How to Make it in North Korea

Sunday March 11, 2018 Written by Andrew Mueller


Decades after the end of the Cold War, North Korea is the last unregenerate communist tyranny still standing.

Today the rogue nation is, essentially, a nation-sized equivalent of Lieutenant Hiroo Onoda, the Japanese Army officer stationed on the Filipino island of Lubang, who famously waged World War II until 1974, sticking obdurately at his post, perplexing onlookers with his refusal to get with the program, and enraging his neighbours by taking the occasional pot shot.

Around the world, it has become conventional to think of North Korea as belligerent, paranoid and insular. This is perfectly fair enough: North Korea is belligerent, paranoid and insular. But it is not altogether impermeable by the capitalist world – and not entirely uninterested in it. The official rhetoric remains dogmatically rigid, and bracingly shrill: a recent and typical editorial in the country’s official newspaper bore the headline “Let Us Wage Vigorous Struggle For Final Victory In Building Socialist Power”. But just quietly, an entrepreneurial culture is budding in North Korea – and, just as quietly, the regime is not merely permitting it, but encouraging it.

620x456 1

The story of North Korean capitalism begins back in the 1990s, when the country’s formal state economy more or less collapsed. By the best guesses of the U.S., between five and 10 percent of North Koreans died in the ensuing famine. During this time, the people had no choice but to fend for themselves, and the regime had little choice but to let them.

The illicit emporia that sprang up during these years were known as ‘frog markets’, so called for the way retailers would array their wares on a blanket, which they could gather up and hop off with if police arrived. Eventually, these markets expanded to the point where more or less anything was available, once you knew where to look. One former Western diplomat who lived in Pyongyang recalls sourcing an obscure electrical component from a stall that purported to deal in fish. The authorities tried to close the markets down in 2009, which proved sufficiently unpopular to provoke riots. By way of assuaging outraged public opinion, the minister responsible, Pak Nam-gi, was executed by firing squad, officially damned as “a son of a bourgeois conspiring to infiltrate the ranks of revolutionaries to destroy the national economy.”

While the enterprising spirit required to start a black market has waxed and waned over the years, the county has nevertheless had plenty of experience with the nuts and bolts of industry. In its decades of isolation, North Korea has developed a vast range of homegrown goods, including vehicles and electronics. It would be both naïve and patronising to suggest that many of them would do any better on the open market than the produce of previous communist regimes – P.J. O’Rourke was right when he suggested the Berlin Wall fell because “nobody wanted to wear Bulgarian shoes” – but the packaging often offers something, at least, for the aficionado of the camp, cartoonish menace that characterises the socialist realist school of graphic design, now largely extinct outside North Korea except for some especially insufferable coffee shops.

It has occasionally been possible, then, to start a business in North Korea, although both entrepreneurs and state officials were traditionally required to pretend no such capitalist heresy was occurring. In recent years, though, the endeavour has started to have the whiff of legitimacy about it, as a burgeoning class of marketeer known as the donju, or ‘lords of money’, has risen out of the ashes of the state-run economy. Unlike in the ’90s, the cash-strapped government is now more or less on board with a bit of small-scale free-marketism – just so long as you don’t call what they’re doing capitalism. Kim Jong-un, it seems, is happy for the donju to prosper if it means his socialist regime will too.

Of course, wanting a vibrant free-market economy and having one are two different things, and here North Korea finds itself at a particular disadvantage. Transforming a citizen into a successful entrepreneur takes more than government approval; it takes a whole swathe of attributes – many intangible, such as an appetite for risk and the ability to read the market. Thankfully, North Korea’s donju aren’t alone. For a few years now, a non-profit called Choson Exchange has been taking delegations of foreign businessfolk into North Korea to impart their wisdom to the people. Established in 2009 by Singaporean businessman Geoffrey See, Choson claims to act without ideological agenda, which is true enough, unless you view entrepreneurship as an engine of prosperity, and the pursuit of prosperity as a political goal.

620x456 2

The idea for Choson took hold in 2007, when See took a trip to North Korea. The young consultant was surprised when his female tour guide mentioned she wanted to be a businesswoman, to prove that North Korean women could make good leaders. “I didn’t realise people there were interested in business,” he later told reporters. He was also taken by the strength of her personal aspiration, “which is what drives entrepreneurs everywhere”. Before See left, the tour guide asked if he would return to North Korea with an economics textbook for her. “I thought, there are small things we can do to make a huge difference to people that don’t have access to that knowledge.”

Back in Singapore, See got to work sketching out the idea for a non-profit that would bring entrepreneurial skills to the Hermit Kingdom. Since then, the organisation he launched has trained more than 1,600 North Koreans in the basics of business and economics. All of Choson’s seminars are run by volunteers – indeed, delegates pay for the privilege – who run workshops in Pyongyang, Pyongsong, Wonsan and Rason, instructing North Koreans interested in such sectors as retail, tourism, finance and hospitality. A select few North Koreans are also allowed to travel to Singapore to study for mini-MBAs.

For a people raised on the idea that capitalism is evil, the North Koreans have taken to Choson’s teachings enthusiastically. “The people who come to the workshops are well aware of their isolation,” says Ian Bennett, a London-based consultant for Choson Exchange, who has made 10 visits to North Korea. “They understand that business is done differently in other countries, and they’re very curious.”

Choson tries to secure experts who’ve actually built businesses, rather than merely instructed others in how to do it. “We try to get them to think about all the aspects of a new idea,” Bennett says. “To start small and grow from there.” The knowledge transfer is not purely in business skills, either. “For many participants, we will be the first foreigners they have ever met. And for most workshop leaders, the participants are the first North Koreans they have ever met. There’s a lot of relationship building and challenging of preconceptions. Turns out we aren’t all crazy imperialists, and they aren’t robots either. Who knew?”

Bennett acknowledges that little contact with foreigners in North Korea occurs without official sanction – and, as such, that those given permission to attend Choson Exchange’s seminars will be, broadly speaking, citizens of whom the regime approves. Still, he maintains the work they do is worth it. “It’s that ethical argument of, if you can’t help everyone, does that mean you shouldn’t help anyone? And they’re really not all children of elite party members. A lot are from pretty prosaic backgrounds, and we get everyone from recent graduates up to people in their 60s.”

Tact is sometimes called for when assessing the concepts brought to the workshops. “About a year ago we were getting disconsolate,” Bennett says. “A lot of the ideas we were hearing weren’t really grounded in reality.” He recalls one participant who wanted to prototype a suitcase-sized box he claimed could absorb solar energy in the summer months and released it throughout the winter, keeping your house warm. “I’m no expert in thermodynamics,” Bennett quips, “but if that works I feel like we should probably be giving Elon Musk a call.” Interestingly, in 2017 things started to change for the better. “With sanctions as tight as they’ve ever been, we’ve seen much more of a focus on the domestic market – North Korean-made products for North Korean consumers.”

Bennett cites, by way of example, a workshop attendee who developed a surge protector to fortify household appliances against the caprices of Pyongyang’s power supply. He is now selling them for the equivalent of about $17 each. Solar-powered inventions are also a recurring theme – to be expected in a reliably sunny country with unreliable electricity. There have also been pitches for apps for North Korea’s limited and state-controlled intranet. Other products proposed include cosmetics, herbal extracts and tonics – though some of these might struggle to get past the regulators of other countries. Try, for example, “wintermushroom” capsules: according to their proprietor they can make children who eat them taller and smarter.

Questionable health tonics aside, the very act of discussing business ideas can be beneficial, even if individual products never see the light of day. “The North Koreans we meet are just so keen to learn about the outside world,” Bennett says. “There are so many things you would take for granted that they would know, but they don’t. On a practical level, the main gap is the tendency towards big designs which will be glorious if successful, but could be equally inglorious failures if the market doesn’t react well.” The former Western diplomat agrees. “North Koreans understand the free market pretty quickly,” he says. “But their understanding of the political context around the free market can be shaky. They don’t believe Western rhetoric about democracy, for example – they think it has the same relationship to Western reality as North Korean propaganda does to North Korean reality. They think it’s just something people say because they have to.”

It’s this last idea that some eager Western politicians hope to change. Though Choson remains steadfastly apolitical, helping North Korean small businesses could ultimately prove useful for the West’s foreign-policy ambitions. America’s economic and military threats have so far produced an outcome approximately opposite to that which they might have desired – just as the blockade of Cuba kept Fidel Castro in power for half a century. Perhaps the freer exchange of goods in camp, social-realist packaging will help. After all, the reason tyrannies fear the open market is that they know they would not long survive in it.


A version of this article appears in Smith Journal volume 26.  Buy a copy from our online shop, or find your local stockist.

All images courtesy of the book Made in North Korea: Graphics From Everyday Life in the DPRK, published by Phaidon.