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About a three-hour drive from North Korea’s
capital, Pyongyang, lies what might be the
world’s most isolated ski resort.
Masik Pass offers 11 runs and 4 lifts, plus
a gear rental shop.
The attached luxury hotel features 120 rooms,
complete with a swimming pool, sauna, bar,
and karaoke room.
Snowmobiles were imported from China and chairlifts
from Austria, after a Swiss company refused
to sell them, which North Korea called a “serious
human rights abuse”.
The resort has four and a half stars on Trip
Advisor from genuine, happy tourists.
The majority of its visitors, however, come
from within North Korea.
While the country is almost exclusively portrayed
as a poor, starved relic of the past, recent
reports from defectors have begun to paint
a much more nuanced picture.
In reality, Pyongyang cafes are filled with
patrons reading from tablets and teenagers
making phone calls, some driving BMWs and
Mercedes.
The key to understanding who is really in
charge, whether a revolution will ever occur,
and what daily life is like, is to see how
North Korea - both the state and the people
within it - make money.
After Swiss cheese, bad haircuts, and empty
buildings, North Korea is best known for seemingly
wanting to end the human race in a giant nuclear
explosion.
When Kim Jong-Un finds his country unusually
hungry or one of his yachts, in need of repairs,
the country turns into that annoying kid on
the playground who will not shut up until
you share your Hot Cheetos.
Insults are hurled, threats made, and missiles
launched.
Inevitably, the U.S. sees no choice but to
respond, agreeing to ease sanctions or grant
food aid in exchange for a return to normalcy.
Now, with their mouths freshly fed, Kim and
his compatriots will suddenly turn from murderous
dictators to charming, levelheaded, although,
admittedly, stylistically eccentric… diplomats.
Then, 6, 12, 18 months later, like clockwork,
we’ll all have Déjà Vu.
But while Kim’s seeming obsession with nuclear
toys attracts nearly all the media attention,
in reality, it’s just one of many strategies
the world’s most secretive regime has for
accomplishing its much larger goal: staying
alive.
The fundamental challenge for North Korea
is that it cannot truly, verifiably, and permanently
give up its nuclear capabilities without becoming,
at best, irrelevant.
At the same time, it cannot truly thrive with
the level of international sanctions that
come with threatening to sink an entire U.S.
state.
Thus, all three generations of leadership
have been forced to master the art of negotiation:
to extract just enough aid to stay afloat
while never actually giving up its one and
only source of leverage.
Before founding the Democratic People’s
Republic of Korea, Kim Il-Sung was an unlikely
leader.
Having fought alongside Chinese communists
and later in the Soviet army, the first Kim
was well prepared, militarily, but lacked
the more soft skills considered necessary
to oversee a communist republic.
His education was poor, Korean mediocre, and
understanding of Marxist theory deemed insufficient.
Despite this initial hesitation, he was eventually
selected to lead the new state, although,
with much oversight.
Soviet advisors drafted North Korea’s constitution
and approved all of its major speeches in
advance, making it a near-perfect puppet-state,
or, in gentler terms, a “Soviet Satellite
Regime”.
By the end of the Korean War, Kim Il-Sung
had become a national hero and icon - praise
which fueled grander ambitions.
His devotion to socialism soon morphed into
a strong sense of nationalism - a desire to
be more than Moscow or Beijing’s puppet.
Many Soviet officers were purged from government
positions and for several decades, North Korea
intentionally positioned itself between the
Soviet Union and China, realizing it could
play them off each other.
Whatever Moscow gave or promised, Beijing
was sure to match, and then some, and vice
versa.
Both countries knew they were being played,
of course, but preferred this to the far worse
alternative: ceding influence to the other.
This dynamic of reluctant support, in fact,
has more or less continued to this day.
Conventional wisdom portrays China as North
Korea’s only ally, or even puppet-state.
The reality is North Korea hasn’t been a
true puppet-state for many decades, and with
China, it has less a marriage and more an
opportunistic relationship.
China’s strategic interests overlap with
North Korea’s continued existence, not necessarily
success or prosperity.
At a base level, what Beijing wants is nothing
- stability.
By far, its worst-case scenario is a dissolved
or failed North Korea, after which, up to
25 million, unskilled, culturally dissimilar
refugees will flood into some of its most
economically-weak North-Eastern provinces.
Even worse would be the accompanying advance
of American forces on China’s doorstep.
The North, in other words, acts as a nice
buffer from U.S. troops stationed in the South.
As long as the North doesn’t push tensions
too high, China is happy more or less maintaining
the status quo.
Ideally, it would like to see Kim Jong-Un
follow its own example of economic reform
and opening up, making it less dependent on
nuclear threats for survival, and potentially
justifying a retreat by American forces.
Realistically, though, China also knows its
influence is limited.
China is indeed North Korea’s largest trade
partner, by a mile, but it’s easy to overstate
the leverage from trade with a country whose
propaganda can offset almost any internal
challenge.
In simple terms, Beijing could destroy North
Korea - militarily or economically.
It almost certainly also has a plan for regime
change should it ever be deemed necessary.
What it lacks is the fine-grained ability
to influence it.
And because China wants stability first and
foremost, it has no reason, currently, to
use its blunt weapon, leaving it with limited
leverage.
So while there exists a clear power dynamic
between the two nations, neither is likely
to do anything too dramatic.
When Kim met with Xi Jinping in 2018, the
supreme leader was seen obediently taking
notes while the Chinese president spoke.
China has historically condemned its missile
tests and voted in favor of UN sanctions.
And yet Xi recently made the first visit to
Pyongyang by a Chinese leader in 14 years.
North Korea, for its part, understands the
need to, at a minimum, not anger the closest
thing it has to a friend.
It’s all too familiar with the cost of losing
an ally.
After the collapse of the Soviet Union in
1991, North Korea suffered a devastating famine
which ultimately killed somewhere between
200,000 and three million people.
Before this, food was distributed via its
Public Distribution System - PDS - which had
farmers surrender their harvest to the government,
who then allocated it amongst the population.
This model worked well during the 50s, 60s,
and 70s, even making Chinese towns on the
border jealous.
In the 80s and 90s, however, the system came
violently crashing down.
450 grams of food rations per day in 1994
became 128 grams by 1997.
Soon only six percent of the population received
any food from the government who promised
to feed it.
This, arguably, was the most pivotal moment
in the nation’s history, alongside the deaths
of its first two leaders.
The PDS has never fully recovered, leaving
most of its 25 million people to fend for
themselves.
Officially, Capitalism doesn’t exist here
- private property and trade are both highly
illegal.
In practice, however, it can be seen everywhere
- from those in poverty all the way to the
highest levels of the regime.
Almost everyone is assigned a government job,
and yet 62% of defectors surveyed in 2010
say they had worked unofficial, gray market
jobs.
Married women can register as full-time housewives
rather than work an official job - giving
them the freedom to start a private enterprise.
Across the country, women can be seen in road-side
markets selling food, and homemade or imported
goods like Russian cigarettes and Chinese
beer.
Ironically, because of this, women’s rights
are surprisingly strong in North Korea, where
they tend to make many multiples of their
husband’s income.
As expected, the government is aware of this
illegal activity and could, in theory, eliminate
it entirely.
But having never recovered from a now-three
decade-old famine, most of the population
has come to depend on private markets for
basic survival.
Additionally, the majority of this trade is
conducted purely for material, not political,
reasons.
The poor simply wish to get by and the rich
only seek a more luxurious life - not an end
to the regime.
So the state simultaneously manages markets
through selective enforcement and also sometimes
even encourages it.
The “August 3rd Rule”, for example, allows
one to pay a fee and be exempted from official
work - essentially profiting from instead
of cracking down on private enterprise.
Still, there are limits.
North Korean banknotes were ordered to be
exchanged in 2009 with a limit of 100,000
Won per person - wiping out many family savings,
and causing the closest thing North Korea
has likely ever seen to a protest.
This taught North Koreans not to trust their
own currency.
So, today, most unofficial transactions involve
a foreign currency - usually the Chinese Yuan.
And just as individuals resort to Capitalism
- so do government committees and departments.
For decades, many offices have been given
limited or no resources, forcing them to generate
their own.
Anyone with any authority, therefore, is likely
to use their influence to start a business,
sometimes using the national military as workers.
Those who bribe the right people and play
the game well can become fabulously rich - even
by international standards.
These newly-wealthy families drive luxury
cars, own cell phones, and eat Western food
in Pyongyang, which some jokingly refer to
as the “Dubai” of North Korea.
In this way, and many others, North Korea
is two very different countries: the North
Korea seen by the outside world, and the one
lived by the vast majority of its population.
The North Korea of tall buildings and bright
lights you see in tours and pictures, and
the one, only minutes away, of sprawling fields
and flickering, if any, electricity.
The famous monument to socialism, and the
private shops selling Western clothes only
blocks away.
And, finally, an unwavering ally, on the surface,
who, in reality, is, at best, ambivalent.
For now, the system works.
Inevitably, though, someday in the future,
like the Soviet-era machines on which its
factories run, North Korea will simply stop
working - for any number of potentially trivial
reasons.
In truth, it’s remarkable how long it has
worked.
But, for the time being, this taped-together,
occasionally-in-need-of-kicking, jury-rigged
machine keeps slowly, inefficiently chugging
along.
For all of its strangeness, the genius of
North Korea, the reason for its survival - is
its relative self-sufficiency.
It knows how little say a small nation like
itself has in the larger world.
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