According to the Korea Times:
When the South Korean government lifted a ban on the sales and distribution of North Korean paintings in 1998, the southerners’ curiosity in the North’s art surged.
With increasing demands, many works found their way into the hands of South Korean collectors through various channels, notably via China. And galleries in South Korea competed to hold exhibitions.
Soon, it became a fanciful thing among art collectors in South Korea to have a piece or two of North Korean art. A work by a well-known painter such as Jung’s was sold at a minimum of 10 million won ($8,800) apiece.
For cash-strapped North Korea, suffering from a moribund economy, the paintings were more than a piece of art. They also turned out to be a new cash cow. And as in any greedy business, the reputation of the North Korean art market became tainted, as counterfeit and duplicate products started to surface.
Experts believe that most of the spurious acts were actually made inside North Korea. Sometimes the painters themselves were not free from blame either.
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North Korea sells hundreds of paintings by its artists, including those who work for the state’s Mansudae Art Studio in Pyongyang each year to galleries in China – a de facto gateway for North Korea to reach the outside world. The paintings then are sold to South Koreans and other collectors.
But besides the official export quantity of paintings, there are also “unofficial” paintings, entrusted privately by some artists to North Korean merchants who share the profit with the painters after selling them on the black market.
“Of course, the sales of these paintings go unreported,” said Lee. “In North Korea, an artist’s paintings are state property. So, when an artist’s paintings are displayed in countries and if they were illegally sold paintings, the painter will be in a position to deny that it’s his works.”
With the rising popularity of North Korean paintings in South Korea, North Korea sometimes produced low-quality paintings en masse. A few years back, North Korea did some trade with a major South Korean company. Lacking sufficient cash, North Koreans proposed they would make up the payment in arts products. The South Korean company accepted the offer.
“I was called in by the company to examine the value of the paintings. It was a huge container. Inside it was full of paintings. But the quality was all poor.
“I suggested the company burn them all, fearing that if they entered the art market, it would cause disruption with such a huge volume when many people cannot tell their values,” Lee said.
Last April, Lee had a chance to meet with another renowned North Korean painter, Sun Woo-young, in China. When asked about the situation, Sun also reportedly told Lee that only 11 out of 150 paintings, put on sale in South Korea, were authentic.
North Koreans acknowledge that there are forged or duplicate paintings circulating, but insist that they are done in China by Chinese painters. But Lee believes that most forgeries are done within North Korea.
“Chinese counterfeit painters prefer to copy famous Chinese paintings, not North Korean paintings, because selling Chinese paintings can make more money,” Lee said.
The official gallery Web site of the Mansudae Art Studio also recognizes the controversy surrounding the North Korean paintings. On the section of the “Frequently Asked Questions,” one question is: “How do I know the works are original?”
The authenticity debate also comes amid North Korean art’s increasing popularity overseas. In recent years, the North held art exhibitions in a number of countries, including the U.K., Germany, Italy, the U.S. and Australia, receiving favorable reviews.
Lee said for North Korean paintings to be recognized internationally, the transparency of their authorship, distribution and authenticity should be strengthened.
“If quality control is not maintained, selling North Korean paintings the way they do now is like shooting one’s own foot. It will come back to get you.”
So here are the economics: Once the South Korean government eliminated a ban on selling and distributing North Korean art, demand predictably exploded among South Korean collectors. A market developed where North Korean art studios were exporting pieces to Chinese middle men who were then able to resell to the South Koreans. The demand was so high that at one point some North Korean companies were able to pay for imports with North Korean art (though in the case above it did not turn out well).
This would not be so interesting were it not for the unintended consequences.
In the market described above, the rents from economic activity (selling paintings) are primarily divided between the Chinese middlemen and the North Korean art studios. The artists themselves probably received little from the transactions. However, some clever (and popular) North Korean artists figured out they could earn some cash for themselves if they clandestinely produced works of art for export through trusted intermediaries. Under this clandestine trading model, the rents are divided between the artist and his trusted middleman/men. The particular split depends on the relationship between supply and demand–which we do not know. This type of activity is pretty much what we also see on collective farms: farmers produce less for the collective and more from their private plots. As a result individual incomes and private production increase.
This kind of activity however was popular enough to spawn a market in counterfeit paintings! Once other painters realized the kinds of returns that premium paintings were earning abroad, they jumped into the counterfeit business! This of course causes problems in the market for North Korean art because collectors do not know if they are buying an original or not. In the limit, adverse selection could cause the market to unwind.
But this almost never happens because economic problems create opportunities for profit. We know there are organizations and individuals out there who can solve this problem Is there an entrepreneur out there who can get into the business of certifying and registering North Korean art or fund someone who can?
To learn more about this, read the full Korea Times article below:
Fake NK Paintings in Wide Circulation
Korea Times
Sunny Kee
1/7/2009
