The effect of monetary policy on the travel industry can be profound in any economy, but in North Korea, it’s usually more complicated. In a developed market, for example, a monetary policy that leads to inflation can make travel more expensive (duh, right). Well, in North Korea, you have to look past the implications of monetary policy to the underlying political drivers … because the root cause can result in more than financial constraints. The end result will blow your mind.
Take Kim Jong Il‘s latest move to revalue the North Korean currency. On its face, it isn’t terribly exciting. Then, you add to it a wealth cap — the people swapping old currency for new could only receive a certain amount back, rendering the unexchanged cash worthless. Though the regime loosened the restrictions from the $40 limit, the policy has still been unpopular. There was some rioting, even some fatalities, but Kim Jong Il and his machine appear to be committed to the measure.
At the same time, the government has announced it would shut down some of the larger private markets, which is how many people survive — the UN estimates that half the calories consumed in North Korea come from these markets. This foray into capitalism has been a pain in the regime’s ass for years, and as the current ruler explores ways to facilitate a handoff to his son, Kim Jong Eun, it’s a good idea to sort all this out. It’s unlikely that the latest Kim will receive a clean Communist state from which to rule, but that won’t stop the current boss from trying.
It’s in these markets that you’ll find the implications of monetary policy for the travel market.The markets are fueled with goods from across the border in China, smuggled in by enterprising and daring North Koreans who are looking for anything from profit to the alleviation of hunger. To make these operations a bit harder, the government has increased border controls, not to mention restrictions on lodging. But, in a manner likely to draw praise from the TSA cause some head-scratching in the rest of the world, the regime has banned big suitcases. Ostensibly, this is to make it harder to smuggle goods into the country for sale in the markets.
You know … if you apply this measure to air travel in the United States, the outcomes would be pretty interesting. Let’s take a look.
The decision of whether to check your luggage or carry it onto the plane disappears. This is one of the most difficult challenges a passenger faces, and thanks to a decision rooted in North Korean monetary policy, it disappears. And, as an added bonus, it also renders any discussion about extra bag fees moot, since the carry-on/check-in decision isn’t relevant.
Have you ever watched with anger as a small person struggles with several big bags, holding up the line at check-in kiosks, security or even the damned Sbarro? With this policy, that wouldn’t happen any more. People would only be able to carry … well … what they can actually carry.
Look, I’m not a fan of the regime in North Korea, and the currency revaluation has had severe consequences — it’s no laughing matter. But, as with any serious situation north of the DMZ, some of the unintended consequences are absurd. A ban on big bags? How the hell do you get from a money swap to luggage? However twisted the road and unfortunate the consequences, it’s hard to hate an idea that would make air travel easier.