(News Focus) N. Korea's burgeoning market economy to help warm inter-Korean ties
2015/11/11 14:10
SEOUL, Nov. 11 (Yonhap) -- Growth in marketplaces in North Korea can serve as a catalyst for improving frayed inter-Korean ties as they will prod the North into carrying out reform and liberalization, analysts said Wednesday.
But they also said whether North Korea is willing to give up its nuclear weapons program will be a major point of consideration for South Korea in deciding ways to spur inter-Korean economic cooperation and ease Seoul's economic sanctions on Pyongyang.
The North has operated the state-controlled rationing system for a long time. But marketplaces have gradually increased since the mid-1990s as North Koreans had to find sources of survival following a severe famine and economic hardship, widely known as the "Arduous March."
In a recent annual audit session, South Korea's spy agency told lawmakers that around 380 markets exist across the North that help instill market capitalism in ordinary North Koreans.
Marketplaces in North Korea have expanded noticeably over the span of more than 10 years despite the North's crackdown on them in 2010, according to a recent report by Benjamin Katzeff Silberstein, a non-resident Kelly fellow at the Pacific Forum CSIS.
"This is yet another indication among many that the markets are a crucial part of the North Korean economy, and the fact that they have grown in many cities would seem to imply that their importance is growing," the report said.
It said that larger markets were spotted in North Korea's southern areas and western port cities, such as Nampo and Haeju, citing the growth of domestic agriculture and trade via sea routes.
Despite the North's market crackdowns, the number and types of products on sale in marketplaces have consistently risen, the analysts said.
Food, clothes, cosmetics and luxury items are being traded in marketplaces, according to North Korean defectors. Even delivery services have emerged as mobile phone use has increased, they said.
Around 77 percent of 146 North Korean defectors said that they had an experience selling products in marketplaces in North Korea, according to a poll conducted by the Seoul National University Institute for Peace and Unification Studies.
"The North is facing difficulty in controlling the situation as a harsh crackdown could invite public backlash," said Jung Kwang-sung, 26, who defected to South Korea in 2006. "I believe that the growth of the markets will lead the North to move toward reform and liberalization."
The analysts said that if the North abandons its nuke program, there are many ways for South Korea to revitalize the domestic markets in North Korea, citing the provision of microfinance services and the establishment of a joint venture.
Microfinance refers to offering small loans to people with low credit and little access to commercial banks. It gained global attention after 2006 Nobel Peace Prize winner Muhammad Yunus' operation of Grameen Bank in Bangladesh.
"There are many cases in China and other nations proving that the market economy thrives when the number of self-employed people rises," said Lim Eul-chul, a professor at the Institute for Far East Studies.
He suggested that a joint venture that utilizes the North's cheap labor and the South's finances be established.
But it won't be easy for such a rosy vision to materialize as there is no sign that North Korea will change its attitude over its nuclear arsenal any time soon, the analysts said.
Last week, a private expert on a presidential committee on unification preparation floated an idea of promoting inter-Korean economic cooperation by tapping the North's domestic industries.
But Cheong Wa Dae said later that the government has not studied such a possibility, adding it does not plan to lift or ease Seoul's sanctions on Pyongyang that were imposed following the deadly sinking of a warship in 2010.
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