North Korea Turns To Private Markets In Effort To Avert Second Famine

The collapse of the North Korean economy continues apace:

SEOUL — Bowing to reality, the North Korean government has lifted all restrictions on private markets — a last-resort option for a regime desperate to prevent its people from starving.

In recent weeks, according to North Korea observers and defector groups with sources in the country, Kim Jong Il’s government admitted its inability to solve the current food shortage and encouraged its people to rely on private markets for the purchase of goods. Though the policy reversal will not alter daily patterns — North Koreans have depended on such markets for more than 15 years — the latest order from Pyongyang abandons a key pillar of a central, planned economy.

With November’s currency revaluation, Kim wiped out his citizens’ personal savings and struck a blow against the private food distribution system sustaining his country. The latest policy switch, though, stands as an acknowledgment that the currency move was a failure and that only capitalist-style trading can prevent widespread famine.

“The North Korean government has tried all possible ways [for a planned economy] and failed, and it now has to resort to the last option,” said Koh Yu-hwan, professor of North Korean studies at Dongguk University in Seoul. “There’s been lots of back and forth in what the government has been willing to tolerate, and I cannot rule out the possibility of them trying to bring back restrictions on the markets. But it is hard for the government to reverse it now.”

Ironically, though, it may well be the private markets that came into being in the wake of the mid-90s famine that end up saving the North Korean people from another disaster:

In the mid-1990s, amid a total collapse of the central planned economy, somewhere between 3 and 5 percent of the population — perhaps 1 million people — died of starvation. Meanwhile, North Koreans increasingly turned to small markets for trading and buying supplies.

In part because of that, the hermit nation now maintains a stronger line of defense against starvation — one that did not exist during the famine.

Compared with the peak of the food crisis, in the mid and late ’90s, “the actual amount of food — less is available now,” said Kim Heung-gwang, a North Korean defector and president of a group called North Korea Intellectuals Solidarity. “But back then, the food circulation industry wasn’t as built up. Even though the absolute amount of food is less now than it was 15 years ago, I think the starvation problem will be less significant.”

For the sake of the people, one can only hope that this turns out to be true. However, this news does provide one possible answer to a question people have been asking for several weeks now.

What does North Korea want ?

I’m guessing food might be at the top of the list.

Photo via MSNBC depicts children at an unidentified North Korean kindergarten in 1997.

FILED UNDER: Asia, World Politics, , ,
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. The people of North Korea certainly want food.

    The leaders of North Korea want the current regime to survive, so that they don’t all end up like Ceauşescu.

  2. hiscross says:

    When will America wake up? I guess when McDonalds shuts down.Until then Barry will continue to starve America.

  3. Tigger says:

    What we have done to the North Korean people by ignoring this type of thing is criminal. The political concentration camps in this country rival the torture rooms of the Spanish Inquisition.

    What the North Korean regime has done to it’s own people is inhuman.

  4. Val says:

    Freemarkets have been saving Korea from all sorts of things, or worse versions of things they have actually suffered, for as long as they receive foreign payoffs – I mean ‘aid’.

  5. Michael Powell says:

    Wow, that picture is heartbreaking, as is the pictures of a electricty-free northern peninsula adjacent to South Korea.

  6. Greg the Electrician says:

    What Socialist System has been ever been really successfull?

    Starving people who see basic needs & goods to the South, might rebel and evacuate.

    If Truman would have let McArthur take over North Korea, things would have better for them. However, the DMZ would have been relocated to the Chinese Border.

  7. frank says:

    Once again communism reveals its true colors. Thomas Sowell was right in “Marxism”, every time it has been instituted in its pure form it has caused instant famines. A resort to limited capitalism was necessary to put down insurections by a starving populace. He concludes that communism’s positive contribution to humanity can be summed up as a resounding “ZERO”.

    It has murdered more people (100+ million) DURING PEACETIME than all of the wars of history COMBINED.

    Socialism was devised by bankers for the purpose of unjustly enriching bankers. Who is the major recipient of all this “stimulous” money. The lowly “working class” is merely an impoverished “Worker Ant” colony forced to produce wealth for its political masters. It has made Castro (and possibly the head Kim) billionairs, it works well for these people. Meanwhile the Cuban “workers” would also starve to death were it not for the black market. And they’ll shoot you if you try to leave this “worker’s paradise” (go AWOL). Ask any one of them who managed to escape.

    And THIS is what the Mao-Tse-Bama has planned for the Land of the Free and the Home of the Brave. God help us.

  8. BobPDX says:

    Very sad, heartbreaking pictures.

    God help these children.

    Under a socialist dictatorship, which is what Obama and Soros want for our country, this will also happen here.

    It has to, or they won’t get their way…

  9. memomachine says:


    “What we have done to the North Korean people by ignoring this type of thing is criminal.”

    What WE have done?

    Here’s a clue: not all tragedies under the sun is the fault of Americans.

  10. G.A.Phillips says:

    ***Under a socialist dictatorship, which is what Obama and Soros want for our country, this will also happen here.***

    I highly doubt it, but it’s gonna suck bad and for many it already does.

    It’s not easy to do that to an armed and somewhat free thinking people.

  11. World Class CRIMINALS – BURN IN HELL !

    Will be a very short trial at The Hague if we could ever get KIM into court.

    This one picture alone (of those poor kids with their ribs sticking out) would easily CONVICT that SELF-ABSORBED, BOUFFANT-HAIRED MEGALOMANIAC – Kim Jung MAKES ME ILL

  12. nono524 says:

    Are reading this Mr. Obama? Socialism doesn’t work!

  13. pj says:

    Look at the children and gaze into your future…

  14. Scott says:

    OMG… children with ribs sticking out… judgments based on emotionalism!!!

    /This sarcastic comment brought to you by the letter “S”.