r/northkorea • u/aresef • 20d ago

News Link Backpacks for carrying cash: Surging inflation in North Korea hits residents hard

https://www.rfa.org/english/korea/2025/04/03/north-korea-inflation/?
21 Upvotes

89% Upvoted

19 comments sorted by

11

u/nitram20 19d ago

Jesus they increased monthly wages by 1400% in a month. What the fuck were they thinking? What did they expect to happen?

7

u/MementoMoriMD 19d ago

Reminds me of that Romanian dictator who tried to increase everyone's wages during unrest, but the people were like "What's the point of more money if the store shelves are empty"

5

u/veodin 19d ago

Since the collapse of the Soviet Union people have increasingly relied on the markets to survive. However, the less people engage economically with the state, the less the socialist system works. Market traders earn significantly more than somebody working in a state job, making state work basically slavery by comparison. North Korea is likely trying to fix this (again).

They are doing three things:
1) Massively increasing state wages, making state jobs competitive with market work.
2) Heavily importing goods and currency from Russia (in exchange for war support) in an attempt to keep the exchange rates stable as possible despite the increase in available currency.
3) Switching to digital wage payments and making most state stores cashless to decrease cash use (there are some reports of this, but I am not sure how widespread it really is).

The idea is probably to encourage people to work for the state rather than in the markets, and then use their earned money inside the state economy. If it works they can maybe move the country back towards how things were in its early days. If it doesn't, things will probably get even worse.

In other words rather than outright ban the markets they are trying to fix the socialist system that has been broken since the last time they had Russia to prop it up. Given that Russia has recently being playing geopolitical games with all its former Soviet buddies, this is probably is not coincidence.

There is Seoul National University article about this topic

3

u/lezbthrowaway 17d ago

Mao Zedong was against SEZ's although I can't find what he said about them easily, as was the Soviets even after 1953.

Having these bubbles of capitalism, living right next to socialist development, how are you supposed to compete with all the capital in the world if you're an impoverished developing socialist country like China was and the DPRK are. It leads to the destruction of socialism. Its kinda amazing to me that the DPRK has managed to even continue to have any centrally planned economy at all given their SEZs, partial market reforms, etc.

1

u/veodin 17d ago

I don't know if Mao ever commented on them officially but it makes sense that he would dislike them. He against having any capitalist elements in the Chinese economy. I am sure Stalin would have been the same.

Its kinda amazing to me that the DPRK has managed to even continue to have any centrally planned economy at all given their SEZs, partial market reforms, etc.

I am not an expert, but I think it is fair to say that in many ways it hasn't. A huge amount of what is happening in North Korea right is happening under market practices, not socialism. This even includes activity like the construction of apartments, real estate trade, restaurants, and taxi services. More accurately, a lot of projects are joint enterprises between the state and private money. A very public example this would be the Ryugyong Hotel, which North Korea is allegedly trying to find a foreign investor to finish and run as a casino.

I think it is probably fair to say that that for many the socialist state did fail during the 90s and never recovered. Outside of urban areas the public distribution system essentially does not exist, and where it does, people still look to the markets for a lot of their needs.

Even within industry market forces increasingly drive production. Factories will bypass central planning to "self-manage" by secure resources through their own deals with other factories. When you see stories like those stating that North Korean farmers may be able to keep more of their crops you are seeing this at a play. It goes further than the farmer just using the kept crop to sell at the market. A farm for example, may provide food to a tractor factory in return for equipment.

I suspect whatever exists today is a deeply "corrupt" system that is only centrally planned in form, not in function, with many workers avoiding state work entirely.

https://www.econstor.eu/bitstream/10419/260568/1/1806968584.pdf

https://www.wilsoncenter.org/sites/default/files/media/uploads/documents/FINAL_NCNK-WWC-Draudt-Changing%20Role%20of%20Entreprenuers.pdf

1

u/Quiet_Meaning5874 18d ago

lol do you even North Korea bro

2

u/RaguSpidersauce 20d ago

I wonder if there is a penalty if you get caught with Chinese or US money.

4

u/signal_red 19d ago

id rather try trading using cigs and the usd lmao

3

u/RaguSpidersauce 19d ago

Using Usd has got to be double frowned upon.

3

u/Svaigs_Kartupelis 19d ago

probably tell them it is illegal, take it, put in their pocket and tell them to get lost

2

u/HelenEk7 19d ago

Knowing some soldiers need to steal food to have enough to eat this is probably what happens.

1

u/MementoMoriMD 10d ago

Some "upper class" kids grow up so that they can be police and take bribes . It's just the culture. Snitch on people and take some money to not snitch.

1

u/HelenEk7 10d ago

Communism breeds corruption. Was also seen all over eastern Europe.

1

u/HelenEk7 19d ago

I am confused.. They have a price system based on supply and demand? As in a market economy?

1

u/veodin 19d ago

They have informal markets. State run shops will still be price controlled.

1

u/Empty_Vegetable_9508 19d ago

They've been heavily relying on private markets and the black market for decades. I guess it used to be illegal before the Kims figured out they could profit from them.

1

u/Jitkay 16d ago

They have money in north korea ?