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IN the shop windows of Pyongyang, something unusual is on display. In this rigidly communist nation, where shops are run by the state and almost no one has the means for impulse-buying, handwritten signs have begun to appear. "Sale -- 10 per cent off," they say.
Such a sight would hardly be noteworthy in consumer-crazy South Korea, but in North Korea the posters suggest a new eagerness to make money, which can only mean that profit has become a motive in Kim Jong-il's "socialist paradise".
"This has great significance because it implies an interest in selling," says Rildiger Frank, professor of east-Asian political economy at the University of Vienna. "In a socialist country, it is a burden to sell. If you ran short of supplies you have to get more and consumer goods are generally in short supply. But if you don't sell anything it doesn't matter because you still get paid."
When Prof Frank was in Pyongyang in October -- at the time of the 60th anniversary of the foundation of the Korean Workers' party -- he saw a poster in a watch store that read: "To celebrate the important holiday, we are selling many goods at a 10 per cent discount from October 10 until October 31."
Foreign residents in Pyongyang also report seeing more "sale" signs, an oddity in a country where prices are fixed by the state.
"Obviously they are making a profit and they are benefiting personally - the owners or managers must have an interest in increasing their sales - otherwise why would they bother?" Prof Frank said.
Buying and selling in North Korea has traditionally been tricky. To buy a television, a person needed money, a coupon saying they could buy a television, and for televisions to be available.
The appearance of discounts shows that shops now have some flexibility over prices. Recent visitors to Pyongyang also describe an increased willingness to bargain.
Peter Beck, head of the Korea office for the International Crisis Group think-tank, experienced a "nascent form of kiosk capitalism" at a street co-operative in Pyongyang. "I only had Won 100 -- good for two cups of juice -- but we bargained for three, and then they let us pay for ice cream in Chinese money, asking for more than the street rate," Mr Beck said.
The North Korean regime, meanwhile, remains highly aware of the political instability that could be generated if it lost its grip on the populace.
Some economists say the half-hearted economic reforms of 2002 -- such as liberalising prices and devolving management of state-run companies -- merely institutionalised changes that had already taken place.
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FT Syndication Service
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