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North Korea: Witness to Transformation

Choson Exchange: The Women in Business Initiative

by | August 30th, 2013 | 07:15 am

In an interview with DailyNK over the weekend, I was asked about a paper we did on the gender dimensions of economic change in North Korea. In particular, I noted that marketization involved two quite different and non-mutually exclusive effects. On the one hand, women were being forced into the market in order to compensate for lost household income–in some cases through job loss—and to put food on the table. On the other hand, the market provided opportunities for the entrepreneurial—and connected—to effectively launch small businesses and even get rich by North Korean standards.

Geoffrey See at Choson Exchange quickly weighed in with a report on an innovative training program they have been doing with women entrepreneurs; the project is in line with the organization’s broader mission of providing economic training to both public officials and managers.

Geoffrey See: “We have had over 100 people take part in our Women in Business initiative in North Korea this year. A number of the females passing through our program belong to what would be considered a small and business enterprise segment, with management rights accruing to these small business owners in the absence of a legal framework recognizing their business rights. What is interesting is that some of them run substantial businesses (with $500K to $1M in annual revenue) and are investing in fixed assets. They are building new restaurants, petrol stations and expanding distribution. Some of them borrow from Chinese investors or Singaporean microfinanciers at annualized rates of 30-60%, and have had consistent repayment records, indicating returns that exceed that high hurdle.” 

We would give our eye teeth to survey these women as questions abound, some of which are probably not conducive to continuing the effort. Obviously, they were selected for inclusion in this program which has both an upside and downside. On the upside, someone somewhere in the system thinks it’s a good idea to train these women, presumably to improve the efficiency of their operations and to permit them to grow. Someone, somewhere thinks that opening the spigot to some foreign micro-lending is a good thing to do. On the other hand, it is unlikely that the candidates are selected at random from women in the market; connections almost certainly playing a role. The playing field is probably not level.

But that is quibbling. If these women can do up to $1 million in business in the North Korean system, there is hope. And if they can borrow at 30-60% and still be profitable, it shows how starved for capital the country is and what small investments will yield. Kudos to See and to Choson Exchange for a novel approach to engagement with immediate impact.