Pyongyang, North Korea - Three years ago the cult figure known as "Dear Leader" - Kim Jong Il - died after a 17-year reign exemplified by forced labour, executions, and deadly famine.

While Kim's oppressive policies have changed little after his son Kim Jong Un took power, there have been subtle but significant changes in North Korea. For decades the Democratic People's Republic of Korea (DPRK), as it is officially known, had been a country trapped in time.

Ageing concrete block-apartment buildings and military barracks have long defined the skylines of its cities.

But for the past three years, the country has experienced an intense makeover: sport complexes and entertainment facilities have opened, green-yellow taxis and double-decker buses cruise along the wide avenues, and ageing facades of residential buildings have been repainted in vivid green, orange and red.

Things, at least in Pyongyang, have changed a lot, the living standards have improved and people are much more at ease with foreigners. - Leo van der Velden, World Food Programme official in DPRK

In a popular supermarket chain, H&M clothes are sold and women wait in long queues while texting on their mobile phones.

In downtown Pyongyang, smartly dressed women frequent the upmarket cafés and restaurants of the city.

"Luxury" items have also started to appear. At the Sunrise Café and Bakery, a cup of Lipton tea costs $5 and an Italian cappuccino $8.

On the ground floor of the same building, a chef dressed in white, prepares lunch boxes of sashimi that are sold next to a selection of French cheese and Italian salami.

"Things, at least in Pyongyang, have changed a lot. The living standards have improved and people are much more at ease with foreigners," said Leo van der Velden, former deputy director of the World Food Programme (WFP) in DPRK, told Al Jazeera.

"Even our Korean co-workers, all seconded by the government, gradually opened up and started forming true colleague relationships with internationals. WFP's contacts with the DPRK government have also become stronger and are in much better terms than in many other countries."

Leisure activities

Sundays are an official day off, but North Koreans traditionally participate in collective labour efforts such as paving sidewalks, gardening public spaces, or planting fields. Over the past couple of years, a more relaxed approach has resulted in a growing number of people engaging in leisure activities rather than collective labour - at least in the major cities.

Street food stalls have sprung up in Pyongyang along the parks and popular department stores, such as the Kwangbok "Chinese" eating area where vendors put out plastic tables and chairs for customers, an affordable alternative for those who could not frequent the upmarket downtown restaurants.

The average Korean family relies heavily on the underground network of markets to access food and consumer goods. Markets, which developed out of necessity during the famine of the 1990s, are becoming an increasingly important source of food, especially when the Public Distribution System fails to supply people with sufficient quantities of cereals.

De facto private ownership over productive means has emerged. Most North Koreans earn their basic living through informal trade. And for those with strong entrepreneurial skills and connections, informal trade presents a unique opportunity to accumulate wealth and climb the social ladder. But it has also widened the gap between the haves and the have-nots.

Since 2005, the government has sought to restrict market expansion and consequently people's wealth.

The markets have grown to a point that the leadership has apparently begun to feel threatened.

The crackdown of 2009 - when two zeros were lopped off from the won and people were given less than a week to exchange all their old notes for new ones - was a direct blow against those who had started earning a few too many won.

The limitations on the amount that could be exchanged have wiped off years of earnings, pushing many into bankruptcy.

Aggravated relations

Officially, the measures were introduced to fight inflation; in reality it was a way to control the informal trade.

But the measures did not have the anticipated effect. People, who had experienced famine and had turned to markets for their survival, were not willing to abandon their safety net.

The currency "reform" sparked panic and aggravated relations between the government and society. A few months later, for the first time in the history of the DPRK, a public apology was issued for disruptions to the economy and two high-ranking officials were executed for the crisis.

Andrei Lankov, professor of Korean Studies at Kookmin University of Seoul, said until 2010, the government had been trying to get rid of the private economy and return to the old Leninist economic model.

"These efforts ended in failure and after 2010 the government decided to leave the economy alone. However, it still stubbornly refuses to recognise the new economic reality and admit that North Korea nowadays is, to a very large extent, a market-based economy," Lankov said.

But informal trade has become the backbone of the economy; it helped create and expand the middle class, it has widened the social gaps but it has also secured the survival of the less fortunate.

Alongside the economic advance of the middle class, which remains highly vulnerable to changing government policies, came an increasing taste for luxury.

The continuous flow of Western goods, the construction of water parks and resorts, fancy restaurants and 3D cinemas could be interpreted as ways for the leadership to ensure a controlled loyalty of the middle class by making Pyongyang an attractive alternative to other cities abroad.

Pyongyang gaps

However, not everyone has benefited from the makeover.

A fruit seller turns her head to avoid being photographed in Pyongyang [Fragkiska Megaloudi/Al Jazeera]

In the shadow of new apartment blocks, deeply potholed streets surround faded concrete buildings that are between 20 and 40 stories tall.

Although the power supply was improved after the construction of the Huichon Power Station, blackouts are frequent.

Apartments are drafty and residents cover their windows with plastic sheeting to endure the humid cold. At night, the trembling light of torches shines through apartment windows.

"The visible rise of a consumer culture does not mask the deep poverty of many North Koreans in both the city and the rural areas," Emma Campbel, a visiting fellow at the Australian National University's Korea College, told Al Jazeera.

"Housing might look acceptable, built with brick walls and tiled roofs, but most have polythene rather than glass window panes, and this in a country where temperatures reach well below zero in the winter," she said.

"These visible signs of poverty reflect the international data on North Korea's per capita GDP that places it among the world's poorest countries."

Left behind

Although the government claims 99.9 percent of the population has access to improved water sources, the public water network is highly unreliable. Water cuts are daily and last from a few hours to several days. Corroded pipes often burst in the capital and children with plastic bottles run to collect water.

During winter months, one can see in Pyongyang elderly women collecting buckets of snow, which, once melted and boiled, can be used for cooking and drinking.

North Korean leader Kim Jong Un jokes with officials [EPA]

In the heart of Pyongyang, clusters of humble houses share a common garden and an outdoor shack functions as a toilet.

Corn and red peppers dry on the pavement and the air smells of fresh garlic, earth and human waste. In the mornings, thick black smoke coming from metallic pots placed outside the houses makes the air unbreathable, and the eyes watery and sore.

Women prepare small round coal briquettes for the day's cooking. One briquette would allow an hour of cooking and two or three placed in built-in spaces in the kitchens could heat one room.

Life might be tough for those North Koreans left behind, but the tide has turned in DPRK: change is already here. What is left now is to see how long it can be sustained.