North Korea is quite possibly one of, if not the last, traditional socialist planned economies that exist on earth. However, with all the state governance and control over the country’s political economy, an entrepreneur class has emerged called the “donju.” In some respects, they are akin to the Soviet Nepmen during the New Economic Policy in the 1920s, who profited from limited private trade and small-scale enterprises amid economic crisis. However, these informal capitalists, who amassed wealth primarily through black-market trade, smuggling, and small-scale enterprise, have been prevalent and have challenged socialist norms in the country since the 1990s famine and North Korean economic crisis. By the 2010s, these informal traders had become extremely important, although officially unrecognised, for financing state projects through specific taxes and keeping household living standards at a certain level amid shortages in the country. Since Kim Jong Un became the leader of the country, taking over after the death of his father Kim Jong Il, there was an initial liberal attitude taken towards the Korean Nepmen, allowing informal markets to become prevalent, which inevitably grew and diversified into consumer goods and services.
The turning point, however, like for much of the world, was the COVID-19 pandemic, and to counteract the effects of the virus the government implemented a new economic order which leveraged border closures to dismantle unregulated markets, curbing much of the donju influence. This restructuring to regain control over the growing influence of unrecognised capitalist behaviour rapidly shrank informal trade, pushing those who capitalised on it into formal regulated roles or into oblivion. The government also enacted policies of requisitioning private businesses into official state-sanctioned networks. Again, the main goal for the government in this regard was to recentralise economic control and curb the influence of informal markets and capitalist behaviour in the country, but also to boost state revenues and limit the smuggling of external media and products.
However, government policy has shifted again through 2025 due to issues with both inflation and an overall currency crisis, where the government has implemented a limited cash wage system for farmers to help incentivise productivity, which is in complete divergence from the traditional socialist rationing system. This policy has, to some degree, effectively legitimised small private capital accumulation in the provinces. This small, government-sanctioned policy again reflects a history of the Soviet New Economic Policy, albeit at a much more limited level. The thinking is that by limited decentralisation to the provincial levels there is potential for higher efficiency, but it also risks eroding ideological purity. This is why the government is very careful with liberalisation and decentralisation and seeks to maintain tight control over it.
Politically, the rise of this entrepreneur class has created a somewhat paradoxical problem for the North Korean government. While the rise of the donju provides much-needed economic resilience for the state and the people, it also presents a political challenge and a potential threat to ideological purity and stability. Just like the Soviet Nepmen, the risk of a newly rising elite has the potential to cause dissent and frustration amongst other factions of society. However, it seems that for the time being their activity is going to be tolerated at a limited level.
BakuTiflis 