Archive for the ‘Black markets’ Category

State of the market in the DPRK

Tuesday, December 11th, 2007

Institute of Far Eastern Studies (IFES)
NK Brief No. 07-12-5-1
12/11/2007

North Korean authorities are increasing market regulation. Beginning December 1st, women under the age of 49 were prohibited from running businesses in Pyongyang. Age restrictions were placed on female merchants since the inter-Korean summit meeting in October, at first prohibiting those 39 years and under, but now includes anyone under the age of 49.

In North Korea, because males are officially required to be at their assigned workplace, women generally run the businesses. However, market regulations started being enforced in order to eradicate South Korean dramas, movies, and other so-called non-socialist elements from the marketplace.

According to the results from a Daily NK survey on the present state of the North Korean marketplace, although market activity has slowed, these new regulations are not being enforced aggressively outside of the cities, and businesses still continue to operate because the regulation officers are receptive to bribes.

Also, because of the direct link between business regulations and the issue of making a living, citizens’ voices of opposition are getting louder than ever. Let us explore the present state of the North Korean marketplace.

Although not an exact statistic, it seems that there are roughly two to four marketplaces within a city. In the case of the most-populated city, Pyongyang (19 districts), there is a marketplace in every district. Tongil-geori has two because of its large population. In Sinuiju, the bridgehead of trade between North Korea and China, there is one in South Sinuiju, and three in Sinuiju itself (Chaeha, Namjung, and Dongseo [The Peace Market]). In North Korea’s second largest city after Pyongyang, Chungjin, there are two marketplaces in the larger districts. In the case of counties, there is a town marketplace, and one to two smaller farmers’ markets.

The marketplace is generally active, except during the rice-planting and harvest period. However, it has become very stagnant recently due to the enforcement of restrictive measures like price regulations and age restrictions on merchants. For instance, in Pyongyang, there used to be around 50-60 merchants in one area, but now there are only 7 or 8. Now, It is that much more difficult to find good products at the market.

Stallholders’ daily earnings differ depending on their products. In the case of agricultural goods, merchants earn an average of 3,000 won per day, and around 5,000-6,000 won per day for marine products. Merchants who sell manufactured goods could make around 10,000 won.

In addition to the age restrictions, there are increasing measures regulating products sold at the marketplace. There are officers who patrol the marketplace enforcing regulations. Outside the marketplace, safety officers regulate the businesses. The level of control depends on the person, but if bribes are given, they tend to slack off.

With exception of large cities in North Hamkyong Province such as Hoeryeong, Musan, and Chungjin, market activity remains ‘business as usual’ in smaller cities and counties, despite the regulations.

Because everyone knows each other in small cities and counties, it is not possible for the regulations to be strictly enforced. Moreover, even in main cities, there are many merchants under the age of 40 who carry out their business, and if they are not able to in the marketplace, they are still able to sell products in alleys and other locations.

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North Korean Children Have to Learn Computers As Well

Friday, December 7th, 2007

Daily NK
Han Young Jin
12/7/2007

In North Korea nowadays, individual-use PCs concentrated in Pyongyang and Chongjin, Shinuiju and other large-size cities have been gradually increasing. The trend has been rapidly increasing due to the propagation of computers by North Korean party organizations, the administrative committee office and middle schools.

The computerized citizen registration project by the North Korean village office was completed around the Local People’s Assembly representative elections last July.

A source from Shinuiju, North Pyungan said in a phone conversation with DailyNK on the 5th, “Provincial organizations and the village office are taking on computer-based projects. Large-city wealthy people are also acquiring computers left and right due to their children’s education.”

The new-rich class, who have made huge profits from recent trade with China, believe gradually that “The outer society cannot do anything without computers. Our children have to learn computers, too, to not get behind.”

A majority of computers provided to North Korea are Chinese and South Korean-made and have entered through official trade with North Korea, but a portion has been going through smuggling. South Korean computers, with the exception of Korean software, are permitted. North Korea uses North Korean word processors, such as “Dangun” and “Changduk.”

A portion of the upper-class use the new model computers smuggled from China, but a majority use secondhand Pentium IV-processor or below imported from China. In North Korea’s Shinuiju, a computer (Pentium II) which includes a used CTR monitor is 100~120 dollars and a computer which includes LCD monitor is 300 dollars. The offering price for a used laptop is around 300 dollars.

He said, “People cannot connect to the internet via computers, but can use most programs set up on computers. The resident registration computerization project has been completed and in Pyongyang, networks between libraries are in operation.”

North Korea is the single country in the world that is not connected to an internet cable network. North Korea, while being endowed with the national domain suffix, “kp”, does not operate a domain. People cannot use internet, but can use software programs set up on individual computers such as MS-Word, Excel, and Photoshop.

In North Korea, after 2000, the import of used and new computers from China, Japan, and South Korea through individuals and companies increased dramatically. Around 2001, around 2,000 Samsung, LG and TriGem Computer were provided to North Korea’s main colleges such as Kim Il Sung University and Kim Chaek University of Technology.

Mr. Kim said, “Chosun (North Korea) people prefer LCD monitors, not CTR monitors. Computers that have been coming in North Korea are mostly made in China and South Korean computers such as Samsung, LG, and TriGem Computer have been widely distributed as well.”

Electronic Publications Service using Domestic Network Possible

North Korea prohibits internet, so computer education mostly focused on program usage are taught in colleges and high schools. In schools for the gifted and college computer majors nationwide, a new generation of software developers is being nurtured.

Major organizations in the area of software development are Chosun (North Korea) Computer Center (KCC), Pyongyang Program Center, and the Academy of Sciences.

Since 2002, North Korea has created a network connecting the libraries of Grand People’s Study House, Kim Il Sung University, and Kim Chaek University of Technology. The network has been expanded throughout Pyongyang and the provinces. Currently, a few high officials in Pyongyang can use reportedly the Grand People’s Study House’s electronic publications service at home.

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North Korea’s Hyesan Jangmadang Prohibits Sale of Medical Products

Tuesday, December 4th, 2007

Daily NK
Moon Sung Hwee
12/4/2007

An internal source conveyed on the 30th that due to an extreme decree which prohibits all sales of medical goods, the suffering of citizens has been increasing.

The source maintained that “In August, the sale of medical products was banned, and by the start of anti-socialism inspections in September, no medical products could be found in the jangmadang.”

The North Korean authorities have long since stated its position in prohibiting the sale of medical goods, saying that the sale of medical goods in the jangmadang is a show of democracy that undermines the national medical system. However, regulations usually never went beyond formalities.

Recently, however, anti-socialism inspections have been conducted on a large-scale in Yankang with the theme of “Abolishing capitalist trends in the market.” Medical products, which are mostly from China and South Korea, have been regulated more aggressively. Some have said that the authorities have strengthened regulations due to frequent incidences involving Chinese sub-standard medical products.”

With the harbinger of regulation of medical products, pharmaceutical vendors have sold medical products to their acquaintances on a limited basis. The price has increased significantly as well. Chinese-made aspirin, “Zhengtongbian”, which costs 20 North Korean won per pill, has hiked up to 30 won. A bottle of anti-diarrhea medicine has increased from 150 won to 300 won and penicillin from 120 to 200 won.

Especially the smuggling of Electrolyte Solution, used in IV’s to hydrate hospital patients, has stopped due to regulations, causing a jump in price.

From mid-August to the end of October, the anti-socialism inspections in Hyesan, Yankang were cooperatively conducted by the central Party, the Prosecutor’s Office, the National Security Agency and the People’s Safety Agency. Along with the strict regulation of cell phones, the market, and capitalist “corruption,” the medical goods ban has cast a heavy burden on the civilians.

“Good Friends” reported in October that “Thirty people have been incarcerated as a result of the anti-socialism inspections in Yankang since mid-August, and regulations have tightened.”

When the sale of medical products completely ceased in the markets, citizens and doctors who must treat their patients have been extremely disgruntled.

The source said, “People have to go to the homes of pharmacists in order to buy medicine, but they cannot if the pharmacists do not know them personally. The price has increased dramatically due to the regulations of medicinal products.”

“Even hospitals do not carry medicine and there is no way to procure them, even at doctors’ request.” Doctors have complained, saying “Are we supposed to just sit by and watch the sick people?”

A majority of medical products that could be found in the markets were Chinese-made contraband goods. In some cases, Party leaders or army hospital leaders have illegally procured medicine as well.

The source commented that when civilian discontent rose, the Party Municipal Committee explained the cause of the cease in sale of medical goods as, “In a socialist society, hospitals have guaranteed medical goods, but during this temporary time of suffering, some immoral people have hoarded the national medical supply and are making a profit.”

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Widespread embezzlement among party officials

Monday, December 3rd, 2007

Daily NK
Jung Kwon Ho
12/3/2007

The North Korean authorities are intensifying efforts to crack down corruption and embezzlement prevalent among party cadres.

Lim Sang Il (pseudonym, 43), a native of Pyongyang, said, “The state excommunicated and dismissed both the chief secretary of the Party in the Daedonggang district and the head of the foreign currency-making activity organization. They were found to have embezzled money earned from cocoon business for the past ten years.” Mr. Lim, currently staying in Dangdong, China visiting relatives, said, “Words are circulating around that they extorted over 10 million dollars.”

Mr. Lim said, “The factory manager of the Sangwon Cement Complex located near Pyongyang took his life when he heard the news that he was suspected of corruption and the state inspection group against anti-socialist trends was about to come down to see him for inspection.”

“This manager was notorious for corruption. For years, he had extorted money from the factory and used it for his own use,” Mr. Lim said. “It was widely gossiped that this man killed himself because he knew that his would receive capital punishment considering the severity of his corruption.”

A source from Sinuiju in North Pyongan said in a phone conversation with DailyNK on the 28th of November, “The chief secretary of the local Party in Woonjeon, North Pyongan Province, was expulsed from the party and fired from his job after he was found to have extorted money allocated for public construction works.”

“There are constructions going on in Woonjeon, tearing down old houses and building new ones,” the source said, “However, no one has ever asked people’s permission for constructions in the first place and provided temporary housing for people until the completion of construction works, and that, of course, angered many people.”

“All of a sudden, those without money ended up being homeless whereas those with money became able to purchase two to three houses at affordable price,” said the source.

“Expressing their anger aggregated over time, the local people led by the old directly sent a written protest to the central Party and filed a complaint,” the source said. “After all, the inspection group had to come down to Woonjeun and dismissed the chief secretary of the local Party and head prosecutor.”

“The inspection group discovered that these men were hiding a significant amount of money in their houses,” the source said. “It was so much that the inspectors couldn’t count the money and had to weigh stacks of bills in the scales.”

“Conspiring with the construction manager, the chief secretary accumulated money by overpricing construction materials and selling newly constructed houses,” said the source. “The head prosecutor accepted huge bribe on condition that he should turn down pouring complaints and contesting reports from the locals.”

In regard to the recent incident where some machinery from the Suncheon Vinylon Complex was smuggled to China, the state has dismissed many high-ranking officials implicated in the smuggling such as the chief secretary of South Pyongan Province, the chief secretary of the local Party in Suncheon, the city’s public prosecutor, and director of safety agency and foreign-currency making organization of the city.

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Recent DPRK market restrictions extended to mobility of the people

Tuesday, November 27th, 2007

Institute for Far Eastern Studies
NK Brief No. 07-11-27-1
11/27/2007

Following Kim Jong Il’s August 26 announcement that, “Markets have become anti-Socialist Western-style markets,” measures to increase restrictions on markets across North Korea have also restricted individuals’ ability to migrate.

The Central Committee of the (North) Korean Workers’ Party released a statement in October, revealing that Kim Jong Il had stated, “The current state of anti-socialism should not be moderately opposed. A strong and concentrated attack must be laid out in order to thoroughly eliminate [this anti-socialist behavior].”

According to the Daily NK, an informant inside North Korea revealed that authorities are “contacting people who have applied for permission to travel to other regions at their trip destination and setting up interviews in order to verify that interviewees are conforming with their [stated] intentions,” and, “ultimately, long distance wholesalers are restricted in their movements, cause a reduction in the amount of goods circulating on the markets.”

Good Friends, a South Korean NGO for North Korean aid, also reported, “In North Hamgyung Province, if someone is absent from work for two days or not seen in their neighborhood, that person’s actions are carefully investigated,” and, “if someone does not check out, each of their family members are called in for interrogation.”

After the ‘Arduous March’, as market activity grew in North Korea, the number of whole-saling ‘middle-men’ grew considerably. These traders received travel permits by applying under the guise of visiting authorities, family matters, special occasions, or other personal reasons. Long-distance traders need a travel permit. In order to get such a permit, cash or goods were frequently offered as bribes.

Now, as it is becoming more difficult to receive travel documents, not only long-distance traders but also even normal vacationers are facing growing difficulties. In particular, people who need to travel to China for family visits are especially worried due to the increasingly strict issuance of travel permits.

The insider reported, “As markets grow, because wholesalers are gaining power as they make large amounts of money, authorities seem to be strongly restraining them,” and “if a wholesaler is caught, his goods are taken, leading to difficulties for market traders.”

According to a North Korean defector in the South with access to DPRK information, university students in Pyongyang are also being subjected to increasingly strict personnel inspections and restrictions. Even when they go to the library, they must fill out an exit record and can only remain out for one day before student leaders pay a visit to their home.

Students not strictly obeying school policies have their bags and pockets searched while being put under investigation and being further restricted. Of course, in the past, as well, students with problems faced inspections of their dormitory or personal goods, but recently, inspections of even everyday students are on the rise.

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Selling to survive

Wednesday, November 21st, 2007

Financial Times
Anna Fifield
9/19/2007

Pak Hyun-yong was, by North Korean standards, an entrepreneur. Too much of an entrepreneur. During the famine that ravaged the country in the late 1990s, Mr Pak watched his family die of starvation – first his younger brother, then his older sister’s children. Then, eventually, his sister too.

Somehow he pulled through this period, dubbed by the regime as “the arduous march”, and was spurred into taking some very non-communist, almost subversive action. He began selling noodles.

Every day he would take 10kg of “corn rice” – a poor North Korean imitation in which dried kernels are fashioned into grains – and turn it into noodles. Then he would get on his bicycle and pedal around his home town of Hamhung on the east coast, bartering the noodles for 12kg of corn rice: 10kg for tomorrow’s noodles and 2kg for his remaining family.

“The police would come by and try to persuade me not to sell the noodles, saying that I should not succumb to capitalism and that the Dear Leader would resolve our food shortages,” says Mr Pak, who escaped from North Korea a year ago and is upbeat and energetic considering the hardships he has endured.

Now 32, he is in hiding in a bleak, remote village in northern China not far from the North Korean border, together with his wife, with whom he escaped, and their new baby. They live in a one-room house with no bathroom – protected by locals who are helping them settle.

“The [North Korean] police even threatened to imprison me if I didn’t stop selling. Suddenly I realised that North Korea was a country where they would stop people’s efforts to survive,” he says, sitting on the warm floor of his house, still dressed in the apron he wears to work in a nearby butchery.

“I heard that China was a rich and modern country – that they had tractors and that people could eat rice every day, even in rural areas,” he says, shaking his head. “Chinese dogs wouldn’t eat our rice – they would ask for better.”

In almost 20 interviews along the border with China, ethnic Koreans born in China and North Korean escapees, some of whom had been in the isolated state as recently as two months ago, describe a country where change is taking place from the ground up rather than under the direction of its leader, Kim Jong-il.

North Korea remains the most tightly controlled state in the world. But recent escapees tell of the changes that are being driven by necessity in areas near China, especially in the cities of Rajin and Hoeryong in the north and Sinuiju at the southern end of the border.

While it would be an overstatement to say that this represents the type of nascent transition to free-market reforms that has occurred in countries such as Russia and China, the worsening state of the North Korean economy is leading to widespread trading and the emergence of a fledgling merchant class crossing into China, the escapees say.

Some agricultural markets – rather than just state markets – were permitted during the “economic improvements” of 2002, but ad-hoc markets have since sprung up around the country with the tacit approval, if not the encouragement, of the regime. These markets are now the backbone of North Korea’s creaking economy as the regime provides almost nothing by way of rations any more.

The parlous state of the economy is probably the driving factor behind Mr Kim’s decision to roll back his nuclear programme. The six-party denuclearisation talks are making surprisingly good progress, analysts say, as his regime seeks heavy fuel oil for its rusting industries and an end to economic sanctions.

Certainly, recent escapees from North Korea describe a desperate situation inside the country. Somewhere between 10,000 and 30,000 North Koreans are thought to be living in hiding in the north-eastern provinces of China, especially in Jilin and Heilongjiang, areas considered backward by Chinese standards.

The Financial Times travelled throughout this region to meet North Koreans while seeking to avoid endangering their lives. (North Koreans who are repatriated from China face detention in labour camps or worse, and even those who are not caught put the lives of family members at risk by talking to journalists. For that reason, names have been changed.)

“In Rajin, all the factories have stopped,” says Oh Man-bok, a 22-year-old who escaped in September from the city near the borders with Russia and China, considered relatively prosperous because it is one of the North’s main trading channels. “The men still have to go to work and have their name checked off but there is nothing to do. Sometimes they sit around and sometimes they go home. They don’t get paid but sometimes, in a good month, they get 15 days’ worth of corn in rations,” he says.

That means women are increasingly becoming the breadwinners, going to the mountains to collect edible plants or to the market to sell home-made snacks. “People survive by selling. They do whatever they can to earn money – selling fried dough sticks or repairing shoes and clothes,” Mr Oh says. “But it’s very difficult to earn enough to survive and even in Rajin, many people have to eat porridge made from the whey left over from making tofu.”

Rajin and Sinuiju, as the main thoroughfares for trade with China, have been more open than the rest of North Korea for some time, but the experiment with capitalism that has been taking place in these two cities now appears to be expanding to Hoeryong.

The city of Hoeryong can be clearly seen from the Chinese side of the border, which is marked by a shallow river only 20 metres wide in places. On the bridge between the two countries, the Financial Times watched North Korean trucks trundle into China and dozens of Chinese – and a few North Koreans wearing badges stamped with the image of Kim Il-sung, Mr Kim’s late father and founder of the state – lug bags across.

A Chinese border official says that about 100 a day cross the bridge from the Chinese side, mainly going to visit family members, although in summer as many as 300 go on tour packages to the beach on North Korea’s east coast. About 10 North Koreans a day cross into China for trading or to see their relatives. “With Rmb1,000 [$135, £65, €92] they can come to China even if they don’t have family here. So they often borrow money to come here and buy things for trading in the market in Hoeryong,” the official says.

Bribery appears to be becoming more widespread as trade and travel increases – from a few cigarettes needed to pass through internal checkpoints to the few hundred renminbi expected at border crossings. “Everyone wants to be a border guard these days,” says one Chinese-Korean trader. “They don’t explicitly say, ‘Give me money’ – they just keep going through your paperwork and asking you questions until you offer them money.”

Again, Pyongyang seems to be aware that this is happening and allows it as a way to keep people happy – rotating border guards every six months to give officials from around the country a chance to earn extra money, according to escapees.

In Hoeryong, the market used to be beside the bridge on the outskirts but this year it was moved to a school building right in the centre of town. Its 180,000 residents enjoy a relatively privileged existence because Kim Jong-il’s late mother was born there.

The market has become central to the city and to people’s lives, driven by grassroots demand, says Song Mi-ok, an ethnic Korean living in China who has made several trips to the city recently. She has gained access by visiting fake relatives, a family to whom she pays Rmb1,000 every time she pretends to visit them.

“You can find everything there,” she says of the market, which opens at 7.30am and closes at dusk. “People usually start by selling food that they have grown or made, using the profits to move into goods trading.”

North Koreans say one can buy everything in the markets “except cat horns”, as their expression has it. Rice given as aid from South Korea is on sale and people even display the bag – even though they risk having it confiscated by the authorities – because people know that South Korean rice is of high quality, Ms Song says.

One kilogram of rice in Hoer­yong market costs 900 North Korean won – a huge amount in a country where the average wage for a government employee is about between 3,000 and 4,000 won a month, or slightly more than one US dollar.

“There are a lot of people buying and it’s all money trade; there’s no bartering now,” Ms Song says. “North Koreans are poor, so it’s quite surprising to see people with a lot of money. They don’t receive money from the state – it’s all money they have made themselves.”

One Korean-Chinese man who visited relatives in Hoeryong last year also describes an increasingly active drug trade. It is not uncommon, he says, to be approached by people in their twenties or thirties selling a white narcotic called “ice” – probably a form of crystal methamphetamine. The drug fetches 20 times the North Korean price in China, making smuggling a lucrative business, but the punishment for drug trafficking in China is so severe that Hoeryong dealers try to sell it to visiting Chinese.

The markets are thriving thanks to new border regulations. While the number crossing illegally has dropped because of tighter restrictions in both countries, the number of North Koreans who are allowed to cross into China legally has steadily increased, according to several Korean-Chinese who help those who make it across the border.

North Koreans with relatives in China but not in South Korea are allowed to apply for passports to cross the border. This is creating a new group of migrant workers – those who are legal but working for themselves and their families rather than for the state. “Young people come here to work for one or two months and earn some money – they’re coming from Pyongyang as well as the regions,” says Ri In-chol, an ethnic Korean missionary from China who supports border crossers, legal or otherwise.

“They pay Rmb300-Rmb400 to get a passport and then they can cross. There is now a much freer flow because Kim Jong-il realises that this is the only way to keep the people alive. They take back money, used sewing machines and used clothes from their relatives that they can sell in the markets,” Mr Ri says.

Although Chinese clothes are most prevalent, North Koreans prefer South Korean products for their higher quality. “The labels have to be cut out of South Korean clothes, so if they don’t have a label then people assume that they’re South Korean and they like them more,” says another Chinese-Korean who has recently visited Rajin.

Indeed, Mr Ri says that North Korean officials are picky about what they will let through. “When North Koreans come to China they are allowed to take used clothes back. But when Korean-Chinese people want to give clothes to their relatives in North Korea, they have to be new because otherwise the officials think they are being looked down on,” he says. (Jeans and short skirts, seen as representative of American immorality, are still not allowed.)

The economic changes – particularly the lessening dependence on the state – are potentially destabilising for Mr Kim’s regime because they weaken the tools of control. That means that there is a fine line between what is permissible and what is not. “Kim Jong-il is tolerating this much openness because people need to survive, but if he wakes up one morning and sees capitalism is spreading too far, he will order it all to be stopped,” says Gao Jing­zhu, professor of Korean studies at China’s Yanbian University, near the border.

“North Korea is small, so if there is too much change it will threaten the sustainability of the regime and it will collapse,” Prof Gao says. “North Korea is in a dilemma.”

Good Friends, a Seoul-based civic group that monitors life inside North Korea, this month said Pyongyang was cracking down on women working in street markets. “The authorities have judged that female merchants have reached a point that threatens the country’s government,” Good Friends quoted a North Korean official in China as saying.

“The men are tied to their workplaces but they don’t receive proper rations,” the official reportedly said. “This has shifted the men’s burden of supporting their families on to the women. With trade directly linked to the people’s survival, the crackdown isn’t going well.”

Indeed, it may already be too late. The increased economic interaction with China means that the flow of information to North Koreans is steadily increasing. “People’s awareness and illusions have changed,” says one Chinese-Korean who drives trucks into North Korea.

This is just the kind of contact that threatens Mr Kim’s regime, which has kept the 23m-strong population under control by cutting off access to the outside world and telling them they live in a socialist paradise. Mr Ri, the missionary, says: “People living in open areas like Rajin and Hoeryong are more exposed to the outside world but that is not the case when you go further into North Korea. So even if it is becoming more open, you never know when that is going to change. They will still come after you if you are involved in political activities.”

But recent escapees from North Korea say that people are increasingly discussing – in private – one topic that they say would have been unimaginable until very recently: the eventual death of the Dear Leader. “State control is still as strong as before but now, when people gather together as families, they say that the system is really wrong. That never used to happen before,” says Mr Pak, the man who left Hamhung last year.

“Kim Jong-il always says he will feed the people and make them happy, but that has not happened. There are many people who hope that Kim Jong-il will die soon,” he says, shrugging his shoulders. “I have to admit it: the state is already kind of breaking down.”

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The North Korean Authorities Control Sales Items And Prices at Markets

Friday, November 16th, 2007

Daily NK
Lee Sung Jin
11/16/2007

It is reported that the North Korean authorities have been regulating Jangmadang (markets) by placing age limit on who can do business in the market and controlling sales items and prices.

45-year old Ahn Hyuk Jun said in an interview with DailyNK conducted on Wednesday, “A decree is posted at the entrance to many markets in Pyongyang that the state would control sales prices and the quantity of sales items.” Ahn, a resident of Pyongyang, came to Yanji, China on November 4th to visit his relatives.

Mr. Ahn said, “According to the decree, the state forbids merchants from bringing out more than 15 items for sale and selling more than 10 kg of sea products in the market.”

The decree is another controlling measure of markets adopted by the state. Previously, the state has conducted a campaign to fight anti-socialist trends appearing in many market places. Moreover, it has banned female merchants who are under the age of 39 from doing business in the market. In Pyongyang, the age limit is 49. It seems that North Korea has adopted a rather extreme measure as both the number of people engaged in business and products circulated in the markets continue to increase.

However, few merchants would follow the new measure which limits sales items and prices because they cannot make a profit that way. It is certain that the new decree would likely turn out futile.

Mr. Ahn said, “For example, the decree lowered the price for octopus from 3,700 won/kg to 2,200 won/kg, and the price for flatfish from 3,500/kg to 1,800/kg.”

Ahn said, “No one in the market would abide by the state decree at the risk of losing profit,” adding, “many merchants would bring out items for sale that are low in quality and matches the state-imposed price anyway. However, a real business is done in a clandestine manner.”

According to Ahn’s explanation, the real business is done as follows. Many merchants on their way to the market stop at neighboring households and unload their sales items. Then they pay the households to keep their items there. At the market, they bring out low-quality items on sales stand, and post a sign with a list of real sales items right next the stand.

When there are customers checking the list, merchants approach to them and begin bargaining. Once it is done, they both come out of the market and go the household where the merchant hands over the asked item to their customers.

Ahn said, “Overall, many markets of Pyongyang are stagnant due to the state regulation on market transactions.” He added, “Many Pyongyang citizens argue that the state, instead of distributing food, should allow them to do business in the market so that they can make a living.”

“There is a rumor that Kim Yong Il was appointed as the prime minister because he pledged to close all markets,” Ahn said, “Many people worry that a man who lacks knowledge about how money works is now in charge of the nation’s economy.”

Good Friends, the Seoul-based relief organization dedicated to North Korea also reported yesterday that the North Korean authorities have lately produced a great amount of lecture material which bans business activities across the country.

According to the lecture material, the authorities asserted that market transactions would destroy North Korea’s own socialism from within and facilitate the infiltration of capitalism into the society. They urged that the state should strengthen mass ideological training in order to educate the public about why it is important to place age limit on who can do business in the market.

As mentioned earlier, North Korea has banned females under the age of 39 from doing business in the market. There is a rumor that the state would increase the age limit to 45 at the end of this year.

In North Korea most working age females are forced to work at factory complexes. In Pyongsung of South Pyongan Province, the state sends out a dispatch to local females under the age of 30 in order to have them work at neighboring factory complexes. However, few would actually work at the designated complexes because many complexes already have enough workers. Even if they could get a position at factories, it is reported that those employed barely receive wages and food distribution.

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New restrictions on DPRK market trading

Thursday, November 15th, 2007

Institute for Far Eastern Studies
NK Brief No. 07-11-15-1
11/15/2007

Recently, North Korean authorities have adopted a measure prohibiting women under the age of forty from selling goods in Pyongyang markets. According to DPRK media sources, as internet videos of footage shot in Pyongyang markets by hidden cameras have emerged, and have been viewed with great interest by many in South Korea, authorities have increased restrictions on the markets. Just since last month, three videos shot in Pyongyang’s Sungyo Market have been shown on Japanese news programs.

While currently, North Korean authorities are carrying out a campaign preventing trading in markets by women under the age of forty, the age requirement for trading will be raised to forty five in North Hamkyung Province beginning this December. Women’s groups are said to be fiercely opposing the move. Pyongyang City’s People’s Committee recently passed down an order for women under the age of forty to return to work in offices, however businesses were in no position to take on new employees due to the small scale of work available and current overstaffing, and were unable to provide wages or rations, leading to the failure of the new policy. The authorities’ current restriction on market trading, aimed at pushing these women back to government-assigned work, will likely not last. Because almost all North Koreans, including the authorities, rely on the markets to sustain their lifestyles, market restrictions cannot be anything but temporary.

According to a domestic publication by the DPRK Workers’ Party obtained through diplomatic channels, North Korean authorities are calling for “a crackdown on markets that have degraded into hotbeds of anti-socialism.” An article published last October in the name of the Workers’ Party Central Committee reported that the Kim Jong Ill had stated, “the current state of anti-socialism should not be moderately opposed. A strong and concentrated attack must be laid out in order to thoroughly eliminate [this anti-socialist behavior].”

This report continued, “Citizens can ease their lives by using the markets, but currently [markets] have degenerated into areas that cause disorder to national discipline and social conditions,” and, “in any city tens of thousand of traders are out on the roads, disturbing pedestrian and vehicle traffic.” The article went on to criticize, “and an even more serious problem is that most women of hirable age are trading in the markets,” and, “women who received a high-school education through the benevolence of the State and Party and dismiss their responsibilities by falling into trade work are throwing away fundamental conscientiousness and even faithfulness.” This article amounts to the Party’s recognition of reliance on markets by everyone, including government officials, and the rampant anti-socialism in the air around these areas.

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Inspecting Markets, the Hotbeds for Anti-Socialist Activity

Thursday, November 15th, 2007

Daily NK
Kwon Jeong Hyun
11/15/2007

North Korean authorities have recently tightened regulations in markets as a warning against private economics, according to inside sources.

The regulation of Pyongyang markets has continued since President Roh Moo Hyun’s visit to North Korea in the beginning of October. North Korean authorities closed all markets in Pyongyang during the Inter-Korea Summit under the whitewash of mobilizing a welcoming crowd. Afterwards, when it reopened the markets, street venders and women under the age of 40 were restricted from engaging in business.

The North Korean inside source said in a November 12th phone conversation that “With the increase in Pyongyang markets, the authorities are not looked at in a favorable light. Regulations worsened after President Roh’s visit to Pyongyang.”

“A week or two before President Roh’s visit, regulations became strict, such as prohibiting outsider visits to Pyongyang and ceasing the operations of the jangmadang (markets). From that point on, the jangmadang has been persistently regulated.”

Leading up to the Inter-Korea Summit, North Korean authorities implemented other civilian regulations as well, such as issuing “special travel permits.”

One Pyongyang trading company head, currently in Dandong, China, said in a meeting with a reporter, “Regulations were tightened after word got out that a clandestinely filmed video clip showing Pyongyang markets had been widely broadcasted in South Chosun (Korea).” He surmised that a clip showing Pyongyang’s Sunkyo Market has been broadcasted on Japanese news programs three times since last month.

He also said, “A decree was issued by the Pyongyang People’s Committee that women under the age of 40 should be employed in enterprises. Our enterprise received the same decree, so we have to take in 200 female workers.”

He said however, “Too many workers have been dispatched, even though our enterprise business is not that large. We objected, saying that we can not receive them because we can not even give them provisions. Other enterprises in Pyongyang are in the same position.”

He emphasized, “People go to the market, because the state cannot sustain them. The party leaders also survive relying on the market, so regulation of the market is impossible. Market control can only be a temporary because the wives and daughters of party leaders are in the situation of selling goods as well.”

He also added, “The number of people in charge of general markets is exorbitant across the country. Those who received 30,000 won per month have to go into enterprises where they will only get 2 to 3,000 won. Restricting the market is something nobody wants.”

The North Korean state is currently prohibiting the undertaking of businesses by women under 40. In North Hamkyung Province, the business age limit will be fixed at 45 and above starting in December, so the members of the Union of Democratic Women have put up a significant resistance.

According to an internal Workers’ Party document which has recently come into the hands of a diplomatic source, the North Korean government is supposed to have given the order to “regulate the markets, as they are hotbeds for anti-socialist activity.”

The document, which was published last October under the auspices of the Central Committee of the Chosun Workers’ Party, read, “The Great Leader Kim Jong Il pointed out, ‘In order to absolutely eradicate this anti-socialist phenomenon, we have to unfold a concentrated offensive.’”

The document states, “Civilians were able to attain some comfort through the market; but now, it has deteriorated into a place that breaks societal order and national rules. In one city, several tens of thousands of merchants come out to the sidewalks and even car lanes and have brought about a severe disruption in traffic.”

The paper gives evidence to the fact that the North Korean government itself recognizes the citizens’ growing reliance on the market due to market revitalization, and that anti-socialist activities are rampant.

The document further criticized, “A more serious issue is that mostly women under the age limit are conducting business in the market, and women who have received high-level education under the auspices of the Party and the nation have thrown away their positions to go into sales, an act which forsakes justice and the most basic conscience.”

Additionally, it specifically addressed those who disseminate illegal South Korean film products, “middlemen,” referring to brokers who secretly sell nationally-regulated, military, and electronic goods, and Chapan-Jangsa (selling goods off trucks) who earn excessive profits from wholesales.

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Power and Money Are Necessary to Enter Universities

Thursday, November 15th, 2007

Daily NK
Yoon Il Geun
11/15/2007

Today is the day for the national academic aptitude test in South Korea. In North Korea, there is an entrance exam similar to that in the South, a so-called preliminary examination.

Applicants for admission to universities among senior-middle school students can get letters of recommendation to enter universities according to their test results. When applicable universities are decided for students, they should take the college-specific entrance exams.

There are four kinds of freshmen in North Korean universities: entrusted students (Uitaksaeng), employed students (Hyunjiksaeng), discharged soldiers (Jedaegunyin), and direct students (Jiktongsaeng).

Entrusted students are those who were entrusted or asked to study by a special government or military department. You can be entrusted after you work for the military, National Security Agency, United Front Department under the Workers’ Party or other especial offices for over 5 years. These kinds of departments send their experienced workers who have not yet acquired a bachelor’s degree but have good records to universities in order to promote them. They must return to their positions after graduation. These entrusted students do not need to take the preliminary examination.

Employed students are those who get recommendations to study at universities from their place of employment. Discharged soldiers also have a right to enter the university after completing military service. However, they must take the preliminary examination lead by the Students’ Recruitment Department under the People’s Committee in each city, county or province. After that they can take the entrance exam.

The Students’ Recruitment Department issues letters of recommendation to students according to how they rank on the preliminary examination. For instance, the first and second top-ranking students may be recommended for Kim Il Sung University, the 3rd and 4th ranked students for Kim Chaek University of Technology, those ranking from 5 to 15 may be recommended for universities in Pyongyang, and the rest of students can get the recommendations for local universities.

Direct students are those who enter universities right after they graduate from middle school. The graduation examination for middle school counts as the preliminary exam for direct students.

Since the conscription system was adopted in North Korea in 2002, senior middle school graduates, with the exception of special middle schools such as foreign language schools or No. 1 senior-middle schools, cannot enter universities directly due to their compulsory military service.

Students all over the country take the preliminary exam on the same day, and the graduation examination is also taken on a nationally appointed day. However, graduation examinations differ among senior middle schools.

Grading the exam is handled respectively by the each local university. During this process, bribes in return for raising scores are common. The situation is the same for preliminary exams as well.

Corruption revolving around the examination process is getting more serious. The number of students recruited is determined by a regional quota system. The Education Department distributes an allocated number of letters of recommendation for universities to each middle school.

When the quota for each university is handed down to the provincial recruitment office, cities and counties compete to get more recommendation rights for top universities. This is because the more students a county sends to the universities, the more kickbacks that county will receive.

But in the end, it is evident that money and power, rather than student achievement, present a more effective means of entering universities.

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