Growth And Geography of Markets in North Korea

Ben Silberstein has a new report out this month published through the US-Korea Institute at SAIS. Using the "yardstick" tool on Google Earth, he attempts to map the growth of marketplaces in the DPRK over the last decade or so. 

The author allows that "Because imagery is often scattered over time, the dataset does not allow for a full study of changes in size across time for the whole country. The analysis therefore looks separately at how market size has developed in each city."

Some of the general findings of the paper were that "On the whole, markets have grown in almost all cities analyzed. However, in most cases, the growth has been quite marginal and primarily resulted from restructurings or minor enlargements of existing markets." And, "Contrary to what might be expected, periods of market repression by the government, such as 2009–2010, did not lead to decreases in market size as observable on satellite imagery." 

Some other findings that may come somewhat as a surprise: 

•     There is a correlation between population size and aggregate market size, but it is quite weak and many outlier cities that do not fit this pattern are present in the sample.
•     The correlation between distance from Pyongyang and aggregate market size is weak.
•     With the exception of Kaesong, all cities in the south of the country have larger market square feet per capita than those in the north.
•     All cities with the largest aggregate market size per capita can be found in the western part of the country, while cities in the east are closer to the average size for the country.
•     Many outlier cities that diverge from the average in terms of market size per capita are cities with major ports, such as Nampo.

Silberstein concludes that "with the exception of Pyongsong, most markets in North Korea have either grown or remained at a virtually unchanged level in recent years despite central government crackdowns. Even in cities where market space has not changed much, many markets have been updated, rebuilt and renovated. This is yet another indication among many that the markets are a crucial part of the North Korean economy, and the fact that they have grown in many cities would seem to imply that their importance is growing, too." 

Finally, "market trade may be driven by factors other than those previously assumed. While proximity to the Chinese border has long been thought to be a driver for market trade, this is not reflected in the data on formal market size. The fact that port cities on the west coast have a consistently larger aggregate market size per capita than other cities indicates that sea route trading may be a structural factor for market trade. 

"Moreover, the large market space per capita in the south as a whole suggests that domestic agriculture may also be a major driver for the market economy. None of this is to suggest that cross-border trade with China does not matter. The findings of this report do, however, indicate that the picture is more diverse than previously assumed. Overall, one of the core insights of this study is that many of the factors that determine the size of markets remain far from understood."