{"id":3665,"date":"2014-12-07T23:24:54","date_gmt":"2014-12-07T23:24:54","guid":{"rendered":"http:\/\/www.rationalargumentator.com\/index\/?p=3665"},"modified":"2014-12-07T23:25:27","modified_gmt":"2014-12-07T23:25:27","slug":"merchant-kingdom","status":"publish","type":"post","link":"https:\/\/www.rationalargumentator.com\/index\/blog\/2014\/12\/merchant-kingdom\/","title":{"rendered":"North Korea: From Hermit Kingdom to Merchant Kingdom? – Article by J. Wiltz"},"content":{"rendered":"
\n
\"The<\/div>\n<\/div>\n
J. Wiltz
\n<\/big><\/big><\/strong><\/span><\/div>\n
December 7, 2014<\/span>
\n<\/strong><\/div>\n
******************************<\/div>\n
\n

Toward the end of her remarkable speech<\/a> at this year\u2019s One Young World Summit in Dublin, North Korean defector and human rights activist Yeon-mi Park listed three ways in which ordinary people can help freedom-seekers in North Korea:<\/p>\n

\n

One, educate yourself so you can raise awareness about the human crisis in North Korea. Two, help and support North Korean refugees who are trying to escape to freedom. Three, petition China to stop repatriation.<\/p>\n<\/blockquote>\n

To this list, Swiss-born businessman Felix Abt might add a fourth suggestion: do business with them. This suggestion forms the heart of Abt\u2019s new book, A Capitalist in North Korea: My Seven Years in the Hermit Kingdom<\/em><\/a> (Tuttle Publishing 2014).<\/p>\n

From Hermit Kingdom to Merchant Kingdom<\/strong><\/h4>\n

 <\/p>\n

Those familiar with the situation in North Korea (officially known as the Democratic People\u2019s Republic of Korea or DPRK) will not find Abt\u2019s title as shocking as it\u2019s probably intended to be. Indeed, as early as 2009, and undoubtedly even before that, Western media outlets were reporting on \u201cthe secret capitalist economy of North Korea<\/a>\u201d (i.e., the black market) which sprung up in response to the famine of the mid-1990s. Writing for the Washington Post<\/em><\/a> in May 2014, Yeon-mi Park herself even referred to the young people currently living in North Korea as the \u201cJangmadang<\/em>, or \u2018Black Market Generation\u2019.\u201d<\/em> \u00a0These young people, she says, are far more individualistic than their predecessors, far less loyal to the ruling Kim regime, and infinitely more likely to be exposed to outside media and information.<\/p>\n

Abt\u2019s book echoes and elaborates on all of these points. Drawing on his personal experience as the foreign head of a North Korean pharmaceutical company, as well as a co-founder of the Pyongyang Business School, he details the DPRK\u2019s early forays into franchising, customer service, online forums(!), bicycle merchants, performance incentives, and even that most un-socialist of all market activities, advertising.<\/p>\n

These ideas and practices are still very new to the world\u2019s most notorious \u201cbastion of communism\u201d (Abt\u2019s words), but already the government is being forced to make gradual changes to its market policies. Two quick examples: \u201cMore flexible opening hours are allowed for markets, and more companies are permitted to interact with businesses abroad.\u201d<\/p>\n

In spite of these positive developments, however, Abt laments, \u201cThere appears to be no end in sight for the severe economic problems of the world\u2019s most centrally planned economy.\u201d He divides the blame for these problems among several perpetrators: (1) North Korean military policy; (2) over-dependence on foreign humanitarian aid; and (3) foreign sanctions and embargoes.<\/p>\n

\u201cNorth Korea,\u201d says Abt, \u201cis the most heavily sanctioned nation in the world<\/a>, and no other people have had to deal with the massive quarantines that Western and Asian powers have enclosed around its economy.\u201d<\/p>\n

Two Steps Forward, One Step Back<\/strong><\/h4>\n

 <\/p>\n

To be sure, arguments against North Korean sanctions are a tough sell, given the country\u2019s well-documented human rights abuses and annual nuclear threats against the United States and South Korea. Several Amazon reviewers have accused Abt of simply parroting North Korean propaganda, calling him \u201cPyongyang Pete\u201d and \u201cthe Kim Dynasty\u2019s useful idiot.\u201d \u00a0Even many libertarians, long opposed to the Cuban embargo<\/a>, can probably agree that many of North Korea\u2019s domestic and international woes are self-inflicted.<\/p>\n

For example, in 2006, the former president of South Korea\u2019s largest dairy company came up with the strategy to provide every child in North Korea a daily glass of milk. \u201cCharities and wealthy individuals committed to the project,\u201d Abt writes, \u201cbut after Kim Jong Il\u2019s first nuclear test, the prospect quickly vanished.\u201d<\/p>\n

Abt also notes that in 2007, the website DailyNK<\/a> reported that North Korea spends up to 40 percent of its annual budget on monuments and celebrations dedicated to the Kim regime. Abt recounts how he \u201cgasped\u201d at the sheer size of these monuments, as well as other buildings like the Koryo Hotel where \u201cup to 1000 guests can stay in 504 rooms on 45 floors.\u201d<\/p>\n

But read to the end of A Capitalist in North Korea<\/em> and you\u2019ll find that \u201cfewer than a third of all hotel rooms are occupied during most weeks.\u201d Pyongyang tourist videos<\/a> on YouTube corroborate this point. On almost every day of any given year, the 504 rooms of the Koryo Hotel sit empty (a predictable side effect of the DPRK\u2019s notoriously tight travel restrictions). This is not what an efficient allocation of resources looks like.<\/p>\n

Moreover, the North Korean government sometimes reacts to the market activities of its foreign investors with repression and cronyism. In 2006, a Chinese-run pharmacy was closed because it posed a threat to the socialist public health system. Several years later, a German internet provider was able to lobby the government, making it impossible for other foreign-invested businesses to install their own satellite dishes.<\/p>\n

\u201cSo how will reform come about?\u201d<\/strong><\/h4>\n

 <\/p>\n

And yet, not one of these things \u2014 not the nuclear tests, the empty hotels, or the shady business dealings \u2014 could in any way be prevented by sanctions that target foreign banks, farm equipment, fertilizer, mobile phones, alcoholic drinks, French cheese, or luxury items. \u201cThe current sanctions have not only failed to curtail the nuclear ambitions and human rights abuses of the ambitious North Korean leader,\u201d says Emma Campbell in a May 2013 article for East Asia Forum<\/a>, \u201cthey are also constraining the actions of humanitarian NGOs trying to carry out life-saving activities inside the DPRK.\u201d<\/p>\n

Among these life-saving activities is the development of a market-minded merchant class that is less dependent on the regime and better able to conduct business with the outside world in a peaceful, profitable manner. While Abt is clear that doing business in North Korea is by no means a guaranteed success, he rightly sees it as one of the best methods for improving the lives of millions of North Koreans caught between domestic and foreign repression. \u201cBusiness,\u201d he writes, \u201cis the way forward for Kim\u2019s country \u2026 a promising way to open and change the hitherto isolated country and the course of things for the better.\u201d<\/p>\n

The decades-long task of opening North Korea to the outside world may very well be accomplished by first opening the outside world to North Korea.<\/p>\n

J.\u00a0Wiltz\u00a0writes from Anyang, South Korea, where he teaches English and blogs at A Day with J.<\/a><\/strong><\/p>\n

This article was published on Mises.org<\/a> and may be freely distributed, subject to a Creative Commons Attribution United States License<\/a>, which requires that credit be given to the author.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

J. Wiltz December 7, 2014 ****************************** Toward the end of her remarkable speech at this year\u2019s One Young World Summit in Dublin, North Korean defector and human rights activist Yeon-mi Park listed three ways in which ordinary people can help freedom-seekers in North Korea: One, educate yourself so you can raise awareness about the human crisis in North Korea. Two, help and support North Korean refugees who are trying to escape to freedom. Three, petition China to stop repatriation. To…<\/p>\n

Read More Read More<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[419,5],"tags":[1448,710,3760,18,3759,3758,3761,1364,2543,13,1363,3762],"class_list":["post-3665","post","type-post","status-publish","format-standard","hentry","category-business-2","category-politics","tag-black-market","tag-communism","tag-dprk","tag-economy","tag-felix-abt","tag-j-wiltz","tag-kim-jong-un","tag-market-economy","tag-north-korea","tag-sanctions","tag-socialism","tag-yeon-mi-park"],"_links":{"self":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/3665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/comments?post=3665"}],"version-history":[{"count":2,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/3665\/revisions"}],"predecessor-version":[{"id":3667,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/3665\/revisions\/3667"}],"wp:attachment":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/media?parent=3665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/categories?post=3665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/tags?post=3665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}