Stalls selling fruit and drinks represent a small step towards private enterprise in North Korea

PYONGYANG, North Korea (CNN) -- Struggling to overcome nearly a decade of negative economic activity, North Korea is showing small signs of a potential embrace of private enterprise.

Rigid socialist central planning, the collapse of the Soviet bloc and a series of natural disasters have produced eight successive years of negative growth for North Korea.

On the streets of the capital, visitors see the first signs of economic reform.

Fruit and drinks can now be purchased from vendors in Pyongyang.

If you don't think that's a big deal, consider this: For the first time in North Korea's history, the stalls are run by neighborhood groups rather than controlled by the state.

You also can find roadside peddlers selling cigarettes and snacks and vendors offering to take pictures of tourists.

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The urban markets are small but significant steps toward private enterprise in a society where citizens have been trained since childhood to function as part of a socialist collective.

The change can be seen in the countryside, too.

Diplomats say that in the rural areas now, peasants who fulfill their quotas for the state can keep 20 percent of what they grow to sell on the free market.

In a further sign that the government may be easing its hard-line socialist economic views, the North Korean Parliament this month approved constitutional amendments allowing non-state ownership of some factories and welcoming international investment.

Kim Jong Il

North Korean leader Kim Jong Il also has added new faces to the ruling elite. Two-thirds of the current Parliament and just-appointed Cabinet are new to their offices.

CNN's Mike Chinoy, after an exclusive reporting trip to the communist nation, says government officials now speak openly about the old guard of revolutionaries leaving their posts.

North Korea's changing atmosphere has led some analysts to speculate that a smooth transition to Kim's leadership, and the nation's lingering economic plight, may generate more movement toward reform.

Related stories: Nuclear suspicions shadow U.S., North Korea talks - August 24, 1998 Clinton pledges to support Kim's attempts at reforms - June 10, 1998 North Korea agrees to resume armistice talks - June 9, 1998

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