Founding of Modern North Korea 

Following the end of the Korean War in 1953, the Korean peninsula was split between North and South Korea. Following the split, the Kim family came out as the leaders of North Korea, with Kim Il-Sung establishing himself as the first dictator of North Korea. During the 1960s to the late 1980s, despite being fairly isolated, North Korea regularly traded with other countries, namely China and the Soviet Union. By 1960, North Korea was doing over 300 million dollars in trading a year1. While North Korea hit economic stalemates in the late 1970s and 1980s, it was able to keep itself afloat while relying on China and the Soviet Union for trade and economic aid. However, in December 1991, the Soviet Union fell, which had a major impact on the modern world order, particularly in North Korea and other communist countries. North Korea was heavily impacted due to its reliance on foreign subsidies and trade with the Soviet Union and China to survive2. This led to increasing hardships for North Koreans, compounded by the death of Kim Il-Sung in 1994 and the immediate ascension of his son Kim Jong-Il. Just two years into his reign, North Korea was hit with a devastating famine, which led to the death of millions and led to the rise of the Jangmadang Generation.

The Rise of the Jangmadang

Jangmadangs or illegal informal marketplaces first began appearing in North Korea in the mid-1990s, and have become a vital part of North Korean society, leading to several economic, political, and social changes in the past two decades. The impacts of jangmadangs have led to a fundamental shift in North Korean society that is still present today and continues to cause major shifts in the younger generations. Before the famine in the 1990s, the North Korean government would provide for North Korean citizens through rations given by government-run stores and mandatory work units3.  Jangmadangs became vital in North Korea following a major famine where food was scarce and an estimated 2-3 million North Koreans died from starvation between 1994 and 19984. During this time, the North Korean government was unable to provide rations to the general population like they had done in previous years, and several government programs and assistance options were eliminated. Following this famine, rations were never brought back, forcing North Korea to rely on aid from other countries and for its citizens to find other ways to survive 5. This led to the birth and rise of jangmadangs, which began as small marketplaces in villages to buy and sell food but have grown to prominence due to the ability to find just about anything in modern jangmadangs. In modern jangmadangs, people can find nearly anything, including clothes, beauty supplies, cell phones, and South Korean media, which are regularly brought or smuggled in from China. In a micro survey of North Koreans conducted in 2017 by Beyond Parallel, 72% of respondents said that all or most of their income came from participating in jangmadangs6. This can be done in a variety of ways, including buying and selling goods, trading products, and bribing military and officials to look the other way.

 In the current times, jangmadangs are widespread and necessary for the survival of North Korean citizens as they provide a way to survive and to access outside products, information, and media. This access to the outside world and the need to survive on jangmadangs for food and necessities instead of on the Kim regime and state-run businesses has led to major changes in how younger people view and interact with the Kim regime. In a survey of North Koreans, 83% of respondents said that they relied more on foreign goods and media than on the Kim regime, and over 90% said that they consume foreign media at least once a month7. As Min Sung, a North Korean who defected in 2010, puts it, “Our parents’ generation was given everything by the government. But not our generation – we had to find our own food and make our own money. Our generation had to learn how to do everything for ourselves.8” This highlights how the attitudes towards the Kim regime and the reliance on the Kim regime for survival have lessened as North Korea has introduced markets and shifted toward a more capitalistic society compared to before the 1990s famine.

Failed 2009 Currency Reform

While jangmadangs are necessary for survival for the majority of citizens, the rapid growth of jangmadangs has been met with mixed results from the Kim regime, largely due to access to outside information, which has led to some younger North Koreans becoming disenchanted with life under the Kim regime. When jangmadangs first began gaining prominence in the early 2000s, Kim Jong-Il and his officials tried to fight against them with regular raids, arrests, and the 2009 currency reformation of the North Korean Won, which occurred on Monday, November 30th, 2009, and has had a lasting impact till today910. This 2009 currency was an abject failure and led to high inflation and economic instability, with many losing everything overnight. The economic reform was poorly planned and simply chopped two zeros off of most bills and limited the amount of old currency that could be exchanged for new currency. This led to the near collapse of the black market in North Korea due to the extreme hyperinflation, which peaked at over 900% in March of 201011. This sudden drop in value left many scrambling and struggling to afford food and other necessities without assistance from the North Korean government. As shown in Figure 1, the prices of staple foods like rice and corn skyrocketed immediately after the reform.

Since the disastrous currency reform, there has been an uneasy acceptance of jangmadangs by the Kim regime with Kim Jong-Un being much more willing to accept the rise of marketization with there now being over 400 officially sanctioned markets that pay rent of at least 300 USD to the central government in North Korea with the majority centered around Pyongyang as shown in figure 212.

Reactionary Ideology and Culture Rejection Law

While there is a reluctant acceptance of jangmadangs and the rule they play in the north Korean economy, there has been a crackdown on foreign material with the passing of the 2020 law called Reactionary Ideology and Culture Rejection Law which prohibits “reactionary ideology and culture” and has harsh consequences for any North Koreans found to consume or import foreign media such K-Pop, US news, or foreign novels13. Possible punishment ranges from two to three years in prison to life in a labor camp or execution. This law has led to multiple executions, including the public execution of a twenty-two-year-old man after he was accused and found guilty of listening to K-pop. It also led to two sixteen-year-old boys being publicly sentenced to hard labor after being found guilty of watching K-dramas. 

Despite these constraints and multiple attempts to crack down on jangmadangs and the spread of foreign media in North Korea, jangmadangs continue to exist and thrive. They have become a vital part of everyday North Korean life and have caused fundamental social, political, and economic changes.1415

1. (A HISTORICAL SURVEY OF NORTH KOREA’S ECONOMIC DEVELOPMENT AND TRADE, 1945-1984* 2002) 
2. (Hotham, Goodbye, Gorby: How North Korea saw the final days of the Soviet Union: NK News 2019) 
3. A Changing North Korea, (Liberty in North Korea)
4. Natsios, Andrew, The Politics of Famine in North Korea, (United States Institute of Peace, 1999) 
5. North Korea’s crumbling health system in dire need of aid (AMNESTY INTERNATIONAL PRESS RELEASE, 2010)
6. (DuMond, Paradise evaporated: Escaping the no income trap in North Korea 2018) 
7. DuMond, Marie, View inside North Korea: Information and Its Consequences in North Korea, (Beyond Parallel, 2021)
8.  A Changing North Korea, (Liberty in North Korea) 
9. Noland, Marcus, North Korea’s Failed Currency Reform, (PIIE, 2016)
10. Hank, Steve H, North Korea’s Economic Crisis — What Crisis?, (CATO Institute, 2018)
11.  Hank, Steve H, North Korea’s Economic Crisis — What Crisis?, (CATO Institute, 2018)
12. Collins, Lisa, and Victor Cha, The Markets: Private Economy and Capitalism in North Korea? (Beyond Parallel, 2019) 
13. Daily NK Acquires Full Text of the Anti-Reactionary Thought Law, (Daily NK English, 2024)
14. K-Pop Leads to Death: North Korean Youth Publicly Executed for Listening to South Korean Music, (Economic Times, 2024)
15. (Han, North Korea: Rare footage shows teens sentenced to hard labour over K-drama 2024)