SEOUL — Mrs Choi, a North Korean housewife, calculated that a DVD player would cost her 15 rabbits. DVD players are worth the expense, she reasoned, as they allow people in the closed authoritarian state to watch contraband films, music videos and soap operas from South Korea, India and China.
Mrs Choi, a 43-year-old who fled to the South in 2009, recalled that her machine cost 150,000 won, then about $45. She was unconcerned, she said, that the cost was 75 times her official state salary. She was sanguine because the real North Korean economy as described by recent defectors now centers on markets — called jangmadang — that are increasingly fueled by income from mountainside allotments and kitchen gardens like Mrs Choi’s.
“The thing you fear most is the midnight thief,” Mrs Choi said, as she described the well-fenced paddock around her tile-roofed home in the northern province of Hamgyong. “You have to build pens to protect your rabbits and chickens. Many people in the street built tunnels and cellars under the kitchens to keep pigs.”
The testimony of defectors from the Chinese borderlands suggests that private agriculture is now playing a growing role in North Korea’s real economy.
The burgeoning private agriculture sector could face a test this winter amid warnings from the United Nations that the country faces heavy cereal shortfalls. The World Food Program has released video footage of malnourished children in hospitals, but South Korea says Pyongyang is exaggerating shortages to win aid.
Mrs Choi argued that the scale of personal cultivation had made people less fearful the country could slide back into the famine of the 1990s, which killed as many as 1 million people. “People now feel more resourceful and less vulnerable,” she said as she wiped tables at the Seoul restaurant where she now works.
Although 2,000 to 3,000 North Koreans come south each year, it is hard to gain access to them for the latest accounts of the situation in the North, because Seoul’s intelligence service houses and monitors the newest arrivals for several months to sift out enemy agents.
But Andrei Lankov, professor at Kookmin University in Seoul, says North Korean authorities have softened their stance towards private cultivation of land, which would once have been an anti-socialist heresy. Forestry and land registry officials now take bribes rather than cracking down on smallholdings that many defectors insist are more productive than state farms, he says.
“They will never starve again,” Lankov said, in a reference to the 1990s famine years. “If there is a really bad harvest, then China will send enough to keep North Korea just above the starvation line.”
More broadly, Lankov argues, the scale of private agriculture in the last decade does not just help poorer families gain more food but is part of a “grass-roots revival of a capitalist, market economy.” Jangmadang costs move in line with the dollar and Chinese supply, owing nothing to authoritarian state price planning.
Another defector who also fled in mid-2009 agreed that security agents patrolling markets in the North paid little attention to home-grown produce. “The only thing they really looked for at the stalls were South Korean electronic goods or clothes,” the defector said. “That was sensitive.”
Kim Jong Il, North Korea’s autocratic leader, tried and failed to rein in the free market shortly after Mrs Choi fled. The jangmadang suddenly ground to a halt for weeks in December 2009 when he attempted a bold currency reform, lopping two zeros off each banknote. Savings were seized, and defector groups say that rare public protests erupted.
Defectors argue that Kim as attempting to hobble a class of traders who were threatening the political status quo. “The authorities are trying to tame rich merchants who do not obey them,” said Lee Ae-ran, a former North Korean factory inspector.
Pyongyang can keep tabs on licensed merchant elites working in arms exports and quasi-military trading companies shipping ginseng and mushrooms, but smaller free marketeers are harder to control.
Officials at South Korea’s central bank, which monitors the North Korean currency, say that Kim failed to snuff out nascent capitalists with his currency reform. In December 2009, the price of a kilo of rice was theoretically cut from $2.40 to 2 cents. This month, the rice price was nearly $2.70, suggesting that the market has stabilized at pre-reform levels.
“It came full circle. The market set the price,” a South Korean bank official said.
Indeed, a Pyongyang-based diplomat said market activity and private agriculture appeared to have picked up nationwide in the period since the currency overhaul. “It is a striking change that people are more fascinated with earning cash,” he said. “There is a total loss of faith in the government and the public distribution system” for food.
A second Pyongyang-based diplomat said he had even seen evidence last year in the capital suggesting why authorities were avoiding a crackdown on home-grown food supplies, which are vital to the poor.
In very rarely witnessed scenes, the diplomat said, furious tenants berated state officials who wanted to demolish their apartment block’s decrepit balconies to spruce up the neighborhood.
“The balconies are like greenhouses where people grow vegetables and keep rabbits,” he said. “The officials were shocked at how hard they were going to fight to keep them.”
Kang Buseong in Seoul contributed to this report.