North Korea Tightens State Control Over Economy and Suppresses Private Entrepreneurship
In early August, the regime of North Korean leader Kim Jong-un issued a proclamation aimed at tightening state control over economic activities. The edict bans the use of foreign currency and mandates that all distribution of goods must be managed by the state. The directive also introduces severe penalties, including execution, for violators. The proclamation was reportedly disseminated during neighborhood watch unit meetings and outlines specific regulations for commerce, including requiring retailers and wholesalers to register with "commerce management bureaus" and only allowing sales through state-owned distribution networks.
The regulations go beyond just economic control. They seek to discourage private entrepreneurship by labeling the act of hiring someone else as an "anti-socialist act" that will be "strictly suppressed." These rules underscore the North Korean government's commitment to consolidating state power over private business. Notably, commerce management bureaus and market management offices are being established as part of local governance structures to oversee this newly enforced system. These bureaus are responsible for controlling the circulation of consumer goods within state-run markets.
This shift toward increased state control has historical roots. Since 2019, the North Korean regime has been stepping up efforts to crack down on private economic activities. In April 2021, the government ramped up controls, even forcing privately-run restaurants to close. These bans follow an overarching policy push to "intensify socialism," as was emphasized during the Eight Party Congress held in January of that year. The measures significantly impacted the livelihoods of urban dwellers, with some reports indicating that vulnerable communities faced starvation and disease as a result of lost income.
In terms of enforcement, the regime has not hesitated to exercise extreme measures. For example, nine people were publicly executed in Hyesan, Yanggang Province, in late August for distributing meat from a state-owned cow. Though it's not clear if these executions were directly related to the new proclamation, the act serves as a grim warning to those contemplating violations of the government’s new economic policies.
The economic impact of the proclamation is already being felt in local markets. Reports from Yanggang Province indicate that street sellers are now required to register their activities and pay daily market fees, ranging from KPW 250 to 500. These fees seem designed to fill state coffers while curtailing the entrepreneurial activities of ordinary citizens. The authorities are reportedly conducting several checks per day to ensure compliance, and unregistered sellers face the confiscation of their entire stock.
[Source: Assia Press]
