The “socialist" paradise of North Korea appears to be no exception to wealth inequality. The gap between its emerging entrepreneurial class and the rest of the country widening rapidly, experts say.
The disparity stems from the North’s economic hardship in the 1990s, when its system virtually collapsed and the country suffered a disastrous famine that killed an estimated hundreds of thousands. The chaos forced citizens to rely on private markets and the regime to allow for grassroots capitalism. Speculators took advantage of the reforms by buying supplies when the economy was in relative health and selling them when demand was greatest. Opportunities for those with money increased as the North’s economy slowly rebounded despite international sanctions. The wealthiest and best connected made their money through companies that worked under the guise of being state-run, mostly through joint projects with Chinese companies or in areas such as mining and transportation. Lower-level entrepreneurs have succeeded by trading in private markets goods that come through the porous border with China.
Further entrenching the elite class is the pervasive practice of nepotism. Defectors say that high-ranking officials pull strings to place their children in jobs handling diplomatic and trade relations, areas where they position themselves to earn foreign cash and lead stable lives.
An Chan-il, a political scientist who defected from the North, says ordinary people are aware of the inequality but lack the political tools to speak out.
“On special occasions, the gifts the state gives to the people are administered according to wealth. Wealthy children go to high-ranking universities while those who don’t have rich families don’t. But most have yet to grasp that the gap is due to the political situation.”
But experts say the development is concentrated in the capital and a handful of other urban areas, namely Sinuiju, Nampo, Sariwon and Kaesong while the rest of the country faces a starkly different story.
“It’s like two different planets,” said Bernhard Seliger, a Seoul-based unification expert who periodically visits the North. “Pyongyang is modernizing but in the countryside the water supply is primitive and people still use oxcarts.”