Yongusil 79: Market Size and Geography in North Korea

By | October 09, 2015 | No Comments

Aerial view of Tonghungsan Market in Hamghung | Image: Google Earth via Curtis Melvin

Aerial view of Tonghungsan Market in Hamhung | Image: Google Earth via Curtis Melvin

North Korea-watchers, professional and amateur alike, are in a constant search for tangible evidence that the regime’s attitude toward the markets is changing. Yet, the understandable limits on data collection for North Korea — on any subject — is real and frustrating. Defector testimony has proven central to some research, especially in the humanities, as has fieldwork in areas of China adjacent to North Korea. However, questions of reliability and representativeness have led many social scientists to seek new avenues for better understanding of change in North Korea.

Satellite imagery, largely supplied by Google Earth, has been valuable source material for such scholars. With a trained eye, a researcher can utilize the satellite images to understand the changing urban and rural landscape of North Korea to better understand economic development, infrastructure construction, settlement and urbanization, and military advancements and basing. Such data is useful in chronicling what is happening in North Korea’s economy, where “licit trade” grows alongside activities like methamphetamine and counterfeit currency circulation which tend to attract more media attention.

Taking cues from his work with Curtis Melvin at North Korean Economy Watch, University of Pennsylvania doctoral student (and Pacific Forum CSIS James A. Kelly fellow) Benjamin Katzeff Silberstein has recently published his analysis of satellite data on the development of formal markets in North Korea since the year 2000 [“Growth and Geography of Markets in North Korea: New Evidence from Satellite Imagery”, US-Korea Institute at SAIS]. Silberstein’s report seeks to understand possible relationships between geography and the growth of formal markets in North Korea using satellite imagery and Google Earth’s measurement tools. Silberstein measures the size of formal markets in all provincial capitals and special cities in North Korea and plots the data for each city over time as well as against other possible variables affecting aggregate market size, including population size, distance from Pyongyang, and distance from ports or borders. There are, he finds, only weak correlations between these variables. Silberstein also notes that proximity to the Chinese border is no guarantee to large markets, most of which are far from the Yalu or Tumen rivers — the often-neglected city of Haeju (South Hwanghae province) being a signal example.

While the data itself is rich for those interested in the general growth of formal markets in major North Korean cities, the report is primarily valuable as a jumping off point future study of the North Korean economy. Stephen Haggard has already raised questions about how much market size may serve as a proxy for market activity and how local or central control plays a role in the varied sizes of the markets under study. Another area for future research would be comparison of official markets and informal markets. As noted by Silberstein in his presentation at USKI on October 5, tracing informal markets, or street markets, is difficult due to their irregular sizes and shapes as well as hours of activity and methods for such a study would need to be carefully planned. Additionally, as the author pointed out in his presentation of the data at USKI, additional data on infrastructure quality over time, the military presence in a given city, possible run-off effects from special economic zones or “economic development zones” would be helpful as well. The data produced by Silberstein is certainly the first step in tackling some of these questions, leaving several doors open for future research.