A Consumer Class Wields New Power in North Korea

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A Consumer Class Wields New Power in North Korea

Kim Jong Un spurred the upwardly mobile ‘money masters’ to seek foreign deals to boost the economy. Now they want him to make a foreign deal, too

During my first visit to North Korea, in April 2012, my tour group’s North Korean guides suddenly stopped in their tracks at the door of a seafood restaurant one evening. We all joined the restaurant staff and diners, drawn to the glow of a plasma TV that had been hastily positioned on two wobbly dining tables by the entrance. There on the screen, giving his first public speech, was the country’s new leader, Kim Jong Un, about whom the outside world knew little and most North Koreans knew even less.

After ten minutes spent acknowledging his paternal predecessors and the military, with frequent interruptions for applause, the young Mr. Kim made a surprising pronouncement about the country’s priorities: He officially elevated economic development to an equal status with its nuclear weapons program. He promised that his people would “not tighten their belts again” and would “enjoy the wealth and prosperity of socialism as much as they like.” Western economic sanctions tied to the nuclear effort had put these dual aims in direct conflict, so Mr. Kim’s pledge created expectations and pressures within North Korea: Would he be able to strike a deal with the West?

In four subsequent trips since 2012, I have seen an increasing display of wealth on the streets of Pyongyang— Hermes handbags, Rolex watches, faces powdered in French cosmetics—and fewer tell-tale signs of poverty. Mr. Kim has overseen the evolution of a new socio-economic class in North Korea, known locally as the donju, or money masters. They are denizens of Pyongyang and other large cities who are focused on making lucrative deals and attaining personal wealth—but who also pay lip service to the doctrines of North Korea’s ostensibly state-run economy, which has been crumbling for decades. As one of my guides once gushed to me, “Our style of socialism is unique in the world.”

As a novelist and art critic, I was drawn to North Korea after exploring the contemporary art scene in neighboring China, lured by the chance to explore an isolated society where everyday life is shrouded in propaganda. Eventually I enrolled in language courses at Kim Hyong Jik University in Pyongyang—the only American taking advantage of a program offered to Westerners for the first time.

My studies enabled me to spend weeks in the “capital of the revolution,” as it has been deemed by the government, and to get to know a handful of North Koreans there. Though none of my guides ever criticized the government directly, during my later visits they felt no need to hide their love of luxury brands, personal wealth and business deals with foreigners. That was certainly not the case back in 2012.

The capitalist roots of the donju were established in the famine years of the 1990s. A series of natural and policy disasters, along with the collapse of the country’s then-chief benefactor, the Soviet Union, sent the North Korean economy into free fall. The public food distribution system ceased functioning for all but the elites in Pyongyang. Until then, the populace had relied on these essential rations as a means of sustenance, because “official salaries are meaningless and are scarcely more than token payments,” according to Seoul-based North Korean studies professor Andrei Lankov. To survive, North Koreans had to go into business for themselves. Traders began crossing what at the time was a very porous border into China and bringing back goods to sell. It was a brutal lesson in free-market economics: Do or die.

The widespread opening of jangmadang, as the black markets are known, eventually lifted the country out of the famine, and the new outlets never went away. The state periodically attempted to intervene under the reign of Mr. Kim’s father, Kim Jong Il, by shutting markets down, regulating prices or initiating currency reforms that decimated private wealth. Yet the unofficial economy took over as the official one failed to recover: The Seoul-based website Daily NK estimated from the reports of defectors that, by 2008, over two-thirds of North Korean employment was in the black market. In a 2015 survey of defectors by a Seoul University professor, over half said those markets had been their main source of food.

The smaller and more elite donju class is made up of individuals who have been assigned to (or have bought their way into) the most prestigious jobs in the official state economy—where they enjoy an unofficial license to go into business for themselves. Under Kim Jong Un, it is increasingly easy for them to travel abroad to cut deals, and they have engineered any number of covert ways of violating sanctions. “If you have money, you can buy anything you want in North Korea nowadays,” one recent defector told me in South Korea.

In 2016, one of my North Korean guides, a donju, pitched me: Perhaps I knew some businessmen in Berlin, where I live, who might be of a riskier disposition and willing to covertly violate the sanctions. (For the record, I didn’t.) “We can do virtually anything,” the guide asserted. “I know some guys who are IT programming geniuses. But it doesn’t have to be computers. We can sell hair for wigs, for instance. Artwork—sure, we can provide. More than anything, we need foreign partners.”

My last visit to Pyongyang was just over a year ago, before the U.S. travel ban was imposed. One afternoon in my hotel room, I saw on the international news that the North had just fired a short-range ballistic missile into the Sea of Japan. That night, I had dinner with two donju working in tourism, to whom I broke the news, since it had not yet been on state media. Their reaction was not the ecstatic jubilation with which North Koreans are supposed to greet such events.

“What was the reaction of the Western media?” they asked with concern. I told them the truth: “Commentators suggest that more sanctions are on the way.” My companions looked down into their bowls of cold noodles, and a somber atmosphere permeated the rest of the dinner. The message, though unspoken, was clear: All this saber-rattling is bad for business.

My experiences in North Korea have taught me that the donju are the closest thing North Korea has to a dissident class. They are savvy and worldly and certainly don’t conform to the outside world’s image of the brainwashed Kim Jong Un fanatic; they don’t buy into the state’s propaganda. As for Mr. Kim, in April he declared that the country had met its nuclear goals and would now make economic development the top priority. In seeking a deal with South Korea and the U.S., Mr. Kim has perhaps joined the ranks of the donju himself.

—Mr. Jeppesen’s new memoir is “See You Again in Pyongyang,” published by Hachette Books.