North Korea Services and Marketing
Women waiting at a bus stop in P'yongyang
Courtesy Tracy Woodward
The Yonggwang Station of the P'yongyang Metro
Courtesy Korea Pictorial
As in other sectors, the service industries are either under
direct state control or cooperatives. The sole, minor exception
is the peasant market. One foreign estimate suggests that service
industries accounted for 17.2 percent of GNP in 1990. In order to
meet the increasing demand for services and distribution
channels, the Third Seven-Year Plan calls for expanding retail
trade by 110 percent, with particular emphasis on increasing the
supply of consumer goods to rural areas. This expansion will be
accomplished by extending the network of general and food stores,
restaurants, and service centers.
Most retail shops are regulated and operated by the People's
Services Committee, which was established in 1972. There are four
types of stores. State-run stores include all department stores,
vegetable and meat markets, and district shops. Several
department stores are located in the national capital, and each
provincial capital is supposed to have at least one department
store. In the cities, the government planned to have one allpurpose store in each neighborhood, usually located on the ground
floor of an apartment building. The second type of store is owned
and operated by cooperatives, but since the mid-1960s most have
been brought under the control of the People's Services
Committee. A third type of store is the factory outlet, usually
attached to light industrial factories. Shoppers can buy goods
directly from the factory; the price, however, is the same as
that of the other retail outlets. Fourth, there are separate
stores for military personnel and for railroad workers as well as
reports of special luxury shops for high-level cadres. There also
are some hard-currency-only stores.
After the August Third People's Consumer Goods Production
Movement was introduced, local governments were permitted to
establish direct-sale stores within their districts. In January
1990, the number of workers active in the movement nationwide
reached several hundred thousand, and the total value of sales
under the movement was 9.5 percent of the total retail sales of
the traditional distribution network of state and cooperative
stores. In the early 1990s, there were 130,000 shops, service
establishments, and "food processing and storage bases." Prices
for all retail and wholesale goods are fixed by state ministries
and do not vary from shop to shop.
The only exception to controlled marketing is the peasant
market, where surplus farm products--mostly nongrain daily
necessities such as eggs, vegetables, milk, fish, poultry,
rabbits, beef, mutton, seasonings, and so on--are sold at freemarket prices based on supply and demand. Although North Korea is
doctrinally opposed to peasant markets and considers them
remnants of capitalism, these markets had gained considerable
headway by 1964. The markets are used as stop-gap devices to
provide consumers with daily necessities and as a way to reduce
black-market activities. One or two of these free markets are
located in each county and are opened two or three times a month
in central locations. Local officials watch these markets
carefully, even though prices are not regulated, to make sure
that goods are not being diverted from the state stores.
Data as of June 1993
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