Justin V. Hastings

 

On his book A Most Enterprising Country: North Korea in the Global Economy

Cover Interview of May 31, 2017

In a nutshell

A Most Enterprising Country asks why North Korea still exists, and locates the country’s survival in its economy’s interconnectedness with the global economy. It argues, while overall, North Korea remains a disaster in all dimensions—socially, economically, and politically—both for its own population and for East Asia, North Korean trade networks have been surprisingly effective. The networks have shown surprising resilience despite (or perhaps because of) their ambivalent reception by the North Korean central state, and throughout the fraught relationship between North Korea and the rest of the world.

For many average North Koreans, trade allows them to survive, or even to acquire lifestyles that the state is unable to provide. For the North Korean state, trade networks are partially responsible for keeping elites in power. The networks are effective because, at the most basic level, North Korean businesspeople are ruthlessly pragmatic and adaptable. They operate with something approaching Darwinian economic logic, as if their survival were at stake, because it often is.

Paradoxically, the harsh political and economic environment that North Korean enterprises experience both overseas and within North Korea, encourage pragmatism, as ideological trappings are stripped away. North Koreans at all levels have been forced by their circumstances to become entrepreneurial. From the 1970s onward, North Korean officials posted overseas were expected to provide both for themselves and for the regime back home, by whatever means necessary. From the 1980s, state companies received permits to engage in foreign trade.

In the face of the famine and the collapse of the formal economy in the 1990s and early 2000s, private citizens were also forced to become entrepreneurial in order to survive, leading to the private markets that sprung up across the country. Hybrid trading networks that mixed private agency and state resources, in turn, emerged from state and private entrepreneurialism by providing goods for the private market through the co-optation of state actors.

State entities themselves have also become hybrid entrepreneurs as they have been forced to provide for themselves and the state, and as state officials have used their positions to engage in creative private income generation even as the formal economy broke down. These networks are highly risk-acceptant, and have become experts at operating in the blurred zones between licit and illicit, or between formal and informal trade, at least as defined by the outside world. They are adept at identifying and operating in jurisdictions that provide a combination of technological development, logistical connections, market and nonmarket ties to foreign trade networks, and friendly (or at least neutral) political and legal environments.

While the central state can shape the contours of the trade—by selectively cracking down on or ignoring market activity in North Korea, and by giving out licenses for formally permitted trade overseas—and can profit from trade through imported goods, bribes, taxes, fees, and loyalty payments up the food chain, the extent to which it actually controls what happens on the ground to any but the most centrally directed networks is unclear. North Korea’s economy has long since ceased to be something tightly controlled by the central government.