Buy North Korean: the country’s push for more domestic goods on store shelves
A hungry Pyongyang worker going home at the end of a long day can visit the shop, pick up a package of instant ramen, some candy for dessert, and wash it down with a bottle of beer – all made in North Korea.
By most accounts, the beer is good. “A very drinkable lager,” said one frequent visitor to the hermit kingdom. “Exceptional,” said another. The magazine The Economist caused a minor furore on the Korean peninsula a few years ago when it claimed, “Brewing remains just about the only useful activity at which North Korea beats the South.”
The beer and other goods have been part of a deliberate push by the government, say experts, to increase the number of consumer goods on North Korean store shelves, and to decrease their reliance on Chinese products.
This is a relatively recent change, according to Jean Lee, former Pyongyang bureau chief for the Associated Press and a global fellow at the Woodrow Wilson International Center for Scholars.
“Generally speaking, during the Kim Jong Il era, there were very few shops and very few products.”
Shopping a decade ago was a very Soviet-style experience, she said. You went to the counter and told the person what you wanted. Then you got a little paper slip that you would bring to the cash. You paid at the cash, then took the slip back to the counter and you’d receive your item.
That began to change right around the time of Kim Jong Il’s death, she said. “One of the last things he did before he passed away in 2011 was to go shopping. The last place that he was shown in state media was at a shopping centre.” Improving the economy and the shopping experience was, in a way, part of his succession plan.
“If you’re going to pass leadership on to a son that nobody knows, you’ve got to make sure certain things are in place. And one of the priorities for him was to make sure there was an improvement in the economy.”
At a new Western- or Chinese-style department store that opened shortly after Kim Jong Il’s death, at first, there were mostly Chinese products, she said. “When I went back to that same supermarket this past May, in May 2017, it was bustling and there were so many more North Korean products on the shelves. There’s been a huge jump in terms of the production of consumer goods in North Korea under Kim Jong Un.”
In recent visits, she’s seen domestically-produced notebooks, packaged foods, blankets, watches, purses and many other such goods.
Buy North Korean
“Kim Jong Un very explicitly about four years ago started talking about import substitution as a development strategy,” said Andray Abrahamian, associate director of research for Choson Exchange – a group that trains North Korean entrepreneurs. The regime was trying to find “products that could be made in Korea to substitute for things that were being imported from China,” he said.
Although North Korea doesn’t publish trade statistics publicly, most estimates suggest that China accounts for approximately 90 per cent of its trade, and most consumer products in the country are still Chinese.
But in an effort to change this, North Korea began to identify things it could make at home, like processed snack foods and basic textiles, and started making them domestically, particularly in the last four or five years. “Really, the shelves are packed with these products now,” he said.
While North Korea remains a very poor country, it’s not just Pyongyang’s elite who can afford to shop, said Lee. “There are quite a number of very basic household items that are very affordable.”
The quality might be lower, and most people outside the capital wouldn’t be able to afford a set of face creams from the Pyongyang Cosmetics Factory, but many people can still buy a few things. “There are definitely different levels in terms of the quality of goods just as there is in any other country,” she said, with prices to match.
The idea, at least as expressed through North Korean propaganda, was to improve people’s lives, she said.
“If you have more factories operating, producing more goods, you’ve got more people working and you’ve got more money flowing through the economy. And people are happier because they’ve got more stuff.”
This is partly designed to “inspire a sense of loyalty” to Kim Jong Un, she said.
North Korea’s economy seems to be growing. Its GDP grew at a rate of 3.9 per cent between 2015 and 2016, according to estimates from the Bank of Korea, although its per capita gross national income remains a tiny fraction of its southern neighbour’s.
Satellite images also show more public markets springing up, said Curtis Melvin, a researcher at the US-Korea Institute. He’s identified over 480 official markets. “A couple of dozen of those have been built since Kim Jong Un took over and well over 100 others have been renovated and expanded since Kim Jong Un took over.”
Lee isn’t sure how much this consumer growth has helped ordinary people though. “I don’t know about the average North Korean. I would say the lives of the elites have certainly gotten better.”
With the United Nations imposing ever more punishing sanctions on North Korea though, it’s hard to say how long the shelves will remain stocked.
“We’ll have to see whether the latest rounds of sanctions both from the UN and bilateral sanctions imposed by individual countries will take their toll on the daily lives of North Koreans. Because they certainly, if enforced, have the potential to really impact their lives,” said Lee.
Abrahamian thinks sanctions might in some ways help out North Korean businesses as cautious consumers attempt to stretch their money. “That may actually end up boosting the market for locally-produced goods. They tend to be a little bit cheaper than Chinese imports and now, people are more budget-conscious than ever.”
Lee isn’t sure since the raw materials for a lot of business ventures are still imported from China. “They’re going to suffer from shorter supplies due to these UN sanctions, if these sanctions are enforced.”
— With files from Reuters
© 2018 Global News, a division of Corus Entertainment Inc.