Cracks in Kim's World

In the 1990s, the city of Hoeryong, North Korea, bore testament to the privations of life under the country's Stalinist regime. Untold numbers of locals starved to death during a famine that may have killed some 2 million or more nationwide. But the outlook has brightened considerably for the estimated 100,000 residents, due to the arrival of a force the North Korean government has spent almost 60 years trying to keep out: capitalism.

According to interviews with refugees in South Korea and more than a dozen people who routinely slip between China and North Korea, Hoeryong, which is located on the Chinese border in the north of the country, boasts a central market that teems with consumer goods: sacks of rice and corn, boxes of apples, bananas and tangerines. On wooden tables under makeshift awnings, merchants peddle not just pork and fish but also Japanese televisions and VCRs, South Korean cosmetics, fashionable sportswear from China and illegal sex videotapes from western countries. If you know whom to talk to, you can even purchase a home, an outrageous capitalist sin in a country where private property is ideological anathema. "You can buy anything and everything in the market," says Park, a trader who sells televisions she brings in from China. (Like all North Koreans that TIME talked to for this story, Park spoke on condition that her real name not be used.) "Everybody wants to be in business."

That image of entrepreneurialism in flower is very different from the conventional view of a destitute Hermit Kingdom. By most measures, North Korea remains one of the most isolated and desperate outposts on the planet. Most North Koreans earn barely enough to feed their families, and the country is plagued by chronic shortages of everything from food to fuel to electricity. But in recent years modest reforms aimed at liberalizing the economy have helped pry open the country just enough for its people to glimpse the possibilities of a better life. In many parts of the country, North Koreans were already seizing the initiative by going into business for themselves, giving rise to privately owned bakeries, tailor shops and makeshift gasoline stands. Along the borders, people use Chinese-made mobile phones and Chinese cellular networks to arrange trade deals with partners in South Korea and on the mainland. A few citizens even drive their own cars--a privilege previously reserved for high-ranking officials.

Outside Pyongyang and a few big cities where the élite still live on government rations, the majority of North Koreans in urban centers get almost everything from officially sanctioned markets. "This is exactly what was happening in the Soviet Union in 1989," before it collapsed, says Leonid Petrov, a North Korea expert at the Academy of Korean Studies south of Seoul. "Nobody believes in the old socialist ideology anymore--they believe in money."