Introduction

How have sanctions affected the daily lives of North Korean citizens? To answer this question, a closer examination is needed of the trends in the markets and private sector. During the past two decades of recovery, the private sector and markets have become an integral part of people’s lives. As such, although the current sanctions are aimed at blocking the inflow of foreign currency into the state-run economy, they may also have a substantial impact on the private sector.

It is almost impossible to obtain correct and detailed information and data on the trends in North Korea’s markets and private sector. However, reports from internal sources and some knowledge of North Korea’s economic structure allow for a rough guess about the current situation and future prospects. The international sanctions imposed on North Korea can have both positive and negative effects on the private sector and markets. But in time, the negative may outweigh the positive. Indeed, reports from internal sources suggest that while little change has been observed until 2018, the negative effects of sanctions have become more visible since 2019.

Even under strict sanctions, North Korea’s markets and private sector enable ordinary people to secure their basic needs. Still, given that both are heavily dependent on external trade, they will also inevitably feel bigger pressure. In addition, owing to North Korea’s developing market network, the impact on some sectors, such as the foreign currency earning sector, will reverberate throughout the entire economy more easily than before.

* This article is part of 2019 The DPRK Economic Outlook

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