North Korea’s growing “entrepreneurialism”

Photo by Brenda Lin

On Feb. 16, Justin V. Hastings, a Senior Lecturer in International Relations and Comparative Politics at the University of Sydney, visited Tech to discuss North Korea’s surprising entrepreneurship.

He began the lecture by posing an intriguing question: “If North Korea is so isolated, then why must we stop the country from doing business with other countries?”

His research actually led him to believe that “North Korea is a paranoid Stalinist, state but very enterprising.” North Korea actually “has a fairly vibrant private economy” with middle-hybrid entities finding a niche in the economic environment.

Citing North Korea’s state-owned restaurant chain, drug trafficking industries and sanctions-busting efforts as examples of entrepreneurship, Hastings delves into the business side of the intriguing nation-state.

The country’s personal state-owned restaurant chain actually holds locations outside North Korea to earn profit. The country profits from its isolated status by allowing restaurant-goers to briefly experience North Korean cuisine. For drug trafficking, the country “had its owned state-run drug companies” which Hastings rightly deemed “fairly unusual.” North Korea now specializes in the crystal meth drug trade.

With regards to sanctions-busting, Hastings refers to North Korea’s expertise in using its isolated situation to its advantage. Since excessive sanctions from outside nations limit North Korea’s trading abilities, the country relies on the black-market to receive sanctioned goods.

If a North Korean buyer wants sanctioned goods, the broker will go to a Chinese trading company who will then go to the main supplier and find a way to deliver the goods across the border into North Korea. T

oday, though, the North Koreans are using their entrepreneurial abilities to essentially cut out the middleman; moreover, they are cutting the Chinese trading companies out of the equation by getting the sanctioned goods across the borders themselves.

Hastings also showed the audience two vivid pictures: one featuring Dandong, China, and the other featuring Sinuiju, North Korea—two cities located directly across from each other. The Dandong picture revealed a developed city with a thriving economy, while the Sinuiju photo showed an undeveloped city with barren land. Although the disparities in wealth between the two cities were evident, Hastings revealed a shocking insight: “Dandong, China, got rich on doing business with North Korea.”

The North Korea-China relationship is unique. Moreover, “China has profited from North Korea’s strangeness” as evidenced by the Chinese turning locations close to North Korea into lavish tourist-heavy resorts.

Additionally, Hastings’ research led him to a surprising conclusion with major implications for U.S. foreign policy: “North Korea gets better at operating the more hostile you are to them.”

With an ideology emphasizing the “do anything to survive” mentality, North Korea does not respond to threats lightly with regards to the business realm. He proposed that instead of imposing blanket sanctions, countries should impose more specific sanctions to limit North Korea’s creative, sanction-busting efforts.