According to the Choson Ilbo:
“Wealthy people in Pyongyang prefer goods to cash as they have lost confidence in the North Korean currency since the reform,” it said. “Demand for South Korean goods, which are considered best quality, has more than doubled.”
The broadcaster quoted a Korean-Chinese trader dealing with the North as saying, “Growing numbers of people want to smuggle South Korean products and sell them in the North despite a crackdown by North Korean customs.” It said the widespread perception among North Koreans is that South Korean goods are of much better quality than Japanese or Chinese products.
Sinuiju Customs Office lets small quantities of South Korean goods that do not seem to be for sale pass through on condition that they do not carry “Made in Korea” labels, but is strict about seizing larger quantities.
Favorite products include luxury goods like necklaces and earrings, electronic home appliances such as TV sets, DVD players, digital cameras, and notebook computers, toiletries, air fresheners, and clothing.
Pyongyang is believed to be home to an estimated 1,000 dollar millionaires, the radio station said.
I am a bit skeptical about this story. Given the DPRK’s monetary history, I understand the need of North Koreans to “get out of cash,” but the number of individuals hoarding South Korean goods has to be small. Jewelry aside, manufactured goods are not a reliable store of value. They are hard to hide, difficult to transport, they break down, and require electricity. As for televisions, South Korean TVs operate on NTSC (like the US) and North Korea uses PAL (presumably the “South Korean” TVs are made for the Chinese market and operate on PAL–thanks Gag).
Why not stick with Yuan?
Also, Japanese goods have been considered the paragon of quality in the DPRK for decades. Is it realistic to assume that attitudes towards South Korean goods have changed so much so quickly?
UPDATE: A strong counterpoint to my intuition comes from Dr. Lankov. He notes:
Well, in the USSR of my youth many people did just that. They hoarded industrial goods, in spite of all above mentioned shortcomings. TV sets, VCRs, furniture, glassware, even books. There was a major difference, though: in the the USSR it was strictly illegal and, indeed, risky, to be possession of foreign currency.
Also see this IFES report.
Read the full story here:
Wealthy N.Koreans Hoard S.Korean Goods
Choson Ilbo
3/11/2010
Well South Korean goods are now widely considered best in class in the UL and this change has happened in the last 3 years
If goods are being smuggled from China, the televisions would presumably be South Korean brand items (Samsung or LG, for instance) made for the Chinese market. They’re probably made in China anyway, so there would be no problems with “made in Korea” labels.
That is a good point, but flat screens are still a terrible way to store one’s wealth unless you actually plan on using it….and those who can afford them probably don’t need to store their wealth in TV.
For what it’s worth, I read the following in a British travel article from February:
The author went with Koryo Tours, presumably from Beijing, so it looks as if elite North Koreans who travel to China on business are bringing back televisions and selling them to their friends.
Given the DPRK’s monetary history, I understand the need of North Koreans to “get out of cash,” but the number of individuals hoarding South Korean goods has to be small. Jewelry aside, manufactured goods are not a reliable store of value.
Well, in the USSR of my youth many people did just that. They hoarded industrial goods, in spite of all above mentioned shortcomings. TV sets, VCRs, furniture, glassware, even books. There was a major difference, though: in the the USSR it was strictly illegal and, indeed, risky, to be possession of foreign currency.
Thanks for the comment–I will add that information to the post.
Seems like such a waste to have a flatscreen when all you can watch is KCTV 🙂
probably no waste. Lankov wrote (in, Pyongyang strikes back) that in 2006 alone about 350.000 DVD players were imported in NK from China (there were no restrictions at that time for this specific product). Thus, the more affluent Koreans north of the DMZ will watch the recently popular “Pasta” and “God of Study” dramas with their imported DVD-players, new DVDs and the new flatscreen.