North Korea’s capital – Pyongyang
How North Korea Makes Money ?. About a three-hour drive from North Korea’s capital, Pyongyang, lies what might be the world’s most isolated ski resort. Masik Pass offers 11 runs and 4 lifts, plus a gear rental shop. The attached luxury hotel features 120 rooms, complete with a swimming pool, sauna, bar, and karaoke room. Snowmobiles were imported from China and chairlifts from Austria. After a Swiss company refused to sell them, which North Korea called a “serious human rights abuse”. The resort has four and a half stars on TripAdvisor from genuine, happy tourists. The majority of its visitors, however, come from within North Korea. While the country is almost exclusively portrayed as a poor, starved relic of the past. Recent reports from defectors have begun to paint a much more nuanced picture. In reality, Pyongyang cafes are filled with patrons reading from tablets. And teenagers making phone calls, some driving BMWs and Mercedes. This was just one of the sources “How North Korea Makes Money”. Now move to 2nd
Give us Money or Face a Giant Nuclear explosion.
The key to understanding who is really in charge, whether a revolution will ever occur. And what daily life is like is to see how North Korea – both the state. And the people within it – make money. After Swiss cheese, bad haircuts, and empty buildings. But “How North Korea Makes Money”. North Korea is best known for seemingly wanting to end the human race in a giant nuclear explosion. When Kim Jong-Un finds his country unusually hungry or one of his yachts. In need of repairs, the country turns into that annoying kid on the playground. Who will not shut up until you share your Hot Cheetos?
The Déjà Vu Concept
Inevitably, the U.S. sees no choice but to respond, agreeing to ease sanctions. Or grant food aid in exchange for a return to normalcy. Now, with their mouths freshly fed, Kim and his compatriots will suddenly turn. From murderous dictators to charming, levelheaded, although, admittedly, stylistically eccentric… diplomats. Then, 6, 12, 18 months later, like clockwork, we’ll all have Déjà Vu. But “How North Korea Makes Money”. while Kim’s seeming obsession with nuclear toys attracts nearly all the media attention. In reality, it’s just one of many strategies the world’s most secretive regime has for accomplishing its goal: staying alive. The fundamental challenge for North Korea is that it cannot truly, verifiably. And permanently give up its nuclear capabilities without becoming, at best, irrelevant.
At the same time, it cannot truly thrive with the level of international sanctions. That come with threatening to sink an entire U.S.state.
Democratic People’s Republic of Korea
“How North Korea Makes Money”. Before founding the Democratic People’s Republic of Korea, Kim Il-Sung was an unlikely leader. Having fought alongside Chinese communists and later in the Soviet army. The first Kim was well prepared, militarily, but lacked the more soft skills considered necessary to oversee a communist republic. His education was poor, Korean mediocre, and understanding of Marxist theory deemed insufficient. Soviet advisors drafted North Korea’s constitution and approved all of its major speeches in advance. Making it a near-perfect puppet-state, or, in gentler terms, a “Soviet Satellite Regime”.
A “Soviet Satellite Regime”
By the end of the Korean War, Kim Il-Sung had become a national hero. And icon – praise which fueled grander ambitions. His devotion to socialism soon morphed into a strong sense of nationalism. A desire to be more than Moscow or Beijing’s puppet. Many Soviet officers were purged from government positions. And for several decades, North Korea intentionally positioned itself between the Soviet Union and China. Realizing it could pay them off each other. Whatever Moscow gave or promised, Beijing was sure to match, and then some, and vice versa. This dynamic of reluctant support has more or less continued to this day. Conventional wisdom portrays China as North Korea’s only ally or even puppet-state.
No more a true puppet-state
The reality is North Korea hasn’t been a true puppet-state for many decades, and with China, it has less a marriage and more an opportunistic relationship. China’s strategic interests overlap with North Korea’s continued existence, not necessarily success or prosperity. At a base level, what Beijing wants is nothing- stability. Even worse would be the accompanying advance of American forces on China’s doorstep. The North, in other words, acts as a nice buffer from U.S. troops stationed in the South. As long as the North doesn’t push tensions too high, China is happy more or less maintaining the status quo.
Relations with China
Ideally, it would like to see Kim Jong-Unfollow its example of economic reform and opening up, making it less dependent on nuclear threats for survival, and potentially justifying a retreat by American forces. China is indeed North Korea’s largest trade partner, by a mile, but it’s easy to overstate the leverage from trade with a country whose propaganda can offset almost any internal challenge. In simple terms, Beijing could destroy NorthKorea – militarily or economically. What it lacks is the fine-grained ability to influence it. And because China wants stability first and foremost, it has no reason, currently, to use its blunt weapon, leaving it with limited leverage.
When Kim met with Xi Jinping
So while there exists a clear power dynamic between the two nations, neither is likely to do anything too dramatic. When Kim met with Xi Jinping in 2018, the supreme leader was seen obediently taking notes while the Chinese president spoke. China has historically condemned its missile tests and voted in favor of UN sanctions. And yet Xi recently made the first visit to Pyongyang by a Chinese leader in 14 years. North Korea, for its part, understands the need to, at a minimum, not anger the closest thing it has to a friend. It’s all too familiar with the cost of losing an ally.
No more public Distribution System – PDS
After the collapse of the Soviet Union in1991, North Korea suffered a devastating famine which ultimately killed somewhere between 200,000 and three million people. Farmers surrender their harvest to the government, who then allocated it amongst the population. This model worked well during the 50s, 60s, and 70s, even making Chinese towns on the border jealous. In the 80s and 90s, however, the system came violently crashing down. 450 grams of food rations per day in 1994became 128 grams by 1997.
Soon only six percent of the population receive any food from the government who promised to feed it. This, arguably, was the most pivotal moment in the nation’s history, alongside the deaths of its first two leaders. The PDS has never fully recovered, leaving most of its 25 million people to fend for themselves.
Effects of famine elevated illegal chores
Officially, Capitalism doesn’t exist here- private property and trade are both highly illegal. In practice, however, it can be seen everywhere- from those in poverty to the highest levels of the regime. Married women can register as full-time housewives rather than work an official job – giving them the freedom to start a private enterprise. Ironically, because of this, women’s rights are surprisingly strong in North Korea, where they tend to make many multiples of their husband’s income.
As expected, the government is aware of this illegal activity and could, in theory, eliminate it. But having never recovered from a now-three decade-old famine, most of the population has come to depend on private markets for basic survival.
What was the “August 3rd Rule”
The poor simply wish to get by and the rich only seek a more luxurious life – not an end to the regime. So the state simultaneously manages markets through selective enforcement and also sometimes even encourages it. The “August 3rd Rule”, for example, allows one to pay a fee and be exempted from official work – essentially profiting from instead of cracking down on private enterprise. Still, there are limits. This taught North Koreans not to trust their currency.
North Korea is two very different countries
So, today, most unofficial transactions involve a foreign currency – usually the Chinese Yuan. And just as individuals resort to Capitalism- so do government committees and departments. Anyone with any authority, therefore, is likely to use their influence to start a business, sometimes using the national military as workers. Those who bribe the right people and play the game well can become fabulously rich – even by international standards. These newly-wealthy families drive luxury cars, own cell phones, and eat Western food in Pyongyang, which some jokingly refer to as the “Dubai” of North Korea.
Reason for survival = Relative self-sufficiency
The North Korea of tall buildings and bright lights you see in tours and pictures, and the one, only minutes away, of sprawling fields and flickering, if any, electricity. The famous monument to socialism and the private shops selling Western clothes only blocks away. And, finally, an unwavering ally, on the surface, who, in reality, is, at best, ambivalent. For now, the system works. Inevitably, though, someday in the future, like the Soviet-era machines on which its factories run, North Korea will simply stop working – for any number of potentially trivial reasons. In truth, it’s remarkable how long it has worked.
For all of its strangeness, the genius of North Korea, the reason for its survival – is its relative self-sufficiency. It knows how little say a small nation like itself has in the larger world.