Archive for the ‘Civil society’ Category

A crackdown on the North Korean market economy?

Tuesday, December 1st, 2020

By: Benjamin Katzeff Silberstein

(This is a rather long post with two parts: the first analyzes some recent events suggesting a government crackdown against the market economy, while the second recaps the some recent events within this trend. For readers interested primarily in the latter, I suggest scrolling down to the subheading “The events: a brief recap” below.)

Is the North Korean government cracking down on the market economy as such?

I would argue that we are not quite there yet, but an ever-increasing number of news seem to be suggesting that economic policy may be going in this direction. It’s also entirely possible that there is in fact no coherent strategy. One should not overestimate governments in general when it comes to coherence – this is nothing unique to North Korea. Nonetheless, these developments are crucial to keep a close eye on.

This post goes through some of the most central developments over the past few weeks below, but in short, some of these events are:

  • the general rhetoric and personnel politics from Kim Jong-un over the past year or so, repeated statements from high official organs about the need for economic control (most recently in a politburo meeting on November 30th),
  • the crackdown on foreign currency use and the reported execution of a foreign currency trader,
  • a reported change in the management of general markets to greater centralization and direct state control,
  • and last but not least (for now), an amendment to the enterprise law, effectively placing a common form of private enterprise under state scrutiny and administration.

This list is by no means exhaustive. For example, North Korean academic journals, often good proxies for what’s cooking in the policy circles, have repeatedly emphasized the need to “create an administrative system” since late last year. In North Korean parlance, this is likely code for increased state oversight and control. (Hat-tip to my good friend and colleague Peter Ward, perhaps the most thorough and dedicated researcher of North Korean journals in the analyst community.)

As I write more about in a forthcoming article for 38 North, the state has placed a high priority on reigning in – and at the very least, governing and administering – the market economy for some time, and with heightened intensity since the 2019 December plenum in particular.

There may, however, be more to it. There still is not sufficient evidence to conclude that the state is actively trying to stomp out markets or market mechanisms as such, but it is a possibility.

First, a basic question: if there is a general crackdown going on against the market economy, what would be the purpose? Again, no one knows, but one can speculate about a few different possibilities.

Perhaps most basically, North Korea is still, at least nominally and theoretically, a communist state with a centrally planned economy. Legally, private property does not exist. There has yet never been an official, explicit, major break with this model. We have often taken the state’s reluctance to crack down on the markets, and indeed, its occasional embrace of market mechanisms, as tacit acceptance that they are in the North Korean economy to stay. Maybe this assumption was wrong all along, or maybe things have changed over the past couple of years.

On the same theme, let’s not forget that North Korea’s political and social system is highly totalitarian. It is only natural that it would tend towards greater control, ultimately aiming to either eradicate or (more likely) tame groups such as the donju and integrate them into the official system. Economic reform and liberalization will always be potentially threatening, as they expand a sphere beyond state control, whether it be in the economy or society overall. Perhaps the North Korean leadership thinks the limit has been reached and it is time for a general rollback.

There may also be a pragmatic purpose to it all. As I have argued before, growing resource scarcity is a likely driver for increased economic control by the state. This is perhaps the most charitable and optimistic reading, as it suggests that the trend may one day be reversed.

Whatever the case, this is all troubling. The state and Kim Jong-un personally may very well be overestimating the capacity and potential of the state economy as an alternative to the market sphere. North Korea is a state with relatively capable governance in some areas, but with a very low capacity in others. Quite likely, the state simply has little grasp of the size of economic activity, and little overview of what this activity consists of. (See, for example, this recent report by Daily NK about a general survey of firms and enterprises leading up to the Party Congress in January 2021.) The border closure due to Covid-19, among other examples, shows that the state is prepared to accept a high degree of suffering among the general public for the purpose of social stability.

The events: a brief recap

The latest data point came a couple of days ago, at the latest of a staggering eleven politburo meetings this year. The KCNA summary contains two highly concerning paragraphs (my emphasis):

”The meeting discussed and studied as key agenda items the issue of hearing a report on the preparations for the 8th Congress of the WPK and taking corresponding measures, the issue of reorganizing a relevant department mechanism of the Party Central Committee to strengthen the field of the Party ideological work, to more thoroughly establish the Party’s leadership system in relevant institutions and to intensify policy guidance and Party guidance over them and important issues of improving the Party guidance over economic work and carrying out immediate economic tasks. Then decisions were made on them.”

And:

”The Political Bureau of the Central Committee of the WPK harshly criticized the economic guidance organs for failing to provide scientific guidance to fields under their charge under the subjective and objective environment and the prevailing conditions, and for failing to overcome subjectivism and formalism in their work. It stressed the need to put the operation and command for carrying out the Party’s economic policies on a scientific basis and display great dedication and responsibility.”

 

(Source: “Enlarged Meeting of 21st Political Bureau of 7th Central Committee of WPK Held,” Korean Central News Agency, November 30th, 2020.)

This comes against the backdrop of several similar statements from the politburo and other organs through the year and, not least, worrying measures, such as the reported execution of a foreign currency (among other measures) trader amid a strange appreciation of the won against the US dollar. Maeil Kyungje:  

“코로나19 확산에 위기감이 높아진 김정은 북한 국무위원장이 `비합리적 대응`을 하고 있는 것으로 보고됐다. 방역 위기에 경제적 어려움이 겹친 상황에서 환율 급락을 이유로 평양의 환전상을 처형하고 바다에서 어로와 소금 생산을 금지하는 등 무리한 조치를 취하고 있다는 것이다.

국회 정보위원들은 27일 국가정보원에서 최근 북한 동향을 이같이 보고받았다고 밝혔다. 정보위 야당 측 간사인 하태경 국민의힘 의원은 “김 위원장이 과잉 분노를 표출하고 있으며 상식적이지 않은 조치를 내놓고 있다”고 평가했다. 이날 국정원 보고에 따르면 김 위원장은 지난 10월 말 `평양의 거물 환전상`을 처형했다. 북한 내 환율이 최근 들어 급락했는데 이에 대한 책임을 물어 비공개 처형했다는 것. 북한은 외화난이 상시화했지만 국경 봉쇄로 외화 수요가 줄어 환율이 급락한 것으로 보인다. 하 의원은 또 “바닷물이 코로나19로 오염되는 것에 대한 우려 때문에 (김 위원장이) 어로와 소금 생산을 금지했다”고 말했다.”

(Source: Park Jae-wan, “Kim Jong-un executes foreign currency trader amid plunge in exchange rate,” Maeil Kyungje, November 27th, 2020.) See this Financial Times article for an English-language summary of events.

And then there’s the recent sudden appreciation of the won. Bill Brown explains this well here. It is, however, part of a broader push for people to use less foreign currency. There could be a whole host of reasons for this move, one of which could be to drive more of it out of circulation and into state hands. We still know too little to draw any firm conclusions.

Daily NK also reported a couple of weeks ago about new measures to centralize control over general markets under Party control. The report did not suggest direct measures to curtail market activity per se, but this may well be the consequence should the measure be fully implemented, with more red tape and central management further from the ground.

North Korea’s KCNA recently ran an article about two bills adopted by the Supreme People’s Assembly. One of them — a ban on smoking in certain areas — got quite a bit of attention, which lighter news from North Korea often does. The second one — an amendment to the country’s enterprise law — is, however, potentially much more significant, and could significantly curtail and hamper private business activity in the country. Here is what KCNA (5/11/2020) said about it:

”The amendments and supplements to the enterprise law newly point out such matters as of turning enterprises into labour-, energy-, cost-, and land-saving ones and making their employees patriotic working people who possess the spirit of economy as part of their mental qualities.

They also refer to the regulations which all the units must observe when organizing new enterprises or when changing their affiliations and those designed to ensure that production and business management are done on socialist principles under the unified guidance and strategic control of the state.”

Now, these few sentences reveal relatively little about what this could all mean in practice. Daily NK reported a few days later, however, that the government aims to centralize control of small business usually operating illegally, known as “kiji”, under official SOE frameworks. Corruption is certainly problematic in general, but given the fact that a massive proportion (or most) of private business in North Korea operates under frameworks that are technically corrupt, the ambition to strengthen government oversight may have serious adverse consequences. (For more on the “kiji” system, see this excellent journal article.)

In conclusion, it is too early to tell what the regime’s end goal is with these measures. At the very least, we can conclude that the state aims to lay more of the economy under its control and management. That is of course a central end goal in itself.

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Taxes increase on some North Korean markets

Friday, May 3rd, 2019

By Benjamin Katzeff Silberstein

This sort of news is very interesting, particularly in context: I’ve heard from people who deal with North Korean firms that some of them have received orders to tighten up their accounting, and report their assets to the state in greater detail. Taken together, these snippets of information suggest an overall difficult economic situation, though not desperate or in crisis-mode, where the state is taking more and more measures to drive in cash from the public.

Daily NK:

Sales fees levied on private distributors have risen in some areas of North Korea. The fees are managed by North Korea’s collection agency and essentially provide a source of tax revenue for the state. Private distributors are expressing discontent over the changes as many are suffering under the country’s already poor economic conditions.

“The authorities recently began demanding outrageous and unfair selling fees from private distributors,” said a South Pyongan Province-based source on April 25. “Collection offices (i.e. tax offices) attached to local people’s committees are required to pay varying fees depending on the product, and the number of fees have been doubled.”

These de facto tax offices were established in each city and county as part of the July 1 Economic Management Improvement Measure in 2003 and are managed by the Ministry of Financial Administration. The offices collect fees for land use, market stalls, and various other reasons.

“The authorities are demanding a huge amount of fees to gain control over and restrict the activities of private business people who live in Pyongsong but bring in products from Sinuiju, Rajin-Sonbong, Nampo and Hyesan,” said a separate source in South Pyongan Province.

“Soybean oil sellers, for example, had to pay 3% of their income before, but now have to pay twice that amount.”

The skyrocketing fees are likely due to the fall in tax revenue arising from the economic difficulties the country is facing.

“The government increased the fees they were collecting just as incomes fell among private business people,” she said. “The authorities are simply taking money from the people to make it seem like the state is self-sufficient.”

North Korean authorities have made the fee system more sophisticated while raising fees as part of efforts to generate more income for the regime.

Article source:
North Korea doubles de facto sales tax levied on distributors in some areas
Mun Dong Hui
Daily NK
2019-05-03

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Why the market and state sectors cannot be fully separated in North Korea (and what it tells us about price stability)

Friday, April 19th, 2019

Anecdotal but highly valuable observations from inside North Korea suggest that the market economy is taking a hit from the overall decrease in economic activity in the state sector. None of this is surprising, and it makes perfect sense. As workers at factories and state enterprises either get paid less or not at all, their purchasing power drops. Fewer people can spend less money on the markets, leading to an overall depression of economic activity. Reports Daily NK:

Following news that most state-run factories in Pyongyang and other major cities have suspended operations, North Korean sources report that the number of merchants in some areas of the country have fallen drastically. This situation is reportedly due to decreased purchasing power among ordinary North Koreans on the back of the country’s economic stagnation.

“Before international sanctions, there were around 1,000 to 2,000 merchants, including those selling their wares outside the market, but now I only see around 100,” a South Pyongan Province-based source told the Daily NK on April 10. “Even those remaining merchants are just barely holding on. Some of them went to other places to do business but had to return because their efforts met with no success.”

“Only half of the market officials that once collected market fees are visible now,” said the source. “The officials face physical harm by the merchants when they try to collect the fees, so they avoid being out in the open.”

The source also reported that “Merchants have to sell 15 kilograms or more of food per day to pay the market fees. They aren’t selling even one kilogram a day” and that “Merchants are asking themselves rhetorically whether they’re just selling wares at the market to pay the fees.”

An investigation by the Daily NK has found that there has been little change to the number of active merchants in Pyongyang, Sinuiju, Hyesan, Pyongsong, Chongjin, Hamhung and other major cities. Small markets, however, appear to be facing a decrease in merchants.

The source said that economic stagnation has impacted North Korea’s poor classes, including those living in agricultural areas.

“The factories are shut down so people can’t get paid, and this means that no one is heading out to the markets,” said the source. “The international sanctions are so bad that there’s no work left. People don’t have money to buy anything.”

This all gets at a problem with analyzing North Korea’s economic situation based on price stability. Simple analysis of supply and demand holds that if overall availability of food goes down, prices go up. They haven’t in North Korea.

But what if people just don’t have money to spend on food if prices go up? Then, market suppliers couldn’t really raise prices much, because they’d already be pretty much at the highest level at which people are willing to purchase food (also known as the “reservation price”). It’s also important to remember that cash, according to a lot of anecdotal observations – and suggested by the state of the exchange rate – is generally rather scarcely available in North Korea, as the government seems to have contracted the money supply quite significantly over the past few years.

This is what I suspect is part of what’s going on the markets in North Korea, and some may have looked much too simplistically at food and currency market prices for a long time. Price stability doesn’t necessarily mean a lack of problems in the economy.

Article source here:
Drastic fall in market merchant numbers in some areas of North Korea
Mun Dong Hui
Daily NK
2019-04-18

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A few thoughts on North Korea’s harvest numbers

Friday, March 8th, 2019

By Benjamin Katzeff Silberstein

I unfortunately don’t have time to do as deep of a dive into the different numbers going around on North Korea’s harvest as I’d like, but a few short thoughts:

  • The numbers are confusing, because there’s a whole bunch of different ones being cited. The UN (citing North Korean government figures) puts the harvest at 4.95 million tonnes, while Hazel Smith cites 3.2 million tonnes. I suspect that part of what’s going on is that some figures refer to total food production estimates, while others refer to the milled cereal equivalent, the most common measurement for actual food availability by international humanitarian organizations. But that can’t explain the full difference at play here since it’s simply too large. (For reference, see this WFP-report from 2010.)
  • The vast differences in numbers cited is a big impediment to really getting a grasp of how bad the situation seems to be. If the 4.95 million tonnes-figure refers to unmilled cereal production, it represents a significant drop from the past few years, but not one that would necessarily indicate a return to the famine-level supplies of the 1990s. If it refers to milled cereal equivalent numbers, which I don’t believe it does, it’s not that bad (milled equivalent production was reported at 4.48 million tonnes for 2011).
  • The reason that many may be suspicious about the claims of a bad harvest being exaggerated, is that it is an historical pattern on the part of the DPRK government. That doesn’t mean that this time isn’t different. The past may be a good indicator for the future, but it’s never proof.
  • No serious assessment can be fully trusted as long as it fails to take the market system into account. That the UN is unable to survey and study food supply from the markets, and their contribution to resiliency in food supply, is a massive problem. That’s surely not for a lack of attempts on the part of the WFP and other organs to get to visit markets. I’m sure they repeatedly press the North Korean government on this, thus far, to my knowledge, to little avail. Still, the magnitude of the drop in the production estimate still likely says something about the magnitude and direction of the dynamics of change on the markets as well.
  • Lastly, regardless of how things stand, North Korea’s humanitarian situation is precarious and very bad. While Kim Jong-un has spent much of his tenure cutting ribbons at avenue renovations in Pyongyang, the population in almost half of the country’s provinces are estimated to lack access safe drinking water. This is a matter of priorities on the part of the government. In any case, for the purposes of humanitarian aid, in the immediate term, it doesn’t really matter whose fault the situation is. My skepticism of the numbers should not be taken as arguing that North Korean civilians shouldn’t receive aid; the humanitarian situation in the country, particularly in the souther provinces, is almost certainly more or less constantly bad enough to warrant it. This paragraph from Hazel Smith’s recent PacNet piece is particularly chilling, if these numbers are accurate:

The starkest confirmation of a catastrophic harvest in 2018 is the precipitous drop in output from the big food producing provinces. Between 2016 and 2018, South Hwanghae, the ‘granary’ of North Korea, had a 5 percent reduction in area planted but an enormous 30 percent decrease in output – with a 19 percent drop in agricultural output between 2017 and 2018.

 

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North Korea’s puzzling maternal mortality figures

Monday, February 4th, 2019

By Benjamin Katzeff Silberstein

South Korea’s Institute for Health and Social Affairs, using data from the UN Population Fund, claims that maternal mortality in North Korea has increased in the past few years, since 2008. (This was reported back in November of last year, but for some reason I only stumbled upon the article now.) I don’t have time to check out the data or the original source in question right now, but hope to later. It may well be Yonhap’s reporting that is off, because something sounds odd here (my emphasis in bold):

Amid the prolonged international sanctions on North Korea, the health of the North’s infants and pregnant women is in a very vulnerable state, a South Korean government think tank said Tuesday.

The Seoul-based Korea Institute for Health and Social Affairs said in a report that North Korea’s maternal mortality rate was 82 per 100,000 newborns, about eight times higher than the rate of 11 in South Korea, based on the United Nations Population Fund’s 2017 World Population Survey.

Of course sanctions likely have some degree of detrimental impact on the humanitarian situation in North Korea. But to blame current sanctions for what the situation looked like in 2017 – when most of the most effective, hard-hitting ones had just been put in place (or were not yet in place depending on when these measurements were done) is simply inaccurate.

The North’s maternal mortality rate marked a rise from 77.2 persons in 2008, the report noted. Maternal mortality rate refers to the proportion of women who die of pregnancy-related illness during or immediately after childbirth.

Source:
Report shows deteriorating health of N. Korean infants, mothers
Yonhap News
2018-11-20

It is surprising that data would show North Korea’s health situation declining from 2008 and nine years ahead, but there is actually quite a bit of other data, albeit from similar sources, saying the same thing. Again, I hope to take a closer look at some of this data soon, but for now, I’d say there are two possible conclusions one can draw from these figures.

The data may look this way because measurement methods and access got better, not because things on the ground actually got worse. UN institutions have gotten somewhat better access, in my understanding, since the earlier 2000s, and are able to survey places that could not be visited before. These may be localities where things are simply worse than in others, which may be why the government didn’t want to grant access in the past, leading to figures that are more accurate, but also show a trend that may not be consistent with reality.

The other alternative is that the recovery from the famine period, and economic growth of the past few years, has not been as consistent as often believed. (Update 5/2: It’s also possible that there simply hasn’t been any consistent path of recovery, but rather, that many indicators first improved vastly from the 1990s and early 2000s, only to decline again after a few years of an upward trend). Conditions are generally believed to have improved in the country as a whole over the past few years, and there is very little data to suggest otherwise. Institutional change combined with increased exports of natural resources, has spurred some degree of growth in the North Korean economy over the past few years, but we know fairly little about the degree to which different demographics of the population have actually seen their conditions improve. If maternal mortality has gone up while North Korea’s incomes from foreign trade have skyrocketed in relative terms, that would tell us something important about the distribution of economic gains.

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North Koreans swamped with state-mandated work after Kim’s New Year’s Speech

Friday, January 18th, 2019

Benjamin Katzeff Silberstein

Daily NK:

A source in North Hamgyong Province told Daily NK on Janaury 16 that “people are busy carrying out the social tasks that began earlier this year.” The tasks focus on manure collection and material support in an effort to boost production numbers in time for Kim Il Sung and Kim Jong Il’s upcoming birthdays.

“Members of the Socialist Women’s Union of Korea who conduct business in the markets rather than a formal workplace have to contribute a total of 1 ton of manure, or 150 kilos each per day,” she added. “Those working in companies have to meet their own manure targets of each collecting 10 kg of human waste, 30 kg of dog/cow/lamb or other animal droppings, and 50 kg of humus soil.”

If they fail to meet their quotas, they are forced to work night shifts. Many are having to continue working in their day jobs while also trying to meet their ‘manure battle’ quotas.

That being said, the total amount of manure authorities are targeting for collection this year is 200-500 kg (per adult). This marks a reduction from last year, and is a development that residents have expressed some relief about.

Even Socialist Women’s Union of Korea members are noting that the “situation has improved.” In the past, the government set quotas for specific types of manure to be collected, but this year it has only presented a total quota requirement. The government may be aiming to prevent any interruptions in the market activities of union members.

A separate source in South Pyongan Province said that while high school students were each given 300 kg and middle schoolers 100 kg manure collection quotas, elementary students were not given any quotas to fulfill despite previously being “unconditionally mobilized” into such drives in the past.

“Carrying sacks or backpacks, inminban leaders are going around and collecting two eggs and 7,000 won from each person within their districts for the manufacture of gifts to be handed out to children on Kim Jong Il and Kim Il Sung’s birthdays (February 16 and April 15, respectively),” he added.

In some cases in the past, residents would avoid opening their doors to the inminban leaders, anticipating that the officials were going to request donations.

Full article:
North Koreans swamped with “state-sponsored tasks” in the new year
Ha Yoon Ah
Daily NK
2019-01-18

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North Koreans react negatively to KJU’s speech, says Daily NK

Wednesday, January 16th, 2019

Daily NK reports on popular reactions to Kim Jong-un’s New Year’s Speech:

“It’s winter, but those who failed to prepare for it are not going to work nor are they going to any criticism sessions, lectures or study sessions,” a source in South Pyongan Province told Daily NK. “Workers’ Party of Korea (WPK) Organization and Guidance Department (OGD) and Propaganda Department officials are not sure how to respond to the situation.”

A lecture about nuclear weapons was recently held at a farm in Sunchon, South Pyongan Province, but only 80 out of the farm’s 500 employees attended. The lecture was held again the next day after another announcement, and then only 50 people showed up for it, according to the source.

Daily NK reported in November that the North Korean authorities had begun holding lectures to commemorate the first anniversary of the state referring to it as the “day nuclear weapons were completed” and emphasize Kim Jong Un’s achievements.

According to a December 2018 article in the Rodong Sinmun, the Party Committee of the Jagang Province’s Forestry Management Department held a “commentary” and a “very emotional propaganda speech” to encourage logging during the winter, while Jagang Province’s Usi County held a number of ideological and political activities aimed at showing off the superiority of the North Korean state and encouraging greater production.

It is rare for North Koreans to deliberately avoid attending lectures held by the WPK’s Propaganda and Agitation Department in such numbers. The situation may be partly due to the fact that many factory and farm workers pay fees in order to avoid official work duties assigned to them by the state.

Fees can be paid to receive an exemption from work, allowing citizens to conduct their own private business activities. The practice took off after state-run companies and other organizations became unable to pay proper wages. Private business activities can rake in significantly more money than official wages.

Moreover, North Koreans who actually attended the lectures reacted negatively to them, saying that the lecture content is out of touch with reality.

“Those who attend the lectures don’t really listen to what’s being said – rather, they just talk about their own business and concerns about getting food and surviving the winter,” said a source in Ryanggang Province. “The lectures about nuclear weapons are so far from what concerns people that no one even listens to what’s being said.”

Article source:
Many North Koreans react negatively to state lectures
Mun Dong Hui
Daily NK
2019-01-16

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Popular mobilization for manure collection in North Korea

Tuesday, January 15th, 2019

Daily NK reports that large-scale mobilization is underway in North Korea, for citizens to gather manure for agricultural use:

The North Korean authorities have launched a new “battle” to support the aims of Kim Jong Un’s New Year’s Address, and are moving to restrict residents from engaging in private business.

The country held a massive rally on January 4 at Kim Il Sung Square to garner support for the aims set out in the address. Another rally was held outside Pyongyang where Kim Jong Un pledged to continue North Korea’s economic development.

“The government decided that the first ‘battle’ of the New Year in support of Kim Jong Un’s address was to be held from January 4-10,” said a Ryanggang Province-based source on Sunday. “Orders for the battle were handed down on January 5 and mobilization began thereafter.”

The new battle focused on the annual drive to collect manure (including night soil) for biological fertilizer from farms in the country’s agricultural regions, while city residents focused on improving their collection rates. The “manure collection” in rural areas also involved organizations and people from the cities.

In an effort to ensure that an atmosphere of total mobilization was created, local police actively restricted freight trucks, vans and other vehicles transporting goods and people from driving on the streets during the course of the battle.

“The authorities threatened to send private business people violating the order to disciplinary labor centers (rodong dallyeondae),” a source in South Hamgyong Province reported.

Local provincial governments generally engage in “battles” at the beginning of each year in tandem with the annual New Year’s Address, but it’s unusual for the whole country to hold a battle for an entire week.

Full article:
North Korea’s population mobilized for manure collection
Kim Yoo Jin
Daily NK
2019-01-15

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North Korea spent two million dollars on surveillance equipment

Monday, December 3rd, 2018

Benjamin Katzeff Silberstein

The spread of cell phones in North Korea, rather than being a catalyst for a Pyongyang Spring, is likely giving the regime more means and channels for surveillance. Daily NK reports:

The North Korean regime imported a large shipment of mobile phone wiretapping devices from China in May, local sources have reported.

“The authorities bought new electronic wave interruption devices and mobile phone wiretapping devices in May this year. The cost of the equipment was around 15 million yuan (2.45 billion South Korean won), according to a Ministry of State Security (MSS) official that I talked to,” a source in China close to North Korean affairs.

“The MSS official also told me that the equipment will be supplied to cities on the Sino-North Korean border, starting from Hyesan, Ryanggang Province, and then to Sinuiju, North Pyongan Province, and other cities. The cities are probably filled to the gills with high-quality electronic signal interruption and wiretapping devices now.”

Daily NK recently reported that North Korean law enforcement officials have installed new mobile phone wiretapping devices on the Sino-North Korean border to monitor international calls.

A number of residents calling relatives in South Korea have been arrested, and the MSS has demanded money from their family members in South Korea in return for their release.

The North Korean authorities have strengthened surveillance and wiretapping activities to prevent North Koreans who have access to outside information from sparking unrest in the country. These efforts have become particularly pronounced recently as inter-Korean relations have improved. Ultimately, the authorities want to prevent sensitive domestic information regarding denuclearization and nuclear development plans from leaving the country.

“For North Korean officials who depend on the regime staying in power, they know that the ‘information war’ with their own citizens and the international community is important and are set on preventing things from going in an undesirable direction,” one expert told Daily NK on condition of anonymity.

A separate source in Pyongyang also reported that MSS officials who misappropriated some of the funds used to buy the new equipment were purged.

“Several MSS officials were purged after it was found that they bought cheap equipment and embezzled the rest of the money. Another team of MSS officials had to go to China again to buy better equipment,” he said, adding that the officials who misappropriated the funds faced punishment after the equipment they bought did not operate as intended.

Article source:
North Korea spent $2M on surveillance and wiretapping equipment in May
Kim Song Il
Daily NK
2018-12-03

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How should we understand North Korean market crackdowns?

Thursday, November 8th, 2018

By Benjamin Katzeff Silberstein

Daily NK reports (in Korean) that a “inspection unit against anti-socialist activities”, is active on Hyesan markets, inspecting goods and confiscating ones deemed either illegally smuggled in from China, or harmful for people’s health, such as narcotics. Such “units” (“그루빠”) are fairly common in North Korea, and typically consist of officials from various public security agencies cooperating to get at a specific, problematic tendency in certain areas or spheres of society.

We’ve seen quite a lot of news over the past few months, and even years, of market crackdowns under Kim Jong-un. On the one hand, this is simply the North Korean state apparatus being itself, and cracking down on “deviant” behavior such as smuggling, and trading of a range of, likely often arbitrarily, forbidden goods, and not least foreign media and information. Unsurprisingly, the agents conducting these searches tend to often quietly disappear if given the right amount of cash or cigarettes:

소식통은 “이 단속 그루빠는 장사꾼들에게 여러 트집을 잡지만 결국 돈이나 담배를 받으면 몇 마디하고 슬그머니 물러난다”면서 “갑자기 그루빠들이 열을 올려서 주민들은 ‘무슨 꿍꿍이가 있느냐, 돈벌이를 하려는 것이냐’며 불평을 한다”고 전했다.

On the other hand, however, one could see this as a process of the state making the market more regularized and based on rules. Kim Jong-un seems to appreciate the stability and wealth brought by the markets, and has worked to integrate them further into the regular economic system. Clamping down on smuggling and trade deemed unsuitable from the state’s perspective, in a way, is part of this process. Clampdowns like this, in a way, seem to go in parallel with increasing regularization of market trade, through the permit regime, designated market buildings, and the like. The North Korean government’s acceptance and institutionalization of the markets has never been driven by an ideological commitment to free-market liberalism, but rather, by the opposite: aspirations for stability, and greater economic control.

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