Think Tanks See Hope in N.Korean Capitalism

Most North Koreans now rely on open-air markets or other forms of commerce to make a living, which would allow the impoverished nation to merge with South Korea's free market economy five years after reunification, think tanks say.

No longer dependent on unreliable food rations, some 90 percent of North Koreans now derive a certain proportion of their income from market activity, the Korea Institute for International Economic Policy estimates.

The institute based its analysis on 2008 UN census data on the North.

Left: A North Korean woman buys oil at a gas station in Hamhung, South Hamgyong Province late last year; Right: North Korean workers make clothes in a garment factory in the Rajin-Sonbong special economic zone last month. Left: A North Korean woman buys oil at a gas station in Hamhung, South Hamgyong Province late last year; Right: North Korean workers make clothes in a garment factory in the Rajin-Sonbong special economic zone last month.

"Dependency on open-air markets probably increased due to a shortage of rations stemming from international sanctions and [North Korean leader] Kim Jong-un's reforms," Jeong Hyung-gon at the institute said.

And Kim Byung-yeon of the Institute for Peace and Unification Studies at Seoul National University said, "No former socialist country, including East Germany and China, were as developed as North Korea in terms of these markets."

A study of North Korean defectors by Kim's institute showed that more than 74 percent had experience selling goods in open-air markets. They derived 70 to 80 percent of their income from unofficial economic activity and spent 80 to 90 percent of their incomes buying goods in informal markets rather than state-run stores.

Cho Bong-hyun of the IBK Economic Research Institute said the emerging market economy in North Korea is now an "irreversible trend."

englishnews@chosun.com / Jan. 03, 2014 09:38 KST