North Korean Economy Watch

Dail y NK
Park Choel Yong
3/26/2007

Even in Pyongyang, entering into a top university is like picking a star from the sky. Not only must you be an A+ student, your family record must be clean.

Growing up in an ordinary family, I was luckily accepted into my preferred university based on my abilities. On receiving my results, I thought that I could achieve anything in the world. However, my sweet dream did not last long. Soon after beginning my tertiary studies, I felt as if I had gotten a big splash on the face. The reason being, marching parade training.

Three days into the semester, I was selected to participate in the marching parade, where the saying, tertiary students once “normal people become stupid” referring to post-training for the marching parade, became a reality. When people think of a marching parade, they think of school parades in South Korea. However, the marching parade in North Korea resembles a years worth of rigorous military training.

In North Korea, participants of the marching parade include students, workers, the military and average citizens who are trained for celebratory events such as Kim Il Sung and Kim Jong Il’s birthday, the anniversary of the establishment of the People’s Army and the Worker’s Party. The audience? Kim Jong Il. For the mere pleasure of one man, Kim Jong Il, hundreds and thousands of people must spend every day of the year working their bodies until exhaustion.

There is one criteria in which university students are selected for the marching parade and that is height. Students gather and their height examined. Compared to others, I was not short. I was also a freshman and so was instantly selected to participate in the marching parade. Occasionally I had seen the marching parade on television but was completely unaware of the intense and arduous training that awaited me.

Our university was assigned to one battalion. There are 12 lines in each battalion and 25 people in each line. The tallest person stands at the head of the line with the shortest at the end.

Elite officials excluded from training

A commander is responsible for each battalion, followed by the political commander and civilian commander. Next is the captain and political captain followed by the line leader, group leader and secretary. Each line is divided into 3 groups with the group leader in charge. This exclusive role normally goes to students in their 3rd, 4th year. Other students in the battalion who are not assigned to such jobs are mostly freshmen.

On the first day of training, many of the students gathered around laughing and talking, “Do you think the Great Leader will really come to see our parade?” However, the following day, a handful of people began to drop out.

At the time, we thought that these people had legitimate reasons for being unable to partake in the training. Only to soon discover that those people had been closely affiliated with elite officials who gave a common excuse that they were physically ill. Ultimately, the selection process which entailed measuring height ended with a group of freshmen and poor students living in the dorms from the country.

Each battalion is represented by one university. Students who are selected for the marching parade attend lectures in the morning and then training in the afternoon. After spending an afternoon training on a dirt field amidst dirt, your mouth practically becomes a small clusters of dirt itself by evening.

The first stage of training is warm-up and stretching. Every day, we had to replicate positions made by professional performers and showcase our days training. If we were unable to succeed in doing this, training continued.

During the first month, we trained on the university fields, but in the second month, we began training at the Juche Statue Education Square and here is where students began to show symptoms of arthritis. Unable to restrain myself from lack of sleep during class, I was frequently scolded by the lecturer and the number of patients increased. Regardless of how ill one was, strict punishment awaited those who missed training.

Wanting to smash the street lamp at Juche Statue

Every day, training began at 2PM and usually finished around 7PM. Once training was over, battalion commanders came and gave lectures. People who are late to training, people who participate in training disrespectfully and people pointed out throughout the training are severely criticized. Once the lecture is over, smaller, tutorials begin.

Naturally, tutorials aren’t any better. The tutor or divisional commander closes the lecture by stressing the importance of being on time and participating sincerely in the training. The lectures normally last an hour and half, but this does not mean that the day’s training is over.

The students criticized in the lectures must undergo re-training. There has never been a time where the street lamp at the Juche Statue has been more spiteful. The thought that training would end if only the lighting was lost would not escape my mind. Whether or not someone was looking we did not care. We only wanted to smash the street lamp.

When training is finished, exhausted students are finally dismissed and another 30~1 hour walk back to the dorms awaits them. There are no buses at that hour and so students do not have an option but to walk home. As for dinner, meals have long been served at the dormitories.

Daily NK
Kim Song A
3/23/2007

A North Korean missionary organization revealed that about 1,000 undergrounds existed in North Korea, totaling 135,000 members nationwide.

In an interview with Radio Free Asia (RFA) on the 21st, Pastor Issac Lee of Cornerstone Ministries International, a Korean-U.S. missionary based organization said, “About 100,000 people (North Korean Christians) are being detained in prisons or are unknown, but about 35,000 North Koreans are accessible to the Cornerstone.”

Pastor Lee said, “When I visited a U.S. missionary organization in 1984, they already had a list of 3,500 names and addresses” and estimated, “There will most probably be about 1,000 underground churches in North Korea today.”

He said, “Rather than arresting spies, greater focus is placed on capturing Christians” and explained, “It is estimated that approximately 20,000 detainees are being imprisoned in North Korean gulags. Some reports have suggested that more than half these prisoners have been detained for religious reasons. Other reports claim this figure to be at least 10% or 20,000 prisoners in custody.”

Additionally, he said, “There is a large number of Christians who die in the gulags or experience greatest torture as they are the ones to express their faith.”

Regarding the Bongsu Church and Chilgol Church created by North Korean authorities, he said, “I do not doubt that these churches are mere puppets fabricated by the North Korean government…It is a controlled show by the Chosun Christian Alliance to fill the spaces in this movement.”

Since 1985, Cornerstone Ministries International began its missionary movement in North Korea and has been sending revised version bible in simple North Korean, as well as spreading pamphlets and fostering for greater awareness of the real situation of underground churches in North Korea.

Daily NK
Kim Young Jin
3/23/2007

Many North Koreans are saying that making money is different to the past. With the sudden wave of North Korea’s Jangmadang (integrated markets) spreading throughout the nation and with the whole population diving in trade, competition is soaring high. Individualism has intensified so much that the average person openly remarks that family and friends mean nothing when it comes to money.

In mid-March, Kim Jae Chun (pseudonym, 42) of Musan, North Hamkyung province, went to visit his relatives in Yanji, China. He said, “Nowadays, you cannot make a profit by operating small-trade… Selling goods has become tough as there are so many vendors now, even around the areas of Jangmadang, though their stores may not be legitimate.”

Kim’s wife sells rice nearby the Jangmadang in Musan. Up to a year ago, she would easily sell 10kg of rice. These days, she is lucky to sell even half. Normally, 100won (10% of the rice) remains as profit after selling 1kg of rice (1,000won). Simply put, Kim’s wife income has reduced from 1,000won to 500won.

Kim said, “People who own large-scale businesses sell expensive products targeting the rich or elite officials. Though these goods are different, nowadays, it has become hard to make money with rice, noodles or by selling a couple of clothing items.”

Nonetheless, Kim did agree that some business was better than no business. At the least, trade meant that you would not die of starvation.

He explained, “If you want to earn big cash at Jangmadang, you need to possess goods with greater value. If you want to earn even more money, people say, go to the integrated markets.”

“Lately, as people become experienced in trade, the more they are becoming obnoxious. Maybe it’s because they only think about money, it seems like a battlefield. There are even cases where friends and family become distant or ignored altogether. Why should we help each other out they argue since everyone has it touch,” he said.

When inquired whether or not relatives neglecting each other was an incident which had started during the food crisis, Kim responded, “Back then, it was because people really didn’t have anything. The problem is that today, people are not willing to help, even if they have something to share. People neglecting one another during the times where distributions were terminated is different to people who now only think about money.”

Lim Gil Man (pseudonym, 44) who had traveled with Kim from Chongjin agreed with Kim. He said, “In the past, people acted the way they did because they were starving to death. Today, people either stick by others with power or engage in corruption, with more and more people focused on making money.”

“Despite this, selling itself is not so bad. Compared to the times where we were all poor, at least now since there are some rich people, we can sell goods, and we have come to live more independently.”

As competition increases between North Koreans, it is expected that profits will continue to decline. The general populace of merchants trading in the North Korea-China region suspect that unless North Korean authorities propose reform measures to control the spread of markets, this wave of marketing will produce negative effects, with the possibility of rising antagonism amongst the people.

Daily NK
Kwon Jeong Hyun
3/21/2007

A North Korean restaurant “Pyongyang-kwan” in China is facing a similar predicament as another restaurant in the same area “Pyongyang Moran-kwan,” where a female employee “Lee” was repatriated back to North Korea last October having been arrested for fleeing the restaurant. As a result, North Korean authorities made the restaurant accountable and repatriated all the employees back to North Korea, which inevitably led to the restaurant closing its doors.

In 2000 also, some female employees fled a restaurant “Pyongyang” in Yanji. As a result, the business was terminated and has yet to restart operations again.

The majority of North Korean restaurants located in China are run by entrepreneurs who have signed a contract with North Korean authorities. While the Chinese are responsible for business and property lease for the restaurant, North Koreans bestow the female workers and extract 40% of the net income.

As more and more waitresses break away from restaurants, North Korean authorities are continuing to withdraw the remaining restaurant employees, as is their custom. Consequently, if all North Korean employees are removed, the restaurant has little choice but to shut down.

North Korean workers sent overseas must undergo a meticulous selection period. North Korean authorities select graduates as their ideal candidates and even if a minor detail is undesirable, the candidate is discarded. Furthermore, North Korean authorities dispatch independent National Security Agents to regulate the overseas workers. Normally, 2~3 security agents are residing at the restaurant also.

Yonhap
3/20/2007

South Korea will spend about $250,000 to foot the bill for the training of North Korea’s visiting under-17 football squad, the Unification Ministry said Tuesday.

In a show of thawing ties between the two Koreas after a recent North Korean denuclearization deal, the squad arrived earlier Tuesday on the southern island of Jeju for a month of training. The North Koreans are preparing for the FIFA U-17 World Cup, which South Korea will host this summer.

“We decided to tap into the inter-Korean cooperation fund to pay for their accommodations and others,” a ministry official said on customary condition of anonymity.

It is the first visit by a North Korean sports team to the South since a squad took part in an East Asian regional football competition in August 2005.

The 23 players and nine coaches arrived from a training session in the Chinese city of Kunming, and the squad is scheduled to play friendly matches against university and high school teams before meeting the South Korean under-17 team on March 30. 

South and North Korea agreed to resume joint projects, including South Korea’s rice and fertilizer aid, at their first ministerial meeting in seven months.

They are to hold family reunions via video link at the North’s Mount Geumgang resort on March 27-29. Face-to-face reunions for families separated by the sealed border since the end of the 1950-53 Korean War will be held on May 9-14.

Inter-Korean relations have warmed considerably since the 2000 summit of their leaders, but tension persists since the rival states are still technically in a state of war, as no peace treaty was signed at the end of the Korean War.

South Korea suspended its food and fertilizer aid to North Korea after it conducted missile tests in July. A possible resumption of the aid was blocked due to the North’s nuclear bomb test in October.

The latest six-party talks — involving the two Koreas, the United States, China, Japan and Russia — opened in Beijing on Monday as the U.S. agreed to release $25 million in North Korean frozen funds at a Macau-based bank, a stumbling block to North Korea’s first steps toward nuclear dismantlement.

Check out his revolutionary platform on Youtube

Promo for the World Festival of Youth and Students

Daily NK
Kim Min Se
3/19/2007

Today, a rich person in North Korea is someone who can spend roughly US$100~$500 (300,000~1.5mn North Korean won) a month. This amount is so large, that it is a figure unfathomable to the average North Korean.

Nowadays, a small number of lower class North Koreans sell noodles at the markets and earn 1,500~2,000won a day. On average, this equates to 50,000~60,000won a month. Additionally, the living costs of a family of 4 in Pyongyang normally costs about 50,000~100,000won.

While a laborer with a stable job earns about 2,000~3,000won (approx. US$0.66~1) a month, spending more than 100,000won (approx. US$32.2) a month is an extravagant figure. Simply put, it has become difficult to live only on selling noodles.

Anyone who spends more than 100,000won a month is probably eating rice and can afford to eat nutritious vegetables. This is the middle class of North Korea today.

The distinctive nature of this middle class is the disparity of the work as well as their past background being rather simple. This class has naturally appeared simply because of their genuine skills. These people know exactly the flow of the market and know how to make money. The only thing important to them is finding the opportunity to make money. In all, they have come to an understanding that money is needed in order to buy goods and live a life to the envy of others.

This middle class is closely linked to power. If a person only takes pride in the sense that he/she can money, then that person will be hit with a severe fall. It is a characteristic of North Korean society that power is critical in living a life making lots of money without trouble.

With money, these people are earning even more by buying the supervision of low ranking safety and security agents and local administrative officers. Simply put, the small amount of money invested as bribery in securing a good location at the markets is petty compared to the income reaped. In other words, whenever a new market is established at a village, a person can be confident in having the best spot by winning over the person in charge. For example, the bidding for the best spot at the Sunam Market, Chongjin is 900,000~1.5mn won (approx. US$290~$490).

Entrepreneurs may become the rich after regime reform

In 2002, the North Korean government passed the July 1st economic reforms which gave more freedom to marketers with less control by authorities and hence, trade became more active.

The mindset of the middle are so fixated on money, that they believe that money can solve anything even if a war was to break out the following day or North Korea was to be completely overturned. Though these people conspire with those in power in order to make money, they are unconcerned with what happens or rather does not happen to the Kim Jong Il regime.

There is a definitive difference between the middle class who are rubbing hands and the central class just in case the Kim Jong Il regime did collapse, compared to the upper class. The middle class are not from any particular special background, but with the skills and guile of making wealth, they are confident that there will be no problems irrespective of regime change.

People from this class even have the freedom to save and keep some food and daily necessities in preparation of this incident. Furthermore, currency is undoubtedly being saved, this also being foreign currency such as dollars. This, they call emergency relief in preparation for the time the North Korean regime does collapse, as well as a safe deposit to use whenever trade needed.

In addition, with the change of the North Korean regime, this class will be able to celebrate and radically transform from being an entrepreneur to the newly-rich with all the wealth acquired during the Kim Jong Il regime.

Daily NK
Kim Min Se
3/18/2007

In socialism, the laborer and the peasant dominate the nation and society. However, since the late `60’s, the role of the laborer and peasant has decreased with the bureaucracy taking power, to the extent that a country can no longer remain in traditional socialism.

Currently, North Korea’s leader Kim Jong Il with a minority of the central class surround this core power. In North Korea, the laborers and peasants are rather subject to extortion.

Amidst a North Korean market economy, a middle class is being established. The middle class comprises of people who have assets that the average citizen cannot afford and own medium-sized businesses or engage in wholesale trade.

Undoubtedly, this group of people are dominating the middle class as well as playing a vital role in the lifeline of North Korean citizens and market, a fact that could not have been fathomable in North Korea’s past.

Until the 80’s, North Korea’s economy was a planned economy. Supply and demand of goods was distributed according to the national plan. However, in the late-80’s, small holes began to emerge in the socialist planned economic system and with a lack of daily necessities, people began to rely on the black market.

Arising from the major cities, goods were secretively traded in the black market and eventually the majority of North Koreans acquired their needed goods through this system. This system operated evading the control and regulation of North Korean authorities, but when caught, a person was condemned to severe punishment and the goods confiscated.

However, the mass food crisis of the mid-90’s completely collapsed the remnants of a socialist planned economy that had subsided unto the time. What had happened was the end of the national food distribution system.

In particular, the collapse of the food distribution meant the death sentence. Tens and hundreds of thousands of North Koreans began to die of starvation and as a means to live, people became active in the market and trade began to emerge in different regions of North Korea.

Mass starvation which created expert tradesmen

The immobilization of a socialist planned economy activated Jangmadang (North Korea’s integrated markets) which then led to the formation of a new class within North Korea’s own expert tradesmen. North Korean authorities who had no other countermeasures had little choice but to comply as the lives of the citizens were now left to the hands of trade.

In the mid-90’s, North Korean authorities approved personal trade to occur between North Korea and China and then permitted markets to exist along the border districts. Simply put, the mass food crisis created a new class which actually gave North Koreans an opportunity to trade.

At first, people would sell goods that they already had such as household appliances, television, recorder and bicycle. Furthermore, any type of stock accessible, particularly clothing, candy and other foods coming from China such as rice, flour and corn were also traded.

As people gained more experience and came to know the basics of marketing, tradesmen became more specialized. People who sold rice, only sold rice, whereas people who traded fabric only sold fabric.

North Koreans began to realize that specializing in a particular field was the way to make money and the people who were unable to assimilate to this culture broke away penniless.

Accordingly, the market gradually became a center for specialized tradesmen to provide goods and daily necessities. The goods sold by these tradesmen eventually became the mark for the middle class merchant. During this time, stabilized distributors began to dominate the market and more individualized entrepreneurs surfaced.

People skilled at cooking, baked decorative and delicious bread in their homes and then sell them at the markets. In addition, candy distributors have made a mark at the markets with candy making having become an advanced skill. People who once made candy in their homes now brag that they have been able to produce a small-scale sugar factory. In particular, clothes making and candy making has become enterprises leading to great money.

Today, 50% of candy, home-made clothing and 30% of uniforms, sold at North Korean markets are products made from home. Through goods such as these, Chinese merchants, tradesmen and the middle class are earning money through North Korea’s markets supplying the customers, the majority of the lower class.

Daily NK
Park Choel Yong
3/18/2007

Rigorous Military Training is Killing North Korean Students
Buying food from outside the camps is, however, the privilege only for the wealthy students. Students who came from privileged families often are excluded from the military trainings for one or two months. The training is notorious for hardness, and hence students from the high authorities offer bribes with money or goods to military officers in return for taking rests at home.

For instance, if one ton of coals were offered to a training camp, a student can rest for a month; a box of cigarette, the “Cat” which costs 1,500 won (approx. US$4.8), is worth a day’s break.

With wealthy students out of training, the rest of students suffer from more than double the hardness. Often, poor students end up patrolling for 8 to 10 hours during national holidays and New Year’s Day.

Girl students in the training have their hair cut shortly and cannot keep private things; even cosmetics are not allowed. Therefore, wealthy girl students take their time at home with bribery.

Even during the training period, the students must take lectures. The basic subjects taught during the training are “The Unification History of the Fatherland” and “History of the Invasion of Japanese Imperialism,” and also includes a few majors.

The lectures, however, are often cut off to make room for the farm supporting activity and national performances.

According to the educational schedules, the college lasts four years, not including the training period; however, the time for lectures generally take only two of those years.

In spring and fall, students take part in the farm supporting activity to transplant rice for 40 days in spring and to harvest for 30 to 40 days during fall. Additionally, students from nationally renowned universities are often brought to various national performances. For six to eight months, students do not take lectures in order to practice military parades for Kim Jong Il’s birthday on the 16th of February and Kim Il Sung’s birthday on the 15th of April.

For torchlight processions, students take practices for two to three months. The torchlight processions are held usually in the Foundation Day of the State and the North Korean Workers’ Party, with more than ten thousand university students participating in the event. Students also practice dancing for another two to three months for students’ dancing party at the Kim Il Sung Plaza, which is held during the Chinese New Years’ Day.

That is not all, however. Working in the subsidiary farms that belong to the universities takes students a few months. Students who make the survey on the revolutionary historic spots and the Korean War landmarks are also exempt from the lectures for a few months.

In the end of a semester, reducing the day for lectures is not a special thing. The students do take lectures more intensively and even on Sundays to remedy this as necessary.

Daily NK
Han Young Jin
3/16/2007

“I ordered trees to be planted. Why are the mountains bare!”

North Korean authorities released a publication on the 6th which summarized that, “We must work hard in forestry in order to make our country beautiful.” This order was made by Kim Jong Il on March 6th 2002 to authorities, the state, military and the elite. 5 years on, authorities now honor and remember the words spoken by the dear leader through a propagandist publication that is published whenever the state deems necessary. The content of this publication was also revealed on the official North Korean website “Uriminzokkiri (amongst our nation).”

The document usually contains the comprehensive ideologies and theories made by Kim Il Sung and Kim Jong Il that need to be passed on to the people.

Following are a few of the decrees found in the publications.

“The nation is experiencing economic difficulty due to coupling natural disasters and imperialists who are trying to isolate us. Trees are growing sporadically in the hills and mountain regions. The mountains are also becoming barren….”

“For the past few years, I have been telling you to work hard afforestation and have encouraged you at every opportunity.”

“However, an forestation has not met the criteria of authorities and is not going according to plan.”

Kim Jong Il’s Analysis

What Kim Jong Il is trying to say is that, “The reason afforestation is not working is because of the people’s reckless slash-and-burn cultivation, as well as the inefficiency of officers unable to block it.”

After the food crisis in ’95, people uprooted vines and trees to suffice their underfed diets, as well as cultivating illegal farms for food. Further, to save themselves from freezing to death, people used trees as firewood.

At the time, people were desolate, battling between life and death. If, however, these people were controlled and prohibited from such actions at the time, defectors say that many of those people would not be alive today.

The destruction of mountains Kim Jong Il argues resulted from cunning imperialists isolating North Korea and the severe natural disasters that continued to plague the country. Yet, there is no evidence to support this claim.

The international community did not enforce pressure to the extent that North Korea could not resolve its problem of firewood. Rather, after the 1994 Geneva Agreement, 50,000 tons of fuel was provided annually. Despite this, Kim Jong Il always redirects the responsibility of lack of energy on the international community and the failure of public welfare on the U.S.

Even evidence to support that natural disasters caused a downfall to the economy has become obscure. It is true that North Korea was hit with drought and flood during 1995~1997, however there has not been any major natural disasters since this time and in 2002 when these decrees were first made. Instead, North Korea should have re-planted much of the mountain trees, though reality is not the case. Rather, Kim Jong Il is blaming the failure of national construction and forestation on mother nature.

Without resolving the food crisis, the mountains will remain bare

Every year, for about a month during the spring (early March~April) and fall (early Nov~Dec) seasons, North Korea enters a time of national construction where the rivers and waterways are cleared and trees planted. This national construction first began in March 1996.

North Korea has aimed to plant a billion trees and has been planting this number of trees every year. Following 10 years of national construction, what is the current state of North Korea?

If national construction had worked as planned, North Korea’s mountains should be dense in trees. However, the cause of North Korea’s mountains being so bare is evidence that the food crisis has not yet been solved.

North Korean authorities ordered citizens that they had the right to eat the tree saplings and cereals as it had been cultivated on the mountains which were illegal grounds. On the other hand, the people are continuously angry as trees are overtaking the land in which their grains should be planted. As a result, whenever a tree has grown a certain height, people uproot the trees and plant a smaller sapling in its place. In the end, though the idea of planting trees has been fulfilled, the mountains are still barren.

Ultimately, it seems that North Korea’s empty mountains will continue until the food issue is resolved.