North Korean Economy Watch

Daily NK
Kwon Jeong Hyun
9/28/2007

With the 2nd Inter-Korea Summit Talks coming up in five days in Pyongyang, the North Korean authorities have officially begun regulations of civilian migrations.

An inside source in North Korea said in a phone conversation on the 27th, “Control of civilians have become significantly toughened due to events of national importance, so the top (government) has completely limited travel permit approval numbers of average civilians to Pyongyang and the border regions.”

People’s Units’ chairs are in the midst of temporarily working on a reporting system which analyzes the data of civilian migrations and daily reports them to the security office.

North Korea still requires travel permits for moves to other regions from the place of residence. The inspection of permits becomes even more difficult when public transportation such as rails are used.

In particular, entry into Pyongyang, Yongbyun (nuclear power plants), Hwadaegun (Musoodan rocket launching site), and the northern border unit requires special travel permissions that are different from normal permits. For these special regions, an approval number, which signifies “special business,” is needed.

After the March of Tribulation, incidents of the Safety Agents issuing travel permits after receiving bribes were rampant, but recently, the regulation of such permits and travel restrictions on special regions have become more stringent. Restrictions on the issue of travel permits have significantly increased since the Local People’s Assembly representative elections on July 29th.

The source said, “After Chuseok (fall holiday), the order restricting the issue of all border and Pyongyang-related permits was announced at the People’s Unit meeting. With the Summit talks several days ahead, meetings of key leaders have all been cancelled and all entry and exit prohibited.”

Further, he said, “The northern border region or other controlled areas are not exceptions. Money will not do anything when trying to attain travel permits. Due to the fact that the issue of permits, with the exception of deceased reports, has been completely disallowed in surrounding cities of Pyongyang, such as Pyongsung or Nampo, the discontents of merchants who are dependent on travelling are high.”

With restrictions on civilian migrations, the price of commodities at the Jangmadang (market) has also been raised. Chinese products have to be brought back from the North Korean-Chinese border region, but because travel permits have not been issued, the transport of goods is difficult.

For industrial products, if the border region lowers the price, then prices go up in inland regions such as Kangwong, South and North Hamkyung, etc., because Chinese products coming in from border cities Shinuiju and Hyesan, Yangkang are not able to move inland. The inland is the opposite. However, the amount of rice coming in from inland regions is high, so their prices end up hiking up.”

However, the source said, “This time, the management will probably end at one-time inspection because the South Korean President is visiting. The jangmadang price levels will not skyrocket.”

Regulations regarding private visits of Chinese through Chinese travel agencies have not occurred yet.

It appears that the North Korean authorities, in order to prevent accidents and events which could happen around the Summit talk period, have strengthened preventative means.

One source who is residing in Musan, North Hamkyung, said, “In order to ensure the success of national events, lectures for leaders, with the content of hindering behind-the-scenes maneuvering of enemies and accidents and events on a timely basis, are taking place. Strict disciplinary actions for those who divulge national secrets and illegal use of cell phone are being emphasized.”

The source relayed, “Border guards are telling smugglers, ‘Wait just a few more days. After the national event (the Summit Talks), regulations will be relaxed. The situation nowadays is that smuggling is self-restrained.”

Institute for Far Eastern Studies
NK Brief No. 07-9-28-1
9/28/2007

Since early this year, North Korean authorities have been systematically implementing a double-entry accounting system to keep track of cross border trade with China, and as of late have been cracking down on private sales of goods imported under state requisitions.

It has become common practice for most traders to keep two sets of books, a private accounting record, and a set of records for government use. As these traders exported state goods to China, they would conspire with Chinese counterparts and make huge profits by recording lower prices than goods were actually being sold for. In many cases, bribes are taken to turn officially imported and exported goods (minerals, seafood, etc.) over to private sellers. These facts came to light through Chinese traders in business with North Korea.

Recently, however, investigations by the Kangsung Trade Company, operated under the supervision of the People’s Armed Forces Bureau, led to the conviction and execution of a foreign currency trader in Kangwon Province, Wonsan City and another from South Hamkyung Province, Hamheung City on charges of funneling company funds for private use. The crackdown appears to be because embezzlement and other forms of corruption are on the rise.

It was also disclosed that the foreign currency trader in Hamheung was accepting money from private business operators and using the company’s name to lend import and export quota chits. Inspectors raided the homes of the suspects and found large amounts of U.S. currency and gold, as well as no small amount of Japanese yen.

The human rights NGO ‘Good Friends’ reported in last month’s newsletter, “ After Oh Moon-hyuk, foreign currency director for the Chosun Fabric 88 Trade Company in Yunsa County, North Hamkyung Province, built a private villa on a plot with a good view, and purchased a Mercedes out of pocket, he drew the attention of General [Kim Jong Il] and was exposed. He was publicly executed in the middle of last July.” The NGO went on to report, “Every day young girls were called to the villa for his enjoyment, and security forces and police made it a point not to stop by the area near the villa often.”

Trade authorities in the area report that the crackdown on these violators has had no effect on DPRK-PRC trade. High ranking officials are aware of the abuse of authority to earn money, but had to some extent turned a blind eye to the issue. The crackdown is a result of the recent considerable growth in the problem.

Korea Times
Jung Sung-ki
9/26/2007

(UPDATE: On Oct. 23, [2008] the State Department blacklisted two North Korean companies, Korea Mining Development Corp. and Korea Taesong Trading Co., for violating U.S. bans on the sale of equipment used in building missiles or other weapons of mass destruction to Iran and Syria. Citation: “North Korean Plane Was Grounded at U.S. Request “, Wall Street Journal, Jay Solomon, 11/1/2008 ) 

The U.S. State Department is expected to announce additional sanctions on North Korean entities connected to missile proliferation, Yonhap News reported Wednesday.

Some of the entities are believed to be linked to the Korea Mining Development Corporation (KOMID), which was designated in June 2005 in an executive order for supporting weapons of mass destruction proliferation, it said.

The measure would come at an awkward moment as envoys from six nations _ South and North Korea, the U.S., China, Russia and Japan _ gather in Beijing from Wednesday for a fresh round of negotiations aimed at disabling and eventually dismantling Pyongyang’s nuclear weapons and programs.

The U.S. Treasury had frozen some $25 million in North Korea-related money held in a Macau bank in late 2005, a punitive measure imposed as the six countries were signing an agreement toward denuclearization. That led to more than a year’s suspension in negotiations with the North.

The new round of six-party talks is already on shaky ground with suspicions that Pyongyang may have transferred nuclear-related material to Syria, prompting the unexplained Israeli air incursion into Syria earlier this month.

Tom Casey, a State Department spokesman, said Tuesday the new sanctions are related to missile technology transfers and downplayed possible negative repercussions on this week’s talks.

“The company that was sanctioned has been sanctioned previously for the same thing. So the net effect of this is really pretty minimal,” he said. “I don’t see…any reason why this should impact on the six-party talks.”

North Korea accused the United States of defending Israel’s recent airstrike against Syria, calling the strike a grave crime that undermines regional peace and stability.

The North’s main Rodong Sinmun newspaper said, “Israeli warplanes’ intrusion into the territorial airspace of Syria and bomb-dropping are an outright violation of Syria’s sovereignty and a grave crime that destroys regional peace and security,” according to Yonhap.

The North’s comments came days after high-level talks between North Korea and Syria. The two countries, which deny the allegation of a secret nuclear connection, did not provide details of Pyongyang talks.

Andrew Semmel, acting U.S. deputy assistant secretary of state for nuclear nonproliferation policy, said earlier this month that North Koreans were in Syria, and that Syria might have had contacts with “secret suppliers” to obtain nuclear equipment.

Semmel did not identify the suppliers. However, he said he could not exclude the possibility that a nuclear black-market network, run by the disgraced Pakistani nuclear scientist A.Q. Khan, might have been involved.

Semmel’s comments raised speculation that an alleged Sept. 6 Israeli incursion into Syrian airspace was a strike targeting a nuclear installation. U.S. officials have said Israeli warplanes struck a target. One U.S. military officer said the strike was aimed at weapons being shipped to Hezbollah militants in Lebanon.

Daily NK
Lee Kwang Baek
9/21/2007

The expansion of Jangmadang’s private economy

Several years ago, I met a defector from North Korea and is currently residing in Japan. He frequently meets people coming and going from North Korea.

The change he relayed regarding North Korea was interesting and vivid. Although hundreds of people are not dying from starvation as in the past, transformation brought about by the expansion of the private economy, such as the Jangmadang (markets).

I asked him what the most significant change in North Korea was after the mass starvation of the mid-90s.

It was the reorganization of North Korean society’s class system. According to him, there are currently six levels of classes forming in North Korea.

First is the top privileged class based on Kim Jong Il. It is the class that feeds and lives on Kim Jong Il’s administrative funds, all kinds of support coming in from South Korea, and extractions from civilians.

The second is the power class engaging in the area of foreign currency earning activity. A portion of money gained from the foreign currency earning business is offered to the Kim Jong Il regime and the rest are accumulated as their own wealth.

The third is the “moneybag” class who has earned money from exchanges with the products from Jangmadang and China. They use “violence” and “money,” like the Russian mafia, to secure the commercial rights of each region via the Jangmadang.

The fourth is the class whose sustenance depends on provisions. It can be deduced that people in the middle-class take up approximately 20~30% of the civilian population.

The fifth is the common class who depend on Jangmadang and individual patches. Approximately 60% of the total population falls into this class. They live day to day on their labor power.

The lowest class is the elderly, the handicapped, Kotjebi (begging children), city migrants, and diseased patients.

The most outstanding class is the 5th class. They are a class who has started living independently without depending on the Kim Jong Il regime and counts as 60% of the population.

South Korean administration believes that there is a need to seek a North Korean policy while considering the size and characteristics of the lower class.

That is, direct support or loans to the North Korean government should be reduced and a direct commercial transaction with North Korean citizens should be increased. Gradually, Kim Jong Il regime’s political position should be weakened and the status of self-sufficient lower-class citizens have to be elevated. This can become an important foundation for North Korean society’s move towards a market economy.

The second eye-catching element is the most venerable people in the lower class. Approximately 10% of people who fall under this class are humanitarian aid recipients of our government and international society. The latter two have steadily continued their support to them.

Despite this, according to a recent North Korean source, a significant amount of people are suffering from malnutrition among those who have been admitted to hospitals, long term reeducation camps, and concentration camps for beggar children. Why are such events occurring?

The defector said that when the rice that the South Korean government sends arrives at the North Korean harbor, North Korean authorities or organizations immediately sell them for money.

Similar testimonies have come forth from North Korean civilians. Rice which is sold at the harbor can only be bought with foreign currency. People who can purchase rice by paying foreign currency are “moneybags” for a portion of bureaucrats who have accumulated wealth. Moneybags and corrupt officials hand over this rice to the Jangmadang and collect the enormous balance.

The humanitarian aid provided by the outside, before they are even relayed to the lowest class who should be receiving support, are flowing into the hands of moneybags and corrupt bureaucrats. If such defectors’ testimonies are true, the South Korean government’s humanitarian rice support has lost its original function.

The solution regarding this is two-fold. First is directly relaying medical products and rice to North Korea’s lowest class. Through civilian and organizational efforts, a humanitarian support team jointly based on South Korean civilians and government should be formed and they should initiate humanitarian aid activity by directly going into North Korea.

Further, a large-sized South Korean humanitarian support activity inspection team should observe the activities of the North Korean Red Cross and raise the transparency of distribution. If this is difficult, there is a need to simplify the window through the support of international society whose monitoring is much ahead of our government’s monitoring of formality.

The government should urgently restore the original capacity of humanitarian support in order to avoid falling into a policy of failure geared only towards a dictatorship regime.

Korea Times
Andrei Lankov
9/16/2007

The late 1990s will go down in North Korean history as years of frantic trade activity. As a witty North Korean once put it: “There are two types of people in North Korea now: those who trade and those who are dead.”

I’ve met a number of former North Korean merchants, and today I would like to tell the story of one such woman. The story is typical in many respects, and I suspect that countless thousands of her peers would narrate something similar.

When the Dear Leader died in 1994 and things began to fall apart, Ms. Yoo was in her early 20s, doing semi-skilled work at one of the offices in the North Korean capital.

By autumn 1996, even in privileged Pyongyang, food rations were coming less and less frequently. Ms. Yoo’s office, like many other offices across the country, decided to shrink its workforce.

Every month all workers were given one week free, on the assumption they would somehow fend for themselves. They were not paid that week’s wages, and did not receive rations either.

Essentially, it was Ms. Yoo’s mother who was the brains and energy behind the entire enterprise. A kindergarten teacher, she was a typical Korean “ajumma” at her entrepreneurial best: charismatic, charming when necessary, clever andquick-witted.

Actually, Ms. Yoo did not know much about her mother’s contacts and plans.

Now, a decade later, she still remains ignorant. However, one thing was clear: the mother had good connections among the personnel of the hard currency shops.

How did she manage to acquire such connections? After all, the hard currency shops are staffed with privileged people, while a kindergarten teacher is not very high in the North Korean pecking order.

We know not. At any rate, these connections existed and this fact sealed the fate of Ms. Yoo. It was not what people would talk about so much, but Ms. Yoo believes that many of her colleagues started private trade in those years, when it began to flourish. She was no exception, but her situation was better since her mother would take care of business planning.

Ms. Yoo’s mother chose cigarettes as their major merchandise. The smuggled Chinese cigarettes sold extremely well, the packs were light and so could be easily moved by the girl in her early 20s, and profits were very high.

In late 1996 a pack of ten would cost 280 won in the borderland areas, but could be sold in Pyongyang for 400 won wholesale. Later, Ms. Yoo found ways to buy the cigarettes even cheaper, at 240 won a pack, purchasing the merchandise directly from the smugglers instead of the local go-betweens.

Mother sold the cigarettes to the hard currency shop. It is not clear what happened to the merchandise eventually. It seems that the shop managers simply pocketed the money they received from the sales of the cigarettes.

A single trip would garner a net profit of some 20,000 won, and she could go once a month (sometimes more frequently). Now consider that Ms.Yoo’s official salary was 80 won a month, and her father, a junior college teacher, received something like 150 won a month, so the black market money from the cigarettes ostensibly appears an outrageously large amount of money.

However, in the world of the Pyongyang black market, which began to emerge around that time, this was not seen as a fortune. Still, Ms. Yoo spent no more than 1,000 won a month on herself buying whatever was her fancy.

One of her more extravagant splurges was on a South Korean cosmetics set which cost 800 won, or roughly her official annual salary. At the time she did not quite realize where the goods were produced, since being a good, politically correct girl, she still believed that South Korea was populated by beggars living in constant terror of the sadistic Yankees!

But what about travel permits? After all, for decades no North Korean was allowed to leave the county without a permit issued by the police. Well, by the mid-1990s the travel permit system was in disarray with a single exception: entrance to Pyongyang remained strictly controlled.

However, in most cases money talked, and permits could be issued for a moderate bribe. However, Ms. Yoo and her mother discovered an even easier way. They did not bribe officials but bribed railway policemen, those who were on duty on the North Korean passenger trains.

For 500-1,000 won, plus free booze and some presents, a policeman would make sure that Ms. Yoo would reach her destination and come back with sacks of cigarettes, and he also would take care of her personal security.

Better still, the 500-1,000 won bribe was sufficient for few round-trip commercial expeditions. The trips were hard. The carriages were unbelievably crowded, with people packed everywhere, sitting on roofs and ladders. As Ms.

Yoo describes, “even on the roof one could not see a square centimeter of paint, people there were sitting that tight.” Another problem was the frequent delays, so the journey of some 400-500 kilometers would normally take 2-3 days. Still, the money was good, and Ms. Yoo enjoyed the adventure, and even now, ten years later, she seems to be proud of her ability strike deals, calculate profits and losses, and find suppliers.

However, Ms. Yoo’s business activity did not last for long. Somewhat against her will, she found herself lured (or kidnapped) to China and soon fate turned in a way which made a return home impossible.

Hankyoreh (h/t Tim Beal)
9/13/2007

Deal would see such shipments cross the DMZ for the first time

For the first time in the more than 50 years since the Korean War, minerals produced jointly by the two Koreas will be sold in South Korea. The two countries will also start to work on developing new mine projects and will launch drilling as early as next month, Lee Han-ho, head of the Korea Resources Corp. (KORES) told the Hankyoreh in a recent exclusive interview.

Lee is one of the group of business leaders and government officials that will accompany President Roh Moo-hyun during the second-ever inter-Korean summit slated for Oct. 2-4.

“On September 5, I met with Chung Un-up, North Korean head of the Inter-Korean Economic Cooperation Association in Pyongyang, and signed a deal to sell black lead products that two Koreas jointly produced at a mine in Hwanghae Province,” Lee said. “We also agreed to work together in developing a limestone mine in Shinwon of the same province and start drilling for black lead in the Pungcheon region.”

So far, minerals produced in the North have been sold in South Korea through a third country, such as China. Every year, US$10 million to $100 million worth of originally North Korean-produced non-metals were shipped to the South. This new project will be the first time such materials produced by the two Koreas will directly cross the line that has divided the peninsula since the 1950-53 Korean War.

The cross-border shipments would also come at a time when China is working on joint ventures with the North to develop resources in the communist country. Experts see the first-ever joint production and shipment of minerals as providing a boost for inter-Korean cooperation in the resources field.

Lee was invited to the North by the Inter-Korean Economic Cooperation Association. The first shipment, amounting to 200 tons will be on the South Korean market earlier next month, with 800-1,000 tons of black lead to follow. Wonjin Co. will be responsible for the sale of the black lead, which will be used in making fire-resistant materials and carbonized steel. Eight hundred tons of black lead would be priced at around $150,000.

KORES opened a 50-50 joint venture with a North Korean firm in April last year, but its full-blown operation has been delayed until recently due to electricity shortages in the North.

Institute for Far Eastern Studies
NK Brief No. 07-9-13-1

It has been reported that Chinese and North Korean governments are working in unison to push forward with a plan to jointly build a goods distribution center in the North Korean city of Sinuiju. According to Yonhap News, China proposed a plan for North Korea to build a ‘DPRK-PRC Friendship Distribution Center’ in Sinuiju, and the two countries are currently involved in negotiations over the idea. North Korea has already signed an investment agreement welcoming Chinese investment firms.

In conjunction with this, North Korean Chamber of Commerce Secretary General Yoon Young-suk held an interview with Yonhap News in the Chinese city of Changchun on September 3. At that time, while refuting a new push for the development of the Sinuiju Special Administrative Region, he stated that “regarding the procurement of a range of goods required in [North Korea], I have heard talk of a plan for a DPRK-PRC Friendship Distribution Center in part of the Sinuiju region.”

The scope of trade between China and North Korea is growing by the day, yet the Sinuiju Customs Office responsible for customs clearance for Chinese imports was limited from the beginning, and the need for a replacement facility has been brought up time and time again. This new distribution center appears to be in response to these calls for a larger facility. The construction of the center will be a cooperative project involving materials and capital from China, while North Korea will provide the land and labor.

A trader from Pyongyang acting as a confidential informant stated, “repairs on the road portion of the [steel bridge spanning the Yalu River connecting Dandong and Sinuiju] carried out from the 10th to the 26th of last month were also part of the material aid from the Chinese.” Officials at the North Korean consulate in Shenyang traveled to the bridge on the 23rd of last month to inspect the progress of the upgrades.

Not long ago, a Chinese trader traveled to Pyongyang, then by road to Sinuiju and over the river to Dandong. He observed, “many construction workers involved in large-scale ground leveling construction work along the railroad tracks running through the heart of downtown Sinuiju,” and, “approximately 10-20 meter deep, very large scale construction appeared to be underway.”

Daily NK
Han Young Jin
9/4/2007

Distribution with “Korea” Trademark…”Rice Cookers Popular”

In the North Korean jangmadang (market), South Korean products are drawing huge popularity among citizens and are publicly being sold, relayed an internal source on the 30th.

The source said, “In the Pyongyang, Shinuiju, Hamheung, Chungjin, and other large-scale jangmadangs, South Korean products with the “Made in Korea” label is fairly popular among wealthy people.”

In the past, South Korean products were secretly sold in the North Korean market. When selling South Korean products, we sold them after removing the product label, “Made in Korea.” However, recently, only products with the label are recognized as South Korean products of good quality and sold at a high price.

The source added, “‘Made in Korea’ lends credibility to the people. Without this, people do not believe that the product is a Korean-made good. The label has to be there because Chinese products are disguised as South Korean goods.”

The South Korean product which is most sold in North Korea is the electric rice-cooker (Cuckoo), instantaneous water heaters, cosmetics, aromatics, computers, toothpaste, medical goods and a variety of sweets. Also, North Korean citizens have a lot of confidence in South Korean medicine. South Korean-made medicine or sweets are not discarded even after the expiration date.

He said, “Because Chinese-made products are no good, people who have money usually used Japanese products. In the place where Japanese products became rare, Korean-made products are now occupying that place.”

In Dandong, China, Kim Chi Duk (pseudonym), who is engaging in North Korea-Chinese trade met with the reporter and retorted, “Currently in Chosun (North Korea), Japanese-made products are still counted as number 1. Then there are South Korean-made products, then Chinese-made products. Poor people, even when the quality is lower, use Chinese-made products and those with money use South Korean products or Japanese-made products. What is the issue if one is buying with his or her money?”

He said, “Those with some amount of money use at least one or two South Korean products.”

The source relayed, “Currently in the Shinuiju market, South Korean toothpaste is 5,000 won (USD1.85), 1 set of aromatics (machinery and 2 bottles of gas) is 30,000 won (USD11.1), and one pack of Time cigarettes (tax-exempt) 3,000 won.” However, “Time,” a kind of South Korean cigarettes are counterfeit goods made in China, so is offered at a cheaper price than their domestic price.

Mr. Kim said, “Those who trade in North Korea request for South Korean-made goods, but I do not know whether they plan to export them or to use them. The authorities do not allow American-made goods, but is there anyone who doesn’t like the dollar? If it is not a big issue, they use everything.”

Daily NK
Kim Min Se
9/1/2007

The news of one Chinese trader resolving all issues with the “certification of gifts,” while passing through a high-level North Korean customs’ confiscation of goods and demand of open bribes, has received recent spotlight.

In the latter half of the 90s, a businessman who has been exporting and importing North Korean cultural and daily necessities while coming and going from North Korea met a reporter on the 30th in Dandong and relayed this anecdote, “I have returned to China after having received “honored” treatment from all customs officials under the Shinuiju customs director. That is the first time I received such treatment in the 10 years I have been conducting the trade business.”

The story of the businessman has also apparently become noteworthy news in the Dandong customs office in China.

The businessman is supposed to have earned huge gains by handling North Korean porcelain since the latter half of the 90s. Thus, for long-term gains, he supported the arts and culture projects for the idolization of the Kim father and son in North Korea under his company’s name.

Subsequently, a North Korean writers’ company recently invited him and showed him several sights in North Korea and relayed a gift (edibles) under Kim Jong Il’s name afterwards.

The businessman, after eating the goods he received as gifts in the hotel he was staying in at the time, left with the “certification of gift” in his bag as his souvenir.

He said, “At the time, in Chosun (North Korea), I acquired quite a bit of North Korean silk for gift-giving to close acquaintances, such porcelain and paintings of famous artists. However, the cargo was heavier than expected, almost one carload (2.5 tons trucks). From Pyongyang to Shinuiju, I arrived without much mishap because transportation was provided, but passing through customs was not an easy feat.”

“The North Korean customs unpackaged all goods, so they started going through my stuff as soon as I arrived. Also, they started going through the bag I was carrying and the eyes of the inspector became fixed as the goods were taken out one by one. He had seen the “gift certification” inside a red case.”

Further, he added, “The customs officer verified the name of the certification and my passport and quickly went into an office with the ‘certification.’ Shortly after, the customs director came out and ushered me into a reception area and asked about the context for my receipt of the gift.”

At the time, the customs director had said, “You are a distinguished person who has done a huge work for our country. We did not recognize that. Please let us know if there is anything you are uncomfortable with. Whatever it is, we will help you.”

Then, he is supposed to have ordered the lower level officers, “Using the customs car, make sure that this person’s luggage arrives safely in China without any damage.”

He said that a single piece of Kim Jong Il’s “gift certification” carrying so much weight was beyond the expectations of not only himself but the Chinese customs personnel.

Another related source of the Dandong customs office said, “We were surprised that a single piece of the “gift certification” could wield such power. This event became a famous anecdote within the Dandong customs office.”

Daily NK
Kim Min Se
8/31/2007

There is one place that traders curse every time they pass through North Korea and China. That is towards the corruptive and fastidious North Korean customs officers.

It is widely known that North Korean customs officers blatantly seek bribes and extort goods justifying it is for inspection.

As more and more citizens became disgruntled by the security at customs, North Korean authorities enforced strict investigations towards customs officers. However, tradesmen who travel in and out of North Korea comment that the corruption occurring at customs is still prevalent.

Wang Hae Dong (pseudonym), one tradesman who has been bringing goods manufactured in China into North Korea for the past 10 years said on 29th, “It’s becoming harder and harder to bring goods into the country because of the demanding customs officers” and “There is nothing left if you bring 100,000 yuan amount of goods as there are now many tradesmen who have been specifically sent from North Korea to acquire items manufactured in China.”

Wang, a Chinese merchant born in North Korea has been living in North Korea for over 20 years and now runs a trading company which sends items for daily living to North Korea.

Wang said, “Not only is it becoming harder to earn money but when customs officers speak rudely and undergo picky inspections, I don’t want to trade anymore and want to give everything up.” He said, “What’s more annoying is the fact that goods disappear every time inspections are made and yet there is no where to make complaints.”

“Losing one or two items of clothing is nothing. I am lucky not to get bundles of clothing taken away from me” he said.

He said, “I barely make a profit of 0.2~03 Yuan from a piece of clothing bought for 10 Yuan. I import about 5 tons of goods in 3 trucks in one go (worth 1million Yuan) but after I sell all of the goods, I’m left with about 3~40,000 Yuan. After delivery fees and taxes, there are many times I’m left with only 10,000 Yuan but when one or two bundles of goods disappear, the work becomes worthless.”

Irrespective of importing or exporting goods to and from China, all items must undergo thorough inspection at customs. Nothing is exempted from goods transported by car or containers to individual pockets and even purses.

Local traders describe the scene of North Korean customs officers opening and inspecting every piece of item as pandemonium.

Many goods also become damaged despite have been well packaged as they are roughly handled by officers. Losing one or two items is common, though there are cases where even whole boxes are lost.

Wang said, “As of 2 years ago, money was given to Chosun superintendents with an import license to clear goods because Chosun customs was so selective yet still goods went missing. What can I do? I still take goods to Chosun once a week, 4 times a month. Don’t I just have to accept the fact that I can’t redeem the lost money?”

Regarding the reasons why North Korean customs officers scavenge through all the goods like searching for lice, Wang said, “Isn’t so they can find another reason to collect extra money?” and “I think that’s what they live off.”

He added, “Every time I pass through Chosun customs, the customs officers seem like the prison guards and I feel like a criminal who is paying for his crime.”