The article is devoted to the changes that have taken place in North Korean society since 2002. Since the early 1990s, the old socio-political system, once modeled after the post-war USSR, has been in a state of deep crisis. In 2002, the North Korean authorities decided to implement moderate reforms, but these reforms were mainly limited to belated recognition of the socio-economic changes that had already occurred spontaneously by that time.

However, contrary to the expectations of optimists, some improvement in the economic situation that has occurred in recent years has not led to further changes. On the contrary, since 2004, the North Korean Government has consistently pursued a policy of counter-reform. Recently, the DPRK authorities have been trying to revive, at least partially, the system of social and economic relations that existed during the time of Kim Il Sung.

In the context of the political situation in North Korea, these measures of the authorities seem perfectly rational. The very existence of an economically successful South Korea means that North Korean leaders are facing a situation that is radically different from what exists in China or Vietnam. Chinese-style reforms are quite rational from an economic point of view, but extremely dangerous from a political point of view. Such reforms will inevitably increase the awareness of the North Korean population about the outside world, and especially about South Korea, and this can undermine the regime.

The article is written on the basis of reports of refugees from North Korea (both published and received during direct interviews), as well as publications of the periodical press, including small-circulation and specialized ones.

Keywords: North Korea, Democratic People's Republic of Korea (DPRK), counter-reforms, refugees from the DPRK.

Until the early 1990s. North Korea was a classic example of a centrally planned economy, and the main features of this system were even more pronounced in the DPRK than in the Soviet Union of the 1940s and 1950s. In North Korea, the card system has been comprehensive since the 1960s: almost all food and consumer goods were not sold, but distributed by the State, so that trade as such was virtually nonexistent. The area of household plots could not exceed 100 square meters. m in rural areas and 30 - 40 sq. m. in urban areas, the private sector in agriculture was virtually nonexistent. Planning was extremely tight, and participation in international trade was kept to a minimum as part of the "self-reliance"policy.

The economy of the DPRK remained afloat mainly due to direct and indirect subsidies from the countries of the socialist camp, primarily from the USSR. Although the Soviet leadership was not particularly sympathetic to Kim Il Sung's regime, it provided Pyongyang with significant economic assistance, partly as payment for it.-

page 88
The DPRK's role in the Sino-Soviet conflict is partly based on general strategic considerations. In addition to direct aid, the USSR sold oil to the DPRK at subsidized prices and agreed to unfavorable terms of barter trade.

The extreme rigidity of the regime was noticeable not only in the economic sphere: the level of daily administrative and police control over the population in the DPRK was higher than in any country of the socialist camp, with the possible exception of Albania. In order to travel outside their hometown or county, North Korean citizens are required to obtain special "travel permits", which require lengthy bureaucratic procedures. Some regions of the country, including its capital Pyongyang, are virtually closed to private travel. Every North Korean is a member of the" people's group " (inminban), which consists of 20 to 40 families living in the same house or in the same rural district [Kim Seung - chol, Park Seong-yeon, 2006, pp. 186-201]. The duties of the head of the "people's group" include monitoring everything that happens in the area. All those who stay overnight with friends or relatives must first register in the "people's group" and present the necessary documents. Several times a year, at about midnight, surprise inspections are carried out in homes, the main purpose of which is to identify people who are in the house without the appropriate permission [Kim Seung-chol, 2000, pp. 185-197].

Back in the early 1960s, the North Korean leadership realized that information isolation from the outside world is an essential condition for maintaining internal political stability. Initially, the main concern of the North Korean leadership was the influence of the Soviet Union, which then offered a much more liberal version of state socialism. However, information isolation has become particularly important since the late 1960s, when the South, previously economically backward, first caught up with the North, and then quickly began to overtake it.

To maintain this self-isolation, the Pyongyang authorities began to resort to extraordinary measures that had no analogues in the history of the socialist camp. In the DPRK, radio receivers with free tuning were banned, and all foreign publications, excluding technical ones, are available only in special countries (an exception was not made even for periodicals of "fraternal" countries). The main content of North Korean propaganda is quite predictable: it claims that the South is a poor and starving American colony, while North Korea is the richest and most progressive country in the world, a" country of exemplary socialism", a beacon and hope for all mankind.

The collapse of the socialist camp in 1989-1991 meant that Pyongyang lost vital foreign aid. Trade with the USSR declined sharply: in 1993, North Korean imports from Russia accounted for only 10% of the level of the 1980s (Haggard and Noland, 2007, p. 27). Deprived of external support, the North Korean economy found itself in a severe crisis. From 1991 to 1998, North Korea experienced an economic downturn, during which time its GDP was constantly declining [Bank of Korea..., 2008, p. 1]. The Soviet-style state economy, in which heavy industry played the main role, actually ceased to exist: by 1997, the volume of industrial production was only 46% from the level of 1990, the card system provided for the basic needs of North Korean consumers for many decades, and also ceased to function: already in 1994, cards were no longer purchased outside the cities, and since 1996, even in Pyongyang, only a few representatives of the privileged strata received food according to full standards.

In 1996, a famine broke out in the country, which became the largest humanitarian disaster in East Asia in recent decades. Accurate statistics are not available and are unlikely to become available in the foreseeable future, but even at a conservative estimate

page 89
The number of deaths from famine in 1996-1999 ranged from 600 to 900 thousand people (Haggard and Noland, 2007, p. 27).

Famine and the economic crisis have dealt a devastating blow to the entire system of administrative and police control. Although the old instructions and restrictions were usually not formally lifted, they were no longer enforced in practice. Officials, especially at the grassroots level, began to actively take bribes and ignore their duties, knowing that the state is no longer able to adequately reward their official zeal. As a result, many bans, preserved on paper, turned into fiction in practice. In particular, movement within the country has become almost free - a travel permit can be obtained by giving a bribe of several dollars (although in general, the authorities managed to maintain control over entry to Pyongyang). Numerous bans aimed at restricting the private sector have also ceased to apply.

The collapse of the state economy inevitably led to the rapid growth of the shadow economy. According to a survey conducted among North Korean refugees now living in the South, illegal income accounted for 78% of their personal budget in 1998-2003 (compared to the Soviet Union in 1964 - 1990). It was 16.3%) [Kim Byung-Yeon, Song Dongho, 2008, p. 373-374]. Of course, we should not forget that this sample is unrepresentative: the share of former traders among refugees is significantly higher than among the general population, so the real share of unofficial income for the average Korean is noticeably lower than the 78% stated in the study.1 However, it is clear that the survival of North Koreans since the early 1990s has largely depended on their activities outside the State economy. Kim Byung-yong and Song Dongho describe the situation in North Korea as follows: "Through official channels, the population receives no more than 20% of consumer goods, food and other agricultural products. This situation is in sharp contrast to the period before the 1990s, when the state distribution system played a dominant role in the economy" [Kim Byung-Yeon, Song Dongho, 2008, p. 374].

Since the mid-1990s, markets have sprung up and grown rapidly on the outskirts of North Korean cities. These markets have become not only a place of private retail trade, but also a hub of commercial enterprises of various types. Private hotels, canteens, video halls, and even private bus companies began to appear. There were also private workshops, a kind of manufactory, which produced products for sale in the markets and actively used hired labor [Lee Moo-chol, 2006, p. 187-213; Lee Soo-hyun, 2002, p. 192-200; Yang Moon-soo, 2005, p. 1-22; Haggard, Noland, 2007, p. 165-209; Lankov, Kim Seok-Hyang, 2008, p. 53-72]. In order to facilitate the transportation of goods between the provinces, merchants began renting cargo vehicles. Since trucks are owned by the state, "rent" actually means bribing those officials in charge of the truck [Yang Moon-su, 2006, p. 25-26]. In addition, a private credit system has been formed: usurers provide loans to novice merchants at a high (up to 30% per month) interest rate. The extent and scope of the changes were such that it became possible to characterize North Korea as a " post-Stalinist "and even" post-socialist " society. At the same time, changes began from below and spontaneously, not as a result of government-initiated reforms, but as a spontaneous reaction of the society itself to the new economic situation.

In the absence of structural changes, such sprouts of capitalism could not lead to a Chinese-style economic breakthrough, but they nevertheless played an important stabilizing role, mitigating the consequences of the catastrophe that befell the state sector of the economy.

1 This fact was also acknowledged by Prof. Kim Byung-yong, author of the cited article (interview with Professor Kim Byung-yong, December 28, 2008, Seoul).

page 90
An important change was the beginning of the distribution of foreign video products in the form of cassettes and DVDs. Around 2000, video recorders began to appear en masse in North Korea, and soon after, wealthy North Korean families also began to acquire DVD players, which by then had fallen sharply in price. According to Chinese customs statistics, 350,000 DVD players were imported to the DPRK by 2006 - a considerable number for a country with a population of 23 million people (statistics also do not take into account smuggling). Unlike radio receivers with free settings, DVD players and video recorders are legal in the DPRK (it is assumed, of course, that they will be used to view North Korean and other officially authorized video products). In fact, the smugglers began to import many foreign films and TV shows to the North, mainly South Korean ones. These films have had a significant impact on the perception of Koreans about the outside world, primarily about South Korea [Lee Joo-chol, 2008, pp. 245-248]. A middle-aged Korean woman who left the DPRK in 2006., two years later told the author of this article: "Probably now only children in the North still think that life in the South is bad. Everyone else knows very well that the South is doing well. " 2
Another important factor in breaking the information blockade was mass migration to China, mainly to Manchuria. In 1998 - 1999, the number of North Korean refugees in China reached a peak and was estimated at 200-250 thousand people. Most of these people were natives of the northern provinces, who went to China to escape from starvation. Some eventually made it to South Korea, but the vast majority remained in China as illegal workers. Until about 2004, the border could be crossed without any problems, so many of the refugees turned into illegal otkhodniks who alternated working in China with periodic returns home. All this was made possible by the fact that North Korean border guards either ignored their duties or willingly accepted bribes from those who wanted to cross the border (Haggard and Noland, 2006). As a result of this massive, albeit illegal migration, about half a million North Koreans have visited China over the past 15 years3. Returning to the North, these people brought with them not only money earned in China, but also stories about China's economic success and the incredible prosperity of South Korea (the South Korean presence is very noticeable in the border areas of China, where a significant part of the population is made up of ethnic Koreans).

Most of the commercial activities described above remained technically illegal, but on July 1, 2002, the Pyongyang authorities introduced a series of measures that are often described in foreign media as the "2002 reforms". The North Korean media, however, never used the word "reform". It is believed that North Korea has an impeccable economic system, which by definition does not need to be reformed, and that the very idea of "reform" (kaehyok) is being insidiously imposed on the DPRK by imperialist forces. The Nodong Sinmun newspaper wrote: "Imperialists talk about 'reform' and 'openness', which are nothing more than a reactionary plot to stop social progress and reverse the course of history" (Nodong sinmun, 2005).

Officially, the changes announced on July 1, 2002 should be called "measures to improve economic management", but in practice they are better known as "measures of the first of July" [Kang Il-chon, Kon Seong-yeon, 2003, pp. 131-146; Young Chul Chung, 2004, p. 283 - 305].

The "First of July measures" in practice included several reforms.

2 Interview on November 1, 2008, Seoul.

3 This data comes from a conversation with Kurtland Robinson, the leader of a group that has studied the North Korean diaspora in northeast China for many years, starting in the late 1990s.

page 91
First, retail prices were sharply raised. For example, for several decades, rice was "sold" on cards at a completely symbolic price - 0.08 won per kilogram. After the "measures", the price of rice increased 550-fold to 44 won per kilogram, approaching the then market price. Wages were also increased, although on a smaller scale (on average, retail prices increased 25 times in the summer of 2002, and wages increased 18 times). [Lim Gyeong-hyun, 2007, p. 290, 295-391].

Secondly, the "first of July measures" changed the management system of state-owned enterprises. The powers of directors of state-owned enterprises were expanded. In particular, they were allowed to buy and sell raw materials and products in the markets, as well as greater freedom in matters of material incentives for workers. Some experts have compared this policy to the early stages of Chinese reforms or to the experiments on the introduction of a "partially market economy" in Hungary in the 60s of the XX century [Lim Gyeong-hyun, 2007, pp. 295-391].

Third, the "first of July measures" provided for the establishment of" common markets " (chonghap sichang). This decision was erroneously described in foreign media as " lifting the ban on private trade." In fact, such a ban never existed in the DPRK: markets, albeit on a very limited scale, operated even in the 1960s, and by 2002 almost the majority of North Koreans earned money in the private sector of the economy, which was centered on markets. In fact, this meant a sharp expansion of the range of products officially allowed for sale in the markets. In particular, it was formally allowed to trade industrial goods on the markets. However, this did not lead to drastic changes, as trade in manufactured goods, despite official bans, flourished already in the 1990s. Those North Korean merchants interviewed by the author clearly agree that the" first of July measures " did not have much impact on the actual operation of markets in their home cities, and on their own commercial operations: the bans, officially lifted in 2002, had long been ignored. One former merchant remarked, "Most people in the North don't even know what' first of July measures ' are "(So Yu-seok, 2008, p. 4). 198]. In fact, the "First of July measures" meant nothing more than a belated recognition of the changes that had already taken place spontaneously in society and the economy.

The "First of July measures" were accompanied by other changes, generally aimed at partial liberalization of the economy and weakening state control over it. Around 2005, workers and employees of State-owned enterprises in some provinces began to be given small plots of land (known as "plots No. 112", according to the number of the corresponding official decree). It was assumed that, working on these sites, citizens should independently provide themselves with food for several months (analogies with suburban areas in the USSR in this case are obvious). Although the appearance of the North Korean version of "dachas" can hardly be considered a step towards turning the DPRK economy into a market economy, this measure certainly implied the expansion of private economic initiative [Ryu Kyung-won, 2008, p.116].

There were other signs of a general weakening of State control. In 2001 - 2002, mobile phones were introduced in the DPRK, and by December 2003, the number of mobile network subscribers reached 20 thousand. [Hangere sinmun, 5.12.2003, p. 4]. The mobile phone in the DPRK immediately became a sign of high status. A European diplomat in January 2008 recalled in a conversation with the author: "It seems that in 2003, many North Korean officials specifically arranged for someone to call them on their mobile phone during a meeting with a foreigner. They wanted to impress the other person by casually pulling a cell phone out of their pocket."

page 92
It is not surprising, therefore, that by 2003-2004, many - even most - foreign observers thought that North Korea was finally on the path of reforms more or less similar in principle to those in China. In those days, both in the most influential media and in academic publications, there were frequent statements that North Korea "recently adopted a policy of domestic reform and international cooperation" [Sang T Choe, Suk-Hi Kim, Hyun Jeong Cho, 2003, p. 104]. Western newspaper headlines in those years oozed optimism: "In Stalinist North Korea, markets are allowed: they have no other choice" [Wall Street Journal, 20.06.2003]; see also: "Signs of transition to a market economy in North Korea" [New York Times, 03.06.2004]; "North Korea is experimenting with the Chinese model of development" [New York Times, 28.03.2005]. As subsequent events have shown, this optimism was premature.

Since the end of 2004, the North Korean authorities have been implementing a new policy aimed at negating all the changes that have taken place in the country in the previous ten years, whether spontaneous changes from below or government-initiated changes from above. The pendulum, which had been moving towards political and economic liberalization during 1994-2004, began to move in the opposite direction, and the government, instead of continuing to reform, began to systematically try to restore the situation that existed in the DPRK during the time of Kim Il Sung. Perhaps the first sign of the beginning of counter-reforms was the ban on the use of mobile phones by private individuals introduced in May 2004 (only the top bureaucracy was allowed to keep mobile phones). [Hanguk ilbo, 2004, p. 5; Kukmin ilbo, 2004, p. 11]. Since that time, the activity of the so-called anti-socialist groups has increased. These groups consist of members of local party-State bodies and the police. They were first created back in 1992, but were not particularly active until 2004.

In August 2005, bans on private grain trading were introduced throughout the country, and rumors began to spread about the upcoming restoration of the card system [Kim Yong-jin, 2005]. These rumors were officially confirmed in October, during the lavish celebration of the 60th anniversary of the Workers ' Party of Korea, when the government announced that the card system was being fully restored. At the same time, prices in the state distribution system remained at the level of 2002 (rice, for example, costs 44 North Korean won per kilogram). Since by 2005 the market price of a kilogram of rice had already reached 800-900 won, and by 2008 it was even 2500 won, the "card" price is, as in the time of Kim Il Sung, purely symbolic [Kim Yong-jin, 2007]. The rebirth of the card system was presented as a sign of a "return to normality" (in Korean documents, the rebirth of the card system was officially described as "normalization of food distribution" - sikryan kongyp jeongsanghwa). It is possible that most North Koreans will quite agree with this definition: the card system has played a crucial role in food distribution since the late 1950s, and most North Koreans inevitably perceive the card system as the norm.

Following reports of the card system's revival, many foreign and South Korean observers expressed doubts that the event would be successful. However, by 2008, it was clear that the card system as a whole had been restored - largely, of course, due to the steady influx of foreign food aid and the overall improvement in the agricultural situation. In May 2008, the National Intelligence Service of South Korea estimated that about 60% of the North Korean population received full or near-full rations (in most cases, the full ration is 540 g per day per adult), while less privileged groups received reduced rations of approximately 300-400 g per day - and therefore we are forced to buy additional equipment.

page 93
grain on the markets [Gyeonghyang sinmun, 24.05.2008, p. 5]. This, of course, is not a complete return to Kimirsen's times, but it is clear that this situation has changed dramatically compared to the mid-1990s, when the card system was almost non-functional: according to estimates by Woo-Cummings, in 1997 only 6% of the population received food by card [Woo-Cumings, 2002, p. 34].

An attempt to impose a ban on the private grain trade, on the contrary, ended in failure. The first months that followed the restoration of the card system were marked by campaigns against grain merchants. However, by the end of 2006, rice and grain were back on the market. The police and lower-level officials ignored the instructions and did not implement the ban on grain trade (including because the merchants were always ready to buy off the inspectors and supervisors).

The ban on private grain trading was just one of the policies aimed at reducing the economic and social role of markets. After 2005, attempts to restrict and regulate trading in the markets became more intense. In the summer of 2007, in Pyongyang and some other major cities, the authorities tried to impose both price restrictions and limits on the number of goods sold by one merchant. For example, for octopus, the price was capped at 2,200 won per kilogram (significantly lower than the market price of 3,700 won). One vendor could not sell more than 15 varieties of products, and it was also forbidden to sell more than 10 kg of seafood per day (Lee Kwang-baek, 2006; Lee Sung-jin, Yang Jung-ah, 2007).

In the summer of 2008, "anti-socialist groups" actively patrolled the streets of Pyongyang, identifying people who were engaged in trade outside the designated areas. Members of the groups said that such behavior is unacceptable, as it "harms the reputation of the socialist capital and undermines the foundations of the state" [Joseon ilbo, 28.07.2008, p. 6].

In December 2006, the authorities banned able-bodied men from trading in the market, and only men who were dependents were allowed to trade. This decision meant a de facto ban on men's participation in retail private trade [Kim Yong-jin, 2006]. It was assumed that healthy men should have a "normal" job in the public sector. This decision, however, was not directly related to the task of reviving the economy, since most of the state-owned factories that have been inactive for the past decade, in principle, cannot be started up again. The refugee told the author about her relative who remained in the North: "Now they demand that he go to work, but what can be done there? The plant is not working, all the equipment has long been sold to China for scrap. Therefore, he can only come to work and sit at the factory, doing nothing." Judging by other evidence, this is quite a typical situation.

However, the 2006 ban did not have much impact on the situation in the markets, since men rarely trade in North Korea: private market trading was still mainly a female occupation in the 1990s [Kim Byung-Yeon, Song Dongho, 2008; Lankov, Kim Seok-Hyang, 2008; Lee Mi-kyung, 2006, p. 37]. Therefore, much more important are the measures taken by the authorities a year later, in December 2007, when they banned women under the age of 50 from trading in the markets [Onyr pukhan sosik, 6.12.2007, p. 2]. The ideological basis of the ban was the same: every physically healthy resident of the DPRK should work in the public sector, and the only permissible role of the private economy is as an auxiliary mechanism useful for overcoming temporary crises.

The ban on trade led to considerable indignation. The largest known protest took place in the city of Cheongjin, in the north-east of the country, in early March 2008. In this city, the authorities have achieved full compliance with the ban, while

page 94
as food cards were issued irregularly and not in full. It is reported that women who participated in the spontaneous rally shouted: "If you don't allow us to trade, give us food!" "If there is no grain [for issuing cards], then let us trade!" [Onyr pukhan sosik, 12.03.2008, p. 2-3].

In early 2008, Rimjingan, a South Korean magazine with strong ties to North Korea, reported that the WPK Central Committee issued a paper on the "problem of markets"in October 2007. This document was sent to party organizations all over the country. The document claims that markets have become sources of unrest and hotbeds of speculation ("sellers raise prices and make super-profits"). It is also noted that women of working age are mainly engaged in trade. It is mentioned that the sale of South Korean-made contraband goods is widespread in the markets and that in this way the markets help spread dangerous "fantasies about the enemy". Finally, the creation of markets outside the designated areas leads to social unrest and harms the appearance of the city. The document, quoted by Rimjingan, states that scandals and other incidents that occur in markets are secretly filmed by" enemies " and then used by them in their propaganda - an obvious reference to several real-life cases where videos secretly shot in North Korean markets were taken abroad, mainly for sale japanese TV channels.

According to the document, all these problems can be solved by strengthening control over the markets. At the same time, the document does not imply a complete closure of the markets. Kim Jong Il is quoted as saying that at this stage of North Korea's socio-economic development, the existence of markets is inevitable, but markets should be carefully monitored and their economic role should remain auxiliary [Rimjingan, pp. 83-85].

In late October and early November 2008, local authorities were informed that from January 3, 2009, the markets would be open only three days a month (on the 1st, 11th and 21st of each month). It was explained that markets were becoming unnecessary due to the improving socio-economic situation in North Korea. At the same time, it was announced that the "common markets" were becoming agricultural again, which in practice meant a formal ban on trade in manufactured goods in the markets. Finally, the ban on grain trade was once again confirmed [Onyr pukhan sosik, 6.11.2008, pp. 1-2].
Explanatory work was launched, during which the party and state assets were explained that markets generate private property elements, speculation, property stratification, distract people from working in the public sector, and create the ground for spreading harmful rumors.

However, at the last moment, the government backed out. In early January, a decree was sent out that, since it was not possible to conduct proper preparation, the introduction of measures was postponed for six months. Local media report that the idea of closing the markets met with massive resistance from officials. Part of the grassroots nomenclature is fed from the markets, and some simply understand how important markets are for the normal existence of the majority of the people [Onyr pukhan sosik, 13.01.2009, p. 2-3].

As a curious illustration of the North Korean leadership's attitude to markets, we can cite a remark made by a North Korean official at the end of October 2005, shortly after the formal announcement of the revival of the card system. When Nam Sung-wook, a well-known South Korean academic and analyst who frequently visits the DPRK, asked the official if the authorities really want to restore the card system, his North Korean interlocutor replied: "Now that we have a good harvest and large stocks of rice, why do we need to trade rice in the market at all?" [Nam Seong-wook, 2005, p. 81]. The basic idea is clear: "normal-

page 95
The "national economy" should be based on administrative distribution and rationing, and markets and retail sales are allowed only in emergency situations.

The counter-reforms of 2004-2008 were not limited to the economy. The Government tried to return to the level of control over the population that existed before the spontaneous liberalization. Campaigns against the sale and viewing of contraband films (especially South Korean ones) have never stopped, but since 2005, the authorities have been paying more attention to this problem [Han Yong-jin, 2006]. In addition, the authorities tried to restore control over the movement of people and goods inside the country. Since 2006, there have been reports of frequent baggage checks on trains, trucks and buses, and at the end of 2007, a large campaign was organized to intercept trucks with goods of private individuals [Onyr pukhan sosik, 26.12.2007, p. 2]. At about the same time, the authorities managed to enforce a ban on private bus transportation, which had flourished since the late 1990s (a typical example of the shadow economy in North Korea; private buses were registered as belonging to a state structure or joint venture) [Onyr pukhan sosik, 26.12.2007, p. 2-3]. The railway police (special patrols that accompany some trains in the DPRK) were ordered to inspect suspiciously large luggage and confiscate what is clearly intended for sale [Kwon Jong-hyun, 2007 (2)].

Controls were tightened on the border with China, which was previously not particularly difficult to cross. This led to a sharp decline in the number of North Korean refugees in China: from about 200-250 thousand people in 1998 to 30-40 thousand in 2007. [Yoon Ye-sang, 2008, p. 70; Kwon Jong-hyun, 2007(2)]. This decline was caused by many factors, including the improvement of the food situation in the North, but increased border controls also played a significant role. The "right of passage" can still be purchased: it is reported that in 2007, the average bribe for crossing the border was 500 yuan, or about $ 70. (a considerable sum by the standards of ordinary North Koreans, but quite moderate money for professional smugglers) [Tonya ilbo, 2007].

In October 2008," Anti-socialist groups " launched large-scale inspections of police and security personnel in border areas. The main purpose of these inspections was to identify officials involved in smuggling supplies from China [Onyr pukhan sosik, 29.11.2008, pp. 3-4]. This is not the first attempt to crack down on smugglers and their not disinterested patrons from among local officials. Since the end of 2007, the central authorities have been conducting a large-scale investigation of the activities of officials in the largest border city of Sinuiju, which serves as the main center of legal and illegal trade with China. It is reported that several local officials found guilty of corruption were executed, and more successful ones got off with dismissal or demotion [Onyr pukhan sosik, 27.05.2008, pp. 4-5; Kim Min-so, 2007]. A year earlier, similar inspections were carried out in the city of Hweryong, the second most important center of North Korean-Chinese trade [Tonya ilbo, 26.02.2007].

Thus, contrary to the expectations of optimists, the gradual and largely spontaneous liberalization of 1994-2004 did not lead to a radical and systematic transformation of the social and political structure of the DPRK. From about 2004, the North Korean authorities began to pursue a policy of returning to the pre-1994 state.

Why is the North Korean leadership so eager to return to the past? After all, the same people turned a blind eye to the spontaneous liberalization of the late 1990s. What changes in internal and external conditions made this turn in North Korean politics, first, possible and, secondly, desirable from the point of view of the Pyongyang leadership?

page 96
Table 1

North-South trade turnover in 1997-2007 (USD million)

1997

308

2000

425

2004

697

2005

1055

2006

1349

2007

1797

Source: 2008 nen vege paxo, 2008, p. 49.

In order to answer this question, it is necessary to refer to the changes that have taken place in the international situation of North Korea since 2000. In 1998-2008, left - wing nationalist forces were in power in South Korea, which pursued a so-called sunny policy towards the North [Norman, Yong-Sup Han, 2003]. This policy, in particular, assumed a sharp increase in the amount of humanitarian aid provided to the North, and this assistance was provided unilaterally and without preconditions. This change in South Korean policy towards the North became particularly noticeable after the first inter-Korean summit, which took place in the summer of 2000. The flow of aid was accompanied by a sharp increase in trade between the two Korean states. This trade was usually subsidized by the South Korean side and in practice often did not differ much from direct aid (Table 1).
North Korea's trade with China also increased significantly (Table 2). There is reason to believe that in 2001 - 2002, the Chinese leadership decided that the collapse of the DPRK should be prevented as much as possible, and accordingly began to allocate certain resources to keep the North Korean economy afloat.

In 2000-2008, the trade turnover between China and the DPRK increased almost sixfold. Chinese aid to North Korea has also increased, but the exact amount of this aid, unfortunately, remains unknown. The report, prepared by American researchers based on consultations with Chinese experts, said: "If five years ago a third of China's external humanitarian supplies accounted for North Korea, then, according to recent estimates, this share reached 40%. Given that China's aid to Africa and Asian countries grew in proportion to economic growth, this fact probably reflects a significant quantitative increase in the volume of Chinese aid to the DPRK " [Keeping an Eye..., 2008, p. 11].

All this means that the North Korean government has become less isolated on the international stage, despite the latest phase of the" nuclear crisis " that began in 2002 and culminated in 2006, when Pyongyang tested a nuclear explosive device.

Chinese and South Korean aid is not enough to fully restore the economy (apparently, such a revival without radical reforms is impossible in principle). Nevertheless, the situation has significantly improved, in particular, mass hunger has been eliminated (although the food situation in the country remains difficult, and the potential threat of a new famine remains).

Recent events show that the improvement of the economic situation and the easing of external pressure have not pushed the DPRK government to market transformation. On the contrary, relative

Table 2

Trade turnover between North Korea and China in 1997-2008 (USD million)

1997

650

2000

480

2004

1360

2005

1580

2006

1700

2007

1974

2008

2787

Source: Choi Chunnam, 2007, p. 40.

page 97
economic stabilization has led to counter-reforms directed against markets and related social institutions that spontaneously emerged in the 1990s.

This behavior of North Korean leaders at first glance seems irrational, since the success of Chinese and Vietnamese reforms is obvious. In China, the party oligarchy has managed not only to maintain but also strengthen its power by leading events that have led to unprecedented economic growth. Top North Korean officials are well aware of the tremendous success of China, which many of them regularly visit. The Chinese authorities even arranged for Kim Jong Il to visit Shanghai's Pudong district, a cluster of skyscrapers and giant office complexes that is considered one of the symbols of China's economic success [Kim Jong Il..., 2001]. According to newspaper reports, the sight of Pudong made a proper impression on Kim, but there were no consequences for this visit.

The behavior of the Pyongyang authorities and their apparent unwillingness to implement reforms are often perceived as irrational, as a result of Pyongyang's lack of awareness, or as a product of the alleged "paranoid thinking" inherent in North Korean leaders. However, there is a rational explanation for this strategy. North Korean leaders are not going to reform not because they believe fanatically in their own ideology or are poorly informed about the outside world, but on the contrary, because they are well aware of the situation in their country and are well aware that this situation is fundamentally different from that in China or Vietnam. The main difference lies in the very fact of the existence of a rich South. North Korean leaders remember that they live near a country whose citizens speak Korean and are officially considered "another part of our nation", but at the same time have a per capita income that exceeds the income of Northerners by at least 17 times (according to some estimates, the gap between the North and the South in the level of national income per capita in general, it is 50-fold) 4. If ordinary North Koreans learn about the extent of the South's prosperity, it will deal a huge blow to the current North Korean regime and could endanger its very existence. Of course, the South's prosperity is still broadly understood, but few in the North realize how wide the income and living standards gap between the two Koreas is.

The existence of a rich South in the neighborhood means that the "East German scenario" remains potentially possible-unlike Vietnam or China, where such a scenario is not likely. The Chinese know about the prosperity of Japan or the United States, but they do not attach much political importance to this fact, since both the Japanese and the Americans are other nations with a different history. And of course, neither Vietnam nor China has a rich neighbor with which to merge (Taiwan is too small to have a significant impact on the average income of Chinese people even in the hypothetical case of unification, and South Vietnam ceased to exist in 1975).

However, Chinese-style reforms are fundamentally impossible without a significant easing of the information blockade from within and without liberalizing control over the population. Foreign investment and technology are essential starting points for economic growth, and this means that if the reforms are implemented, a significant number of North Koreans will have access to politically dangerous knowledge about the outside world, especially about South Korea. A significant loosening of administrative control is also inevitable: effective market reforms cannot be implemented in a country where every business trip requires a "travel permit", which takes from a few days to a month to complete, and where access to life's benefits is determined

4 For a detailed description of the problems associated with the analysis of North Korean GDP, see [Lee Jong-seok, 2008, pp. 1-4].

page 98
not so much labor efficiency, but real or demonstrated political zeal. If North Koreans learn how much poorer they are than their neighbors, and if they become less afraid of power, then why would they agree to accept an authoritarian "development dictatorship" of the Chinese type - after all, they will have a much more attractive example of the South (and the temptation of unification) before their eyes.

At the same time, unlike their counterparts in the former USSR and Eastern Europe, in the event of a regime collapse, the North Korean elite does not have much chance of becoming successful businessmen. Most likely, in the economy of the new united Korea, all leadership positions will go to people from the South, who will have money, education, experience and, possibly, political support. It seems that the North Korean elite understands that in the event of unification, they will lose everything and get nothing in return. It is no coincidence that one of the questions often asked to foreigners in the DPRK is about the fate of East German officials after the unification of the country.

In such a situation, from the point of view of the authorities, the only reasonable way out is to follow the political course that they and their predecessors pursued for decades. The goal of their domestic policy is to keep the country's population under control, preventing them from organizing and, if possible, cutting them off from information about the outside world. In the field of foreign policy, the most secure strategy seems to be the repeatedly proven strategy of maximizing foreign aid by playing on the contradictions of powers.

However, in order to achieve these goals, it is necessary to limit or even completely eliminate the country's spontaneous private sector, whose very existence undermines the system of administrative and police control and contributes to the dissemination of information dangerous to the regime in the country.

During 1994-2004 in North Korea, the state's control over society and the economy gradually weakened, but in recent years this process has been stopped.

list of literature

2008. vege paekso ("White Paper" on Foreign Policy, 2008 edition). Seoul: Ministry of Foreign Affairs and Foreign Trade, 2008.

Kang Il-chon, Kongseong-yeon. 7.1 gyeongjae kwanli kaesong jeongchi 1 ny pyeongga-wa chae-seok (One year since the introduction of measures to improve economic management on July 1: analysis and evaluation). 2003, N 2.

Kwon Jung-hyun. Talbuk khenrel 10 nen...suchcha chulgo kechhyn tayan (Ten years of escaping from the North... The number decreases, the number of representatives of different social strata increases) // DailyNK, 14.05.2007(1).

Kwon Jung-hyun. Puk sizhan tong jae kyksim... yesong sogos-kkacji komsa (Market control has reached its peak... Even women's underwear is checked) / / DailyNK, 29.11.2007(2).

Gyeonghyang sinmuku. 24.05.2008.

Kim Yong-jin. Puk 10 wol putho 5 tyngyp sikryang pegyk silsi (In October, North Korea will introduce a five-level food distribution system) / / DailyNK, 15.09.2005.

Kim Yong-jin. Pegyk 700 g taesanyn modu chikchan chhulgynkhara (Those who are entitled to a portion of 700 grams must go to work) // DailyNK, 7.12.2006.

Kim Yong-jin. Khambuk Musan chirek ssal'khap soph'ok harak [Sharp decline in rice prices in Musan and Hamgyong-pukto] / / DailyNK, 17. ' 07.2007.

Kim Min-seo. Sinuiju segwangzhang 'pisagyruppa' komel hu chwacheon ([Head of Sinuiju customs deposed after investigation of groups to combat anti-socialist phenomena) / / DailyNK, 29.10.2007.

Kim Seung-chol, Park Sung-yeon. Pyeongyangxi inminban unen silthae-wa chumin senghwal (The role of people's groups in the management of Pyeongyang and in the life of the population) / / Pukhan. 2006. N 4.

Kim Seung-chol. Pukhan tonpho-dyr-y senghwal yangsik-kwa majimak himan (The way of life of North Korean compatriots and the last hope). Seoul: Charewon, 2000.

Kukmin ilbo. 14.06.2004.

Lee Kwang-baek. Puk changmadan thongjae hegwa opso... Kim Jung-il tokchae wihep yein-euro (Market control in North Korea is ineffective... Because they threaten the dictatorship of Kim Jong Il) / / DailyNK, 18.11.2006.

page 99
Lee Mi-kyung. Talbuk yeosong-gwa-y simchheung myeongjob-eul thongheso pon gyeongjeongan ihu Pukhan yeosong-y chiwi pyeonghwa-wa jeongman (Prospects for changing the role of North Korean women-based on refugee testimonies) / / Kajok-kwa munhwa. 2006. N 1.

Lee Moo-chul. Pukhan chumin-dyr gyeongjegwan-kwa kaheok, kaban yisik (The attitude of North Koreans to the economy and their perception of openness and reform) / / Pukhan yong-gu hakhwebo, 2006, No. 2.

Lee Sung-jin, Yang Jung-ah. Puk tan guk changmadan kagek-kwa phummok-kkachi thonjae (North Korean markets control prices and items allowed for sale) / / DailyNK, 15.11.2007

Lee Soo-hyun. Pukhan-yu anzhyn changsa (Market trade in North Korea) / / Pukhan. 2002. N 12.

Lee Jung-seok. Pukhan kookmin sodeek chephyunga (A new assessment of the national income of North Korea) / / Jeongso-wa jeongchaek. 2008. N 3.

Lee Joo-chul. Pukhang chumin-eui webu jeonbo suyeon taedo pyeonghwa (A study of changes in the attitude of North Koreans to information about the external world) / / Hanguk tonbuga nonchon. 2008. N 1.

Lim Gyeong-hyun. Pukhansik gyeongjae kaheog-ye taehan pyeongga-wa jongman: 7.1 gyeongjae kwanli kaesong chong-chi-ryl chunsim-euro (Assessment and perspective of North Korean-style reforms; measures to improve economic management on July 1) / / Hanguk chong-chee-yong-gu 16. 2007. N 1.

Nam Seong-wook. Nonop punya-y kehek tankhen-gwa pegypche chege (Agricultural reforms and the revival of the card system) / / Pukhan, 2005, No. 12.
Nodong sinmun. 21.11.2008.

Onyr pukhan sosik.

Rimzhingan. 2008. N 2.

Ryu Kyung-won. 2008 nen sangbangi siklyang vigi-y silthe-wa wonin-yl phahyechhida (On the food crisis of the beginning of 2008 and its causes) / / Rimzhingan. 2008. N 3.

Seo Yoo-seok. Pukhangun 31 sadan mingyong taedae-wa taenam yellakso-y silche (31st division of the North Korean army and the situation in the "centers of communication with the South") / / Pukhan 2008. N 6.

Tonya ilbo. 26.02.2007.

Han Yong-jin. Puk yenil "chabonjui moraneja" (North Koreans still talk about "getting rid of capitalism") / / DailyNK, 10.01.2006.

Hangere sinmuk. 05.12.2003.

Hanguk ilbo. 04.06.2004.

Joseon ilbo. 28.07.2003.

Choi Chunnam. Jungkook-eui taebuk jeongchaek-kwa 2.13 hub-euro taehan yipchang (China's policy towards North Korea and the June 13 Agreement). Seoul: KINU Publ., 2007.

Yoon Ye-san. Hawe talbukcha silthe-wa taechaek (The current situation with North Korean refugees abroad and the policy towards them) / / Pukhan, 2008, No. 5.
Yang Moon-soo. Pukhang-yijong-hap sijang: unen silthae, pegyphegwa, seonggyok-kwa eumi (Common Markets in North Korea: Their management, efficiency, and significance) / / Gyeongzhehak kondong haksulthehwe, 2005.

Yang Moon-soo. Pukhang-yeo-eui sijang-eui hyeongseong-gwa paljong (North Korean Market Development). Seoul: Pukhan Taehagwon Publ., 2006.

Bank of Korea. Gross Domestic Product of North Korea in 2007. Seoul: Bank of Korea (18 June 2008).

Haggard Stephen, Noland Marcus. Famine in North Korea: Markets, Aid and Reform. N.Y.: Columbia University Press, 2007.

Haggard Stephan, Noland Marcus. The North Korean Refugee Crisis: Human Rights and International Response. Washington: U.S. Committee for Human Rights in North Korea, 2006.

Keeping an Eye on an Unruly Neighbor: Chinese Views of Economic Reform and Stability in North Korea. Washington: Center for Strategic and International Studies & U.S. Institute of Peace, 2008.

Kim Byung-Yeon, Song Dongho. The Participation of North Korean Households in the Informal Economy: Size, Determinants, and Effect // Seoul Journal of Economics. 2008. Vol. 21 no. 2.

Kim Jong // Continues Shanghai Tour. Visits Bourse. Kyodo Wire Agency, 18 January 2001.

Lankov Andrei, Kim Seok-Hyang. North Korean Market Vendors: The Rise of Grassroots Capitalists in a Post-Stalinist Society // Pacific Affairs. 2008. N 1.

Norman D. Levin, Yong-Sup Han, Sunshine in Korea: The South Korean Debate over Policies Toward North Korea. Washington: Rand, 2003.

New York Times

Wall Street Journak. 20.06.2003

Woo-Cumings Meredith. The Political Ecology of Famine: The North Korean Catastrophe and Its Lessons. Tokyo: Asian Development Bank Institute, 2002.

Sang T Choe, Suk-Hi Kim, Hyun Jeong Cho. Analysis of North Korea's Foreign Trade: 1970 - 2001 // Multinational Business Review 11. N 1 (Spring 2003).

Young Chul Chung. North Korean Reform and Opening: Dual Strategy and 'Silli (Practical) Socialism' // Pacific Affairs 77. N 2 (Summer 2004).

Permanent link to this publication: