North Korean Famine - Black Markets

Black Markets

At the same time, the years of famine were also marked by dramatic revival of illegal, private market activities. Smuggling across the border boomed, and up to 250,000 North Koreans moved to China. The widespread government corruption led to a near complete collapse of old controls and regulations which were not enforced any more. When fuel became scarce while demand for logistics rose, so-called servi-cha (서비차, McC-Rsr: sŏbich'a, “service cars”) operations formed, wherein an entrepreneur provides transportation to businesses, institutions and individuals without access to other means of transportation, while the car is formally owned by a legitimate enterprise or unit that also provides transportation permits. Some experts have described the process as "capitalism from below" or "natural death of North Korean Stalinism".

The average official salary in 2011 was equivalent to $2 per month while the actual monthly income seems to be around $15 because most North Koreans earn money in illegal small businesses: trade, subsistence farming, and handicrafts. The illegal economy is dominated by women because men have to attend their places of official work even though most of the factories are non-functioning.

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