North Korean Economy Watch

Institute for Far Eastern Studies (IFES)
NK Brief 2011-6-13

Kim Jong Il has made four official appearances from May 28 to June 3 since his last visit to China, starting with industrial facility inspections. This could be construed as North Korea’s attempt to highlight current facility-building projects and the superiority of its leadership in improving the people’s economy, and to rally the North Korean people.

Kim commemorated his recent unofficial visit to China by attending a celebratory performance. In a speech, he commented on the outcome of the visit and encouraged solidarity and morale building of its people.

On his return from China, Kim provided field guidance at the construction site of Huichon Power Plant. He called for the early completion of the plant as an essential step in resolving North Korea’s chronic power shortage. Specifically, Kim commented, “Resolving the power shortage is the major task in order to build a strong and prosperous nation . . . . appropriate units must ensure timely production of facilities, equipments and materials.” Kim is reported to have visited the construction site of Huichon on five occasions from September 2009 to December of last year.

In addition, Kim visited a fish breeding institute and Kosan Fruit Farm, encouraging the pursuit of technology development projects through modernization and scientific advancement.

At the fish breeding institute, Kim called for the improvement of the ecological environment of the fishery and for the increase in fish production by constructing more fish farms and by advancing the facility in a way that meets the demands of industrialization and modernization.

Similarly at the Kosan Fruit Farm (located in the Gangwon Province), production was stressed once again as an important task. Kim called for the improvement in fruit production through modernization and the integration of science and technology. This was Kim’s third visit to the farm since 2008.

Kim’s official visits this year are slightly fewer in number compared with the same period of time last year: from 70 visits in 2010 (19 military-related, 29 economic-related, 6 foreign-related, 13 other activities), to 60 visits in 2011 (13 military-related, 28 economic-related, 6 foreign-related, 13 other activities) in 2011.

All major DPRK news outlets covered Kim’s recent visit to China. The Politburo of the Workers’ Party of Korea Central Committee organized a meeting calling for the strengthening of DPRK-China relations. Likewise, the Presidium of the Supreme People’s Assembly praised the current DPRK-China economic cooperation activities and growing friendship between the two nations.

Institute for Far Eastern Studies (IFES)
2011.05.26

On May 23, the DPRK released the “Outline of DPRK-China Joint Development Plan for Rason and Hwanggumpyong Economic and Trade Zone” consisting of detailed blueprint of two countries’ recent bilateral joint development deal.

According to Yonhap News, China and North Korea are planning to turn the Rason and Hwanggumpyong areas into a comprehensive industrial complex of tourism and manufacturing producing automobiles, mobile phones, agricultural and chemical products.

In addition, the Law on Rason Economic and Trade Zone and the Special Law on Hwanggumpyong Zone will adopt market economy principles which will permit foreign bank investments and independent contracts between corporations and workers. Although the development plans are not definite yet, it is significant since it hints at North Korea’s shifting position on opening up and economic development.

The bilateral development plan between Pyongyang and Beijing will stretch from Rajin, Sonbong, Ungsang, to Gulpo areas.

In the Rajin area, four major industrial complexes will be constructed consisting of storage, logistics and distribution centers, state of the art technology, and equipment, clothing and food manufacturing. In the Ungsang area, comprehensive a wood processing complex will be built while in the Gulpo area, a high-efficiency agriculture zone will be constructed. In the Sonbong area, truck manufacturing factories will be built along with other metal producing factories. In Rajin, docks will be built for ship building and maintenance.

There are also plans of developing the Rason area into an international tourism zone. There are immediate plans to build basic tourism infrastructure such as hotels, resorts, and roads for sightseeing. The long-term goal is to build a grand Northeast Asia tour course, which will include Yanbian of China; Rason, Chongjin, Mount Chilbo and Mount Kumgang of North Korea; Vladivostok and Sakhalin of Russia; Sapporo and Nakata of Japan; and Sokcho and Busan of South Korea.

As for the Hwanggumpyong area, four major industrial complexes will be established: one each for information, tourism and culture, modern protected agriculture, and food processing. More specifically, Hwanggumpyong will connect information between Hwanggumpyong and the border city of Dandong in China. In addition, culture and tourism will be developed through promotion of Arirang and other cultural performances and exhibitions.

As for the high-efficiency agriculture zone, a modern agriculture technology research center will be established and China-DPRK joint markets will be set up to serve as a central commerce center.

To assist with the industrial development in the area, land and sea routes will be developed where roads and railroads will be built and Rajin will be upgraded to a comprehensive and multi-purpose port.

There are additional plans of constructing a coal power station to replace the current thermoelectric power plant in Sonbong. There is also discussion of possibly developing other alternative energy plants, such as wind and solar. There are also plans of building basic facilities of mobile telecommunication to promote international communication.

Hwanggumpyong is an island on the Yalu River and the new developments in building ports and roads along with distribution network, Internet, and mobile telecommunication will become a link connecting North Korea with China.

Pyongyang is pursuing development through multiple cooperation channels. It has plans of establishing three-tiered cooperative system with joint management committee, joint development management committee and investment development corporation with Beijing. These committees will be responsible for amending and negotiating any issues that may arise during the process of development and supervise various areas of investments, enterprises, and environment and as well as inspect land and commerce development and basic facility operations.

Both Pyongyang and Beijing will attract foreign investments through market-based tax and financial policies in the Rason and Hwanggumpyong zones. Specifically, tax refund policy will be implemented and tariffs will be lifted from any imported equipment and materials necessary for production. The foreign investment companies will be allowed to choose their own banks or even establish financial institutions to assist in their business management.

In addition, workers and companies will be permitted to sign their own labor contracts. The companies will be granted autonomy in hiring and firing, pricing, bankruptcy, liquidation and other business practices based on market principles.

As for investment protection policy, foreign investors will be permitted to transfer or inherit profits and assets and foreign investor’s investments and assets will not be collected as national property by North Korea.

Pictured above (Google Earth): Pukchang Thermal Power Plant (북창화력발전련합기업소)

According to the Daily NK:

A source from Pyongyang reported the latest on the 14th, saying, “From April the electricity situation got a bit better, so now between 8 in the morning and 5 in the afternoon the electricity goes on and off repeatedly.”

But, the source added, “Between 10 at night and 5 in the morning, it is provided stably.”

According to the source, in the winter period from January to March, electricity was only supplied at all between midnight and 4 or 5 in the morning.

Residential areas of the city receive their electricity mostly at night because factories and official buildings are prioritized during daylight hours.

However, if, for instance, from 8 A.M. to 12 P.M. electricity goes to a shoe factory, and then from 12 P.M. to 5 P.M. it goes to a fabric factory, people in the neighborhood of those factories might be able to charge batteries or watch DVDs during that time.

However, outside the capital things are worse, as usual. In the case of Nampo on the West Sea coast, there is almost no daytime electricity supply at all. According to a source from the city, “In general there is no electricity. It comes around two days in ten, but even at those times it doesn’t usually work for longer than two hours.”

“The electricity situation is getting worse, and people say this is because electricity generated at Bukchang [Pukchang, 북창] Power Plant is all sent to Gangsun Steel Mill,” the source added.

Hyesan in Yangkang Province is in much the same boat. When Kim Jong Il conducted an onsite inspection at Hyesan Youth Mine in April the authorities provided the area with electricity, but now it never comes.

A Hyesan source explained, “They send electricity for 24 hours on Kim Il Sung and Kim Jong Il’s birthdays, but this year it was unstable even then. When May came, they started to give us electricity from 6 to 10 in the evening, but it is unstable so for houses with no transformer this electricity is useless.”

The source from Nampo reported that some wealthier people apparently used to get electricity by offering money to local factories, approximately 15,000 won per month, but that this avenue has also been closed off.

The practice stopped when a decree was handed down stating, “Those who use stolen electricity will be exiled.”

There is also the ongoing problem of copper theft, the Nampo source revealed, explaining, “Before April 15th this year, electrical cables were stolen from Nampo Samcheon-ri Chosun-China Joint Factory (a clothing factory), so for five days the factory couldn’t operate. The workers chipped in with around 300 to 500 won each from their wages to purchase cables so that electricity could come again.”

Since electricity does not flow in most cables continually, it is easy to sever them to obtain the saleable copper inside. This copper, which is relatively expensive, is then sold to smugglers who sell it in China.

The “Gangsun Steel Mill” (Kangson Steel Mill) is now the “Chollima Steel Mill” and it was home to the Chollima Movement (learn more here).  It is true that the DPRK has been recently emphasizing steel production (via recycling of scrap), but it is strange that people would literally think it is draining all the power from the Pukchang Thermal Power Plant since the two facilities are not directly connected on the power grid (or even close to each other).  It is pretty obvious from Google Earth imagery that the steel mill receives its power from the Pyongyang and East Pyongyang Thermal Power Plants.  It could be that the reference to the “Kangson Steel Mill” (which is itself interesting since the factory has not gone by that name in years) is a generic reference to the state’s prioritization of heavy industry over houshold electricity use.

Read the full story here:
Electricity Supplies Showing No Big Improvement
Daily NK
Lee Beom Ki and Jeong Jae Sung
2011-5-16

A new paper by David von Hippel, Scott Bruce, Peter Hayes is up at 38 North.  Here is the conclusion:

North Korea has demanded the inclusion of energy aid and development assistance in every agreement covering its nuclear weapons program because it cannot develop into a “strong and prosperous nation” without such help from the international community. The country’s energy infrastructure is decrepit, and until it is redeveloped, the country will remain stuck in survival mode. Energy imports from China keep the North afl oat while it sells its minerals assets for hard currency. Until the DPRK earns enough foreign exchange to diversify imports and to refurbish its refi neries, it has no alternative but to rely on China. This situation means that the United States and its partners must prepare to engage the North on energy issues to prevent confl ict, avoid the collapse of the North Korean regime, build transparency and gather real data on the DPRK economy, and develop communication channels with North Korea. Without convincing the DPRK that it can overcome its energy insecurity and achieve a sustainable energy economy, it is unlikely that Pyongyang will shift away from an economy that emphasizes exports of military hardware and illicit goods, cease its provocative behaviors, and take steps to assume productive relationships with the global community.

The DPRK’s small LWR and uranium enrichment programs present an additional challenge, but if managed correctly, are an opportunity for engagement on energy issues. Moreover, the immediate demonstration of good faith on both sides will be necessary to proceed with denuclearization. Since big ticket energy infrastructure projects will take some time to deliver, non-nuclear fast fuels and technical assistance will be more useful in the short-term. There are a number of options for energy sector engagement available, ranging from capacity-building in science, technology, law, and economics to assistance with implementation of energy effi ciency and renewable energy measures and refurbishing/replacing major energy infrastructure to connecting the DPRK with big regional energy grids. Though engagement should start small, it should also start soon in order to open doors, establish relationships, and create a foundation for the peaceful economic growth in the North necessary to sustain a thaw in the DPRK’s relations with the United States, its allies, and the international community.

You can read the full piece at 38 North here (PDF).

Three sets of pictures related to the DPRK:

Iron Facebook Curtain: The first image obtained via Aid Watch presents a December 2010 map of Facebook connections.  Notice anyone missing?  (Egypt is there!)

You can see a high resolution version of this image here.

DPRK at night and economic growth: The second image obtained from Aid Watch compares growth in electricity coverage at night between the two Koreas.  This is the first image I have seen like this which makes side-by-side comparisons:

Click image for larger version

I overlaid these images to Google Earth to determine areas of relative growth and decline.  Surprisingly, Pyongyang and Chongjin showed dimmer and smaller electricity signals, indicating lighting was more prolific in 1992 than in 2008.  I would have expected their electricity signals to be just as, if not more, pronounced in 2008.

The areas of growth, where electricity signals are more (modestly) pronounced, include Kaesong (개성), Huichon (희천), Songgan (성간), Thaechon (태천), and Anju (안주).  Most of these are somewhat expected since they have received much publicized foreign (Kaesong) and domestic investment, particularly in power station development.

Also worth noting are the growth of lighting in South Korea and China.

Photoshop Fun: The third set of interesting images come from a Chinese reader who sends along these images from Korea magazine,  the monthly picture magazine published by the DPRK (See e-version here).  The images have been altered to give the impression of plenty.  Below see images of photoshopped goats, swimmers, and bread:

Pictured above: Nampho Glass Bottle Factory visited by Kim Jong-il

Institute for Far Eastern Studies (IFES)
(NK Brief No. 11-01-26)
1/26/2011

According to North Korean media, Kim Jong Il began this year’s onsite instruction with a visit to the Nampo Glass Bottle Factory. The January 20th issue of the Choson Sinbo also ran an editorial stating that “These days, in our country, improving the lives of the people is especially emphasized.” It also noted that Kim Jong Il’s first onsite visit of the year was to a site important to improving people’s standard of living. The paper boasted that great efforts were being made in the development of light industry — especially factories producing daily-use goods and food products — and revealed that the bottle factory in Nampo will play an important role in meeting the increased countrywide demands for packaging from factories large and small.

Despite this praise, the reality is that the people of North Korea are suffering ever-worsening economic conditions. Just as South Korea is in the middle of a cold spell, the North has suffered chilling conditions ever since the end of December. The Korean Central News Agency reported on January 22, “The cold-weather conditions are expected to continue until the end of January,” and, “this cold spell is causing more than a little damage to the lives of the people and to spring farming preparations.”

As the cold spell drags on, their hardship will continue. North Korea is ill-prepared to deal with such cold weather; freezing pipes make it difficult for the people to access fresh water, while food and firewood are in short supply. Hunger and cold are exacerbated this winter because those without access to firewood or heating oil are also faced with an environment devoid of wild plants or animals.

Power shortages have also grown more severe in the new year. On January 20, Open Radio for North Korea (ORNK) reported that an area of the Yanggang Province has been without electricity since the first of the month. Even Pyongyang has been experiencing power difficulties, with electricity only available to most residents for 1~2 hours each day. ORNK reported that “recently in North Korea, students and parents have been burdened with supplying firewood for school heating, while the prices of coal and wood are skyrocketing in the markets.”

The cost of food has also shot through the roof. Rice, corn, pork, and other staple foods are becoming increasingly more expensive. Young-wha Lee, a spokesperson for the Japanese human rights organization Rescue the North Korean People! Urgent Action Network (RENK), announced on January 17 that a source inside North Korea had reported a 500 Won jump in the price of rice within Pyongyang, from 1,400 Won per kilogram on the January 7 to 1,900 Won within 3~4 days. Corn jumped from 750 to 950 Won, and pork was up from just under 4,000 Won to its current price at around 5,000 Won. Gasoline now costs 3,500 Won.

According to a South Korean online source for news on North Korea, Daily NK, one can see the impact of inflation by taking notice of the price gap of around 200 Won per kilogram of rice in Pyongyang and rice in rural areas (North Pyongan Province’s Sinuiju and Ryanggang Province’s Hyesan, in particular). It is noteworthy that prices are shooting up in January, rather than during the lean season of March and April.

Good Friends, a South Korean-based humanitarian organization, has also relayed reports of inflation from sources within North Korea. It has reported that rice was selling in Pyongyang for as much as 2,100 Won per kilogram on January 7, significantly more than the 1,600 Won per kilogram reported at the end of last year. Prices continued to hover around 2,000 Won until recent rations eased shortages and brought the price back down to around 1,500 Won. As North Korean organizations and social units distribute these overdue holiday rations, there has been a fall in food prices.

However, these rations were not seen in all areas of the North, and in those regions where residents were not provided food, prices remain high. Rice in Hamheung jumped from 1,500 Won per kilogram on January 1 to 1,800 Won just one week later. On January 7, similar prices were seen in Chongjin (1,750 Won) and Sinuiju (1,800 Won). Ten days later, rice in Chongjin had climbed to 1,980 Won, and was threatening to break the 2,000 Won barrier. Corn in Pyongyang was selling for 950 Won per kilogram on January 7, while it cost 780 Won in Chongjin and 850 Won in Hamheung, Sinuiju, and Pyongsong. By January 17, corn averaged between 750 and 800 Won. Only in Pyongyang, agricultural regions, and other areas receiving rations had prices fallen to 600 Won per kilogram.

According Good Friends, grain prices in the North have shot up this year because several Party officials in charge of grain imports are behind schedule with incoming shipments, and the rising value of the US dollar and Chinese yuan have driven up the cost of overseas purchases.

Kumya Dam
A dam is being constructed in Kumya County, South Hamgyong Province, to provide electrical power. Kim Jong-il last visited in August 4, 2010. It is just one of several dams under currently under construction in the DPRK.

Here is a satellite image of the Kumya dam’s construction (Google Earth: 11/25/2008,  39.574232°, 127.104736°)

This new reservoir will flood the locations of three villages (리): Ryongnam-ri (룡남리), Ryongsang-ri (룡상리), and Ryongchon-ri (룡천리).

Estimates of the reservoir size are made by me, but it is fairly obvious where the North Korean engineers expect the reservoir to flood because they have already relocated the villages from their former locations in the flood zone.

Here are the former locations of Ryongchon-ri, Ryongsong-ri, and Ryongnam-ri:

All of the homes, buildings, and factories have been moved (lock, stock, and barrel) to another location. I am not sure where.

Imnam Reservoir
The dislocation caused by the Kumya Dam, however, pails in comparison to the dislocation caused by the creation of the Imnam Reservoir (임남저수지) in Changdo County (창도군).

The Imnam Reservoir bisected the county and flooded nearly half of it, including its capital city and at least 14 villages (리): Jisok-ri (지석리), Pankyo-ri (판교리), Sinsong-ri (신성리), Songdo-ri (성도리), Kisong-ri (기성리), Tangsan-ri (당산리), Tohwa-ri (도화리), Tumok-ri (두목리), Myongchon-ri (면천리), Imnam-ri (임남리), Taejong-ri (대정리), Jon-ri (전리), Onpae-ri (언패리), and Cholpaek-ri (철벽리).

Below is a picture of the Imnam Reservoir along with locations of the various population centers that were flooded.

It appears that the North Koreans constructed a new county capital north of the reservior at 38.652243°, 127.711817° (although this city is not on any maps of North Korea that I have seen). This new city, however, has itself seen severe flood damage (caused by excessive rainfall).  Some of this devastation can bee seen on Google Earth, but the full extent of it is not available with current imagery.

The poor people of Changdo county can’t seem to catch a break.

Lake Paekma
Lake Paekma lies at the head of the Paekma-Cholsan Waterway in Phihyon County ( 40.082356°, 124.695685°).  Two villages were lost to the construction of this reservoir: Sangko-ri(상고리) and Ryongun-ri(룡운리).  In the images below you can see the locations of the remnants of these villages as well as their disappearance under the waters.

Military losses to dam construction
Civilians are not the only ones to have suffered dislocation at the hands of the DPRK’s energy policy. The airforce lost a couple of facilities as well.

Thaechon County:
The North Korean air force lost one training facility to a  new dam on the Taeryong River (대령강) in Thaechon County ( 39.865138°, 125.562139°).  Here and here are the before and after pictures.

Tongrim County:
And most recently, the an airfield and heliport in Tongrim County ( 39.918570°, 124.840542°) appears to be in danger of flooding as a result of the rising Maepong Reservoir (매봉저수지)–a lake on which “someone” has a very nice house:

According to the Daily NK:

The North Korean state media has stepped up the level of its Kim Jong Eun propaganda in an attempt to stamp his identity in the minds of the North Korean people.

According to a report carried by Chosun Central News Agency, Rodong Shinmun was expanded to ten pages on November 4th to include a full-page spread about Kim Jong Il and Jong Eun’s onsite inspection of Heecheon Power Plant in South Pyongan Province.

Rodong Shinmun normally covers six pages, although important events regularly lead to it being expanded.

On the first and second pages of the Heechon Power Plant edition there were photos and commentary about the inspection; the remaining pages contained nothing but photos.

Chosun Central TV also reported the news of the onsite inspection at around 5:10P.M. on the same day, and, in a highly unusual move, simultaneously released 145 pages of related images.

Of them, 86 were of Kim Jong Il and/or Kim Jong Eun, and 59 were of power plant facilities; 13 of 45 showed father and son together; and 8 showed only Kim Jong Eun, who appeared in the same style and color of overcoat as his father.

This is the second time this year that Rodong Shinmun has been expanded to report one of Kim’s onsite inspections while completely excluding other news; his onsite inspection at Ryongseong Food Factory and Pyongyang Flour Factory was released over 12 pages on January 24th.

The newspaper has also been expanded to more than ten pages in order to report Kim Jong Il’s public activities in detail alongside other news on a number of further occasions during 2010: an onsite inspection at Kim Il Sung University electronic library on April 13 covered eight of ten pages; another at Ryongseong Machinery Factory in Hamheung on May 22 took up nine of ten; Goksan Factory in Pyongyang on August 26 required six of ten; and the Party Delegates’ Conference on September 29 took up eight of ten.

Heecheon Power Plant, which is designed to generate 300,000kW of power, is under construction in the upper reaches of the Cheongcheon River. It is scheduled to be completed in 2012 alongside other “Strong and Prosperous State” construction projects including that of 100,000 houses in Pyongyang.

In addition, the Daily NK reports that the DPRK media is using honorific words to describe KJU.

North Korea’s state media has begun to apply the highest form of honorific speech to Kim Jong Eun’s name and descriptions of his movements, according to a Radio Press report released yesterday.

According to Radio Press, while broadcasting the movements of Kim Jong Il on October 27th, a Chosun Central Television announcer explained that a Chinese delegation had “given a gift to Chosun Workers’ Party Central Military Commission Vice Chairman, Comrade Kim Jong Eun”, using both the highest form of “to” and “give” available in the Korean language.

In addition, on the 29th of last month both Chosun Central Television and Pyongyang Broadcast announced the fact that the international media had reported the presence of Kim Jong Eun and Kim Jong Il at a mass rally with the highest form of “to” and by amending the verb “to attend” to reflect the esteem with which the successor is officially held..

Hitherto, only three people in North Korea have been spoken of in this way; national founder Kim Il Sung, son Kim Jong Il and Kim Jong Il’s mother, Kim Jong Suk.

This method of referring to Kim Jong Eun appears to represent an important part of ongoing attempts by the authorities to idolize and elevate the successor’s status, while seeming also to reflect the speed with which the succession process is being undertaken.

Read the full stories here:
Cover-to-Cover Kim in Rodong Shinmun
Daily NK
11/5/2010

North Korean Media Speaking of Kim Jong Eun in Honorifics
Daily NK
Kim Tae Hong
11/4/2010

According to the Daily NK:

Although it is just 10 kilometers from Hyesan, the capital of Ryanggang Province, no electricity has been supplied to Nojoong-ri since construction began on the Samsu Power Plant in 2004. In fact, there are no longer any transmission cables connected to the village at all.

The North Korean authorities, in preparation for the construction of the power plant in 2002, put in place relocation plans for the residents of the Unchong River Basin in areas they designated as “probable watersheds” for the lake which would form behind the proposed dam. District Four of Nojoong-ri was one of those areas, and as a result had all of its power cables removed.

However, in a follow-up plan completed right before groundbreaking on the project in 2004, the water storage capacity of the Samsu Power Plant was reduced on account of analysis that cautioned against over-filling the reservoir. This resulted in District Four of Nojoong-ri being re-designated as outside the flood zone, but none of the services were resumed, including the provision of electricity

After a year of living without power, the residents, who were still waiting to be assigned new homes, eventually pleaded their case to have the village’s power lines restored to the “Standing Committee on Flooding”, a special organ of government in charge of the relocation of flood-area residents. However, the response was that they were ineligible for aid because their village was not in a flood zone. The villagers then filed petitions with the Party at Hyesan City and provincial level, but to no avail. They were only to hear the same repeated response, “We were not the ones who removed the power lines.”

If electricity were to be provided to the area, quite a few power lines would need to be installed. But the only place where electricity for the village could be obtained is “Military Supplies Factory No. 95”, located four kilometers from the village on the other side of a hill. The 50-megawatt Samsu Power Plant stands adjacent to the village, but the electricity generated there is supplied exclusively to “Kim Jong Il Birthplace Heritage”, otherwise known as the “Baekdu Hideout”, in Samjiyeon. At one point there was talk of the residents putting their money together to provide for their own power cables, but the plan was prohibitively expensive.

Thus, the residents of this part of Nojoong-ri have been living without electricity for nearly seven years. They depend entirely on candlelight and firewood as they scrape a living off potato farming and alluvial mining.

“It is hard to say that it is even a place where people should live. People from as far away as South Pyongan and North Hamkyung come here to mine alluvial gold, but are shocked to find the state that the village is in,” according to an anonymous Yangkang Province source.

Of course, with the original designation came many more changes, including work and schooling. The one-way commute that the village’s men take every morning is seven to eight kilometers, while the women cannot easily reach the market to sell their produce. Children are also suffering the consequences; having to walk 15 kilometers a day to attend Nojoong-ri Middle School has led to a rising number of student dropouts.

Here are previous posts about the Samsu Dam: here, here, here and here.

Read the full story here:
Seven Years of Blackness
Daily NK
Kang Mi Jin
11/4/2010

Daily NK
Yoo Gwan Hee
4/5/2010

In North Korea, April 1st is commemorated as “Tax Abolition Day.” Ever since the law, “On Completely Abolishing Taxes,” was ratified through the Supreme People’s Assembly on March 21, 1974, North Korea has claimed both within and without to be the only country in the world that does not collect taxes. However, their claim is only for propaganda purposes, for North Koreans labor under a list of state-imposed taxes and duties which grows longer day by day.

Take the example of electricity. Power distribution center members in every city and town visit households in their region alongside the chairperson of the local People’s Unit, whereupon they collect electricity payments according to the number of electric bulbs and electronic equipment therein. This process is done quarterly. In the late 1990s, the quarterly electricity bill per household in Pyongyang was about 20 won. To reduce costs, of course there were people who removed electric bulbs and hid electronic equipment such as irons whenever the power distribution center had workers in their neighborhood.

Since the 2002 economic management reforms were announced on July 1, however, electricity bills have increased greatly. For families living in luxurious apartments in the Jung-district of Pyongyang with televisions, refrigerators and electric fans, households pay as much as 800 or 900 won per quarter.

After the so-called July 1 Reform Measure, troubles between the power distribution center and the people increased. The North Korean people were understandably displeased with the power distribution center, for it was trying to collect money for a utility whose availability was and remains far from regular.

Next, let’s look at reserve food and organizational expenses. North Korea has nine levels of food distribution. From 100g to 900g is supposed to be distributed per day depending on the level, but for the purpose of stocking up reserves, up to 100g is collected from the people instead. Additionally, people are forced to submit approximately two percent of their salary for organizational expenses.

Next, to support for the construction of historical sites. North Korea emphasizes the “voluntary participation” of the North Korean people under the Party apparatus and workers’ organizations. Construction of historical sites for the idolization of Kim Il Sung and Kim Jong Il is frequently organized. Also, officials often collect money from people in order to support those construction projects of which the cabinet is in charge.

Then there is free education. It is officially called “free education,” but school administration expenses are all covered by students and parents. Students have to collect waste paper, waste iron and waste rubber, or raise rabbits and submit the pelts to school. After 2000, there have even been students engaging in business around markets in order to provide supplies for submission to the school.

Onwards, then, to market stands rental fees. After the July 1 Reform Measure, the amount of tax collected at markets suddenly increased. Market stand rental fees already existed before the July 1 Reform Measure but, after 2002, market management centers started collecting market management tax as well, basing it on each product sold. Noodle sellers paid ten won per day, while soybean curd sellers paid three won.

Market stand rental fees became more systematic as well after general markets opened in late 2003. According to the product being sold and daily sales figures, market management centers charged rental fees. In present-day Nammun Market, Hoiryeong, the stand rental fee is said to have been fixed at 100 won per month.

Separate from the stand rental fee, monthly tax is charged on products for sale in the markets. For example, Nammun merchants pay additional taxes of 300 won for industrial goods, 180 won for pork, 150 for cigarettes, alcoholic drinks and fish, 120 won for food and 100 won for general merchandise.

So, while the North Korean media deliver their diet of propaganda promoting North Korea as the world’s only taxless country, be wise to the reality of the North Korean people suffering under an increasing tax burden.