.
Moon Ju estimates that her family lost about 80% of their wealth due to the currency re- form. “People had no choice but to throw away their wealth that they had saved,” she says.
She describes the currency reform as one of many hardships, but ultimately the one that broke the camel’s back for many in North Korea, particularly women as women increas- ingly became the sole source of income for their families following the Arduous March and the collapse of the Public Distribution System. Like many others, this prompted her to flee in hopes of securing greater financial security.
North Korea also inflicts physical punishments on those unable to meet their financial obligations to the state. Bo Ram, a 54-year-old woman from Chongjin, describes a type of tax that she calls “loyalty money” that each family was required to pay to the government once a year. After the Arduous March, many were unable to pay this levy. She explains how even her younger brother who was serving in the military was also required to pay loyalty money. His unit, however, was unable to generate sufficient revenues and, fearing for his life, he fled. Bo Ram describes how the military came to her home searching for her brother after he went AWOL and left him bruised and bloody once they found him. Bo Ram tells me that others who were unable to pay their loyalty money faced political prison and sometimes were even executed.
By disproportionately targeting individuals with economic punishment, North Korea places individuals in such precarious economic circumstances that threaten their ability to live. The 2009 currency reform was designed to intentionally confiscate the wealth and savings of those operating outside of North Korea’s planned economy while rewarding those legally employed within it. By limiting market activities outside of the purview of the state, North Korean authorities seek to enhance dependency on the regime. This enables
the state to distribute economic rewards on the basis of political value to the regime and disregard the economic needs of the masses. By cracking down on markets and destroying the wealth those outside of the political elite had accumulated, North Korean authorities crippled the ability of individuals from lowersongbun orders to survive. Those unable to meet their tax obligations as well face threats to their physical security with punishments up to and including death. Straight from the mouths of individuals who fled North Korea, poverty forces people to flee, particularly poverty resulting from economic persecution.