Archive for the ‘Real estate’ Category

Buddhism in North Korea

Monday, January 15th, 2007

Korea times
Andrei Lankov
1/15/2007

Some time in the late 1940s, a young Russian journalist made a tour of the Mt. Kumgang, accompanied by a local official. The numerous Buddhist temples scattered in the valleys attracted his attention, but the official assured the Soviet visitor: “Do not worry, we will take care of them. We will close most of them, and will find a good use for others _ like, say, resorts for the working masses.”

It is difficult to say what the journalist felt back then, but when he recalled this episode in the early 1980s in his memories, his disdain was palpable. But this is indeed what happened to many _ indeed, most _ Buddhist temples in North Korea.

For decades, the North Korean state was almost unique in its hostility to all forms of religion. Indeed, few if any Communist states ever came close to proclaiming and enforcing a complete ban on all kinds of religious activity _ aside from North Korea, such a ban existed only in Albania, another ultra-Stalinist state (Pol Pot introduced the same policy in his infamous “Democratic Kampuchea,” but he did not stay in power long enough).

In the late 1980s, a very limited amount of religious activity came to be tolerated, but for some 25 years, between 1960 and 1985, North Korea had neither temples nor officially recognized religious groups.

However, if all religions are bad for the North Korean authorities, not all of them are equally bad. Some of them are worse, while others were ranked as marginally more tolerable.

For the North Korean regime in its early years, it was the Christianity that was clearly seen as an embodiment of evil.

This attitude was prompted by the fact that Christianity was a recent introduction, with too, too strong connections to foreign powers, above all, to the United States. It was both “reactionary” (as every religion) and anti-national.

The most acceptable religion probably was Chondogyo, or the Teaching of the Celestial Way. Nowadays, this eclectic cult has somewhat waned and does not play a major role in either Korea, but for a century, from the 1860s to the 1940s, it was a important force in the spiritual life of the country.

Its leaders and activists were prominent in two major outbreaks of the nationalist movement _ the Tonghak Uprising of the 1890s and the March First Movement of 1919, and this tradition made the North Korean authorities somewhat more tolerant towards it.

Buddhism fell somewhere between. It could not boast the nationalist credentials of Chondogyo _ on the contrary, in the colonial era many Buddhists collaborated with the Japanese (as a matter of fact, some colonial administrators saw Buddhism as the “religion of empire” and actively promoted it). At the same time, it did not have Christianity’s close associations with “imperialist” powers.

The land reform of 1946, proclaimed by the North Korean authorities (but actually designed by the Soviet military) inflicted the first major strike on Buddhism, and all land holdings of religious institutions were confiscated. This left the monks without any means of existence and drove many of them from the monasteries.

To keep the Buddhists under control, the Korean Buddhist Union was created in late 1945 as an umbrella organization. It did not so much represent the believers as make them accountable to the emerging state bureaucracy. This was a standard device: Similar bodies were created for other religions as well.

While all Christian churches ceased to function immediately after the Korean War, services were held in some Buddhist temples until the early 1960s. It is even possible, even if not particularly likely, that some services continued through the dark age of North Korean religious history, the period between 1960 and 1980.

Of course, the former Buddhist monks were subjected to strict surveillance and numerous restrictions were placed on their social advancement. However, it seems that they fared better than former Christian activists and priests.

The Buddhist Union was quietly disbanded in 1965 _ at least, for years nothing was heard about this body for nearly a decade, and in all probability it fell out of existence for some time. However, from around 1975 the representatives of the North Korean Buddhist Association were again seen at international gatherings where they scorned the U.S. imperialist warmongers and their South Korean puppets, all the while explaining how happy the masses in their country were to be led by the “Great Leader.”

The 1970s and 1980s witnessed a large-scale restoration of old Buddhist temples, and these days there are 63 officially recognized temples in North Korea. Some of them are allegedly used for religious services, but it is not clear when the services are real and when they are nothing but carefully staged performances for the sake of foreign visitors. It is known that nowadays there are some 300 monks in the North, all receiving their wages from the state and taking care of the temples.

Thus, by the standards of North Korean religious policy, the treatment of Buddhism was not particularly harsh. However, it seems that Buddhism is not positioned to experience a dramatic revival in future. It appears that the North will eventually go Christian, and this Christianity is likely to be of a radical, nearly fundamentalist, variety. At least this is what can be guessed from the study of the events of the recent decade.

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Luxuries for North’s elite keep on flowing

Monday, December 18th, 2006

Joong Ang Daily
12/19/2006

Despite United Nations sanctions aimed at preventing the North Korean government from buying luxury goods for its ruling class, government sources here said a North Korean trading company is still busy providing Kim Jong-il loyalists with their perquisites.

Tian Ming Trading Company, in the center of this former Portuguese enclave now with the same China-affiliated status as Hong Kong, says its main business line is carpets, and little more. Three office workers said there were no North Koreans at the company and that it has never traded with North Korea. The company’s president was out of town on business, they said.

But a source with close ties to the trading economy here said that Park Su-dok, a 53-year-old North Korean, is in Macao and obtained a visa as an employee of the company.

Another source said, “Tian Ming is a joint venture by North Korean and Hong Kong investors, and its main business is buying luxury goods from Hong Kong for shipment to North Korea.” He added that Tian Ming’s president, a Hong Kong resident, is buying luxury watches, gold products and expensive liquor at North Korea’s request, using a Hong Kong branch office for the purpose.

Other Macao government officials said 18 North Korean firms were registered in Macao as of late November, and 115 North Koreans carry Macao visas as employees. Twenty have become Macao citizens, they added.

Since Washington threatened to impose sanctions on Banco Delta Asia here, allegedly for helping North Korea launder cash from its alleged dubious business lines, some of those companies have shut down. Ten are still in limited operation, however, these government sources said.

Separately, a South Korean banker in Hong Kong told the Joong-Ang Ilbo that a North Korean businessman had visited him in an attempt to sell gold bars through one of the South Korean bank branches in Hong Kong.

The banker reportedly spurned the overture, although the transaction would not have violated any South Korean laws or regulations on North-South dealings. He said he simply did not want to get involved in such a deal given the international attention being paid to commercial dealings with North Korea. The banker suggested that the offer may have been a sign of the foreign currency problems North Korea is facing because of the UN sanctions and U.S. pressure on financial dealings with North Korea.

Banco Delta Asia has said that between 2003 and 2005, it had sold 9.2 tons of gold bars that it had purchased from the North, where gold production is estimated to be about 25 tons per year, mostly for export.

Wall Street Journal
12/18/2006
Gordon Fairlcough, p.A1

Close-Out Sale: North Korea’s Elite Shop While They Can

A North Korean businesswoman with heavy makeup and a bouffant hairdo studied herself in a mirror as she modeled fur-lined leather coats at a small store in [Dandong, China] this frigid northeast border city.

During a three-day excursion late last month, the woman also tried on shoes and looked at large-screen television sets before buying furniture and fresh fruit and heading home to Pyongyang, North Korea’s capital city.

The United Nations has called for a crackdown on luxury-goods shipments to North Korea as a way of pressuring the country to drop its atomic-weapons programs, which came under new fire after an October nuclear test.

If anything, the uncertainty about the flow of fancy goods appears to have whetted the appetites of some privileged North Koreans — whose impoverished country cultivates a Spartan socialist image.

In Dandong, North Koreans, many wearing lapel pins with a picture of North Korea’s founding dictator, Kim Il Sung, stroll through hotels and department stores. Signs are often written in Korean, with storekeepers advertising computers, karaoke machines and the erectile-dysfunction drugs Viagra and Cialis.

A few North Koreans have bought new cars at a Toyota dealership near the Dandong customs checkpoint, according to a salesman. One man paid about $50,000 in cash for a luxury sedan.

Gold is also gaining a following. Wang Xiaoju, a saleswoman at the jewelry counter at Xin Yi Bai Department Store, says North Korean women come in nearly every day, mostly to buy gold chains and other gold jewelry.

Women from the North also are frequent visitors to a riverfront spa, favoring milk baths and massages, according to staff there. A saleswoman at the Xin Yi Bai L’Oreal counter says North Koreans are regular customers. Among the big sellers: body sculpting cream for women who want to look thinner.

In the first 10 months of this year, Chinese exports of fur coats and fake furs to North Korea soared more than sevenfold from the year-earlier period, according to Chinese Customs figures. Exports of televisions and other consumer electronics were up 77%, while perfumes and cosmetics were up 10%.

Some North Koreans are even buying real estate in Dandong. One high-rise building, where three bedroom apartments go for nearly $100,000 each, has sweeping views of a decrepit North Korean village with crumbling cinder-block houses across the border. A North Korean buyer recently purchased one of the units with cash, according to the building’s sales agent.

“Life is quite comfortable” for senior party members, military officers and traders, who have prospered despite widespread shortages of food, fuel and medicine in North Korea, says Pak Yong Ho, a former high-ranking North Korean official who defected to South Korea two years ago.

North Korea’s Communist Party has long had overseas agents in Macau, Switzerland and elsewhere dedicated to maintaining supplies of luxuries for top military and government personnel, according to former North Korean officials. Their jobs, in the wake of the U.N. sanctions, could get much harder.

The U.N. so far has let individual countries decide which high-end products to block. Washington has barred U.S. companies from selling everything from iPods to Harley-Davidson motorcycles. But that move was largely symbolic, as there is very little direct trade between the U.S. and North Korea.

Japan, which has for decades been a source of luxuries for the North Korean ruling class, has banned exports of 24 fancy products from caviar and gems to watches and art.

But the key to whether the sanctions will work is in the hands of China, North Korea’s largest trading partner.

A steel-girder bridge here spans the Yalu River, connecting Dandong to the city of Sinuiju in North Korea. That has helped Dandong, whose name means “Red East,” become a popular shopping destination for North Koreans with money. It is unclear how much that will change because of the sanctions.

So far, China hasn’t disclosed what specific kinds of high-end exports — TVs or luxury automobiles, for instance — it will block. A Chinese foreign-ministry spokeswoman, Jiang Yu, has said the list “should not be allowed to impact normal trade transactions” between the socialist neighbors.

North Korean leader Kim Jong Il, whose own taste for expensive French cognac and other imported luxuries is well known, uses money and goods liberally in an effort to buy the loyalty of the elite, according to U.S. and South Korean officials. Some of these officials say that depriving the ruling class of its creature comforts could alienate them from Mr. Kim, long known as “Dear Leader.”

But many North Korea watchers and North Korean defectors doubt that the elite would revolt against Mr. Kim’s government, because their fates are so closely tied to his now. “Under this regime, the privileged have had a very good life,” says Kim Dok Hong, the second-highest North Korean official to defect. “If the regime collapses, the people they’ve mistreated will be looking for revenge.”

At the peak of the famine that killed more than a million North Koreans in the mid-1990s, Mr. Pak, the former government official, says his parents weren’t short of food. Their home had three refrigerators regularly replenished with imported provisions by the Communist Party. Mr. Pak uses a pseudonym to protect family members still in the North from government retribution.

“The elites have had more freedom to do their own business” since economic overhauls in 2002, says Yang Chang Seok, a senior official at South Korea’s Unification Ministry, which oversees relations with the North. “People have earned a lot of money from trading.”

These days in Pyongyang, members of the ruling class are ferried around in imported cars and live in well-appointed — and well-guarded — apartment complexes. Their children race around city parks on in-line skates and play American computer games.

Says Mr. Pak: “If you can afford to pay, there’s nothing you can’t get.”

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Follies of central planning-real estate

Monday, September 18th, 2006

From the Daily NK:
9/18/2006
Kang Jae Hyok

My nephew had lived in an apartment in 1dong of new Dancheon (Tanchon). The apartment was completed in 1991 and transformed into a dumping ground in 4 or 5 years. [How] did it happen?

It was in 1983 that the apartment was completed in Younggangli. The instruction of Kim Il Sung who visited ‘Dancheon Magnesite Factory’ led to the construction of the apartment complex. Kim Il Sung ordered to build an apartment complex for workers working in ‘Dancheon Refinery’ and the factory around the Younggangli sea, and to design the apartment same as the Changgwang apartment in Pyongyang. Aftermath, an apartment construction group was formed from each province, city and district, and began to construct the apartment.

A 2,500 household apartment complex was completed in 8 years

During the construction period, N. Korean economy had been being stagnant. In addition the supplies of construction materials and equipments so often stopped that the construction was often dispensed. Some construction materials such as soil and gravel were gathered from the close places. Yet, because of proximity of railroad, construction condition was good.

However, cement, woods and ferroconcrete had been not supplied on time and thousands of workers had often wasted time. So, it had taken as many as 8 years to complete the 2,500 household apartment complexes. The number of workers for the construction was 4,500. Apartments had ranged from 5 floors to 15 floors and various designs.

Yet, nobody wanted to live in the apartment. In a desolate plain only apartments stood, there were no convenient facilities and no Jangmadangs.

It 8 km to arrive at the factory from the apartment, yet there were no shuttle buses. Head of South Hamkyung province who thought the apartment had to be filled forced workers to live in it. Powerless workers were obliged to live in it.

A 100watt light bulb and a baby in a box

The new apartment complex was named New-dancheon, and divided into two, 1 dong and 2 dong. In the first year tap water and heater were supplied, yet in the next year no heating in the apartment. The freezing whether of South Hamkyung province was the one that even stout adults stand.

In N. Korea, electricity is allowed only for light and watching TV. It can not be used for other purposes. Electricity monitors watch day and night. If a household caught in the monitor, it is not allowed to use electricity and punished by Giupso (state owned enterprise) or People’s unit.

A couple of workers working for the refinery put their baby and a 100 watt bulb in a box and warmed the baby with the bulb plugged into electricity. It was caught in a crackdown. Yet censors could not say anything about their illegal action.

Residents living in the apartments suffered from others as well. Tap water was often suspended, so that each house had to prepare a few crocks that were filled with water and used for a rainy day. As the water in crocks was empty, all family members had to carry water from the distant wells. If the apartment building was not high, residents would have suffered less.

From 1994 when food crisis began and the number of the death increased, workers working in the Dancheon refinery and Magnesite factory could not get food and some workers died of starvation. The highest number of the death was from the New-dancheon apartment complex. The survivors left the apartment and moved around for food.

The apartment complex was taken away and became like a haunted house. Only in the first floor lived some workers and in the second floor were nobody.

Here and there in the apartment dumps and garbage began to be found. Moreover, the murder incidents happened so that people began to call the apartment a ‘Ghost Apartment’. Residents living in the Ghost Apartment struggled to leave it, yet they had no money to move.

The main cause that produced the Ghost Apartment was an instruction of Kim Il Sung, ‘Build an apartment complex having a good sea view’ and without a plan construct it. The Ghost Apartment Complex definitely shows the internal situation of N. Korean society.

I wonder if by now my nephew left the ‘Ghost Apartment’.  

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“Good Friends” reports on DPRK real estate

Friday, June 16th, 2006

From the Daily NK:

‘Good Friends’, an organization for aiding North Korea, revealed on a newsletter of the 14th that, “The North Korean upper-class families usually live in the houses valued at from 27 million to 40 million won and have a bed valued at 300,000 won($100) and furniture at 800,000 won($267)”, and “some have housemaids in their houses”.

Furthermore, the upper-class families furnish with VCRs, vacuum cleaners and electronic heaters besides six home appliances (Refrigerators, sewing machines, TVs, washers, recording machines and electronic fans) that general North Koreans wish to have once in their lifetimes.

Plus, it added, “They spend 30,000 won in purchasing rice, pork, egg, Alaska pollack, various fruits and vegetables a month, and their total expenditure a month including other expenses amounts for more than one million won”.

It explained, “In the case of North Hamkyung province, their main sources of income are generally black market, drug traffics, curio dealing, wholesale carrying food and industrial products by car to Najin or Chonjin”, and “To get guaranteed, generally they closely connect with officials working at judicial authorities”.

According to the newsletter, however because most of the North Koreans maintain subsistence level, the gap between the rich and the poor are increasing.

It newsletter further explained that, “The gap between the rich and the poor varies according to areas, countries or cities”, and “This gap results from the distributional differences produced by productivities of each factory, operations, electronic situation, operational conditions of trains or cars, and demand difference of food, industrial products and necessities according to areas”.

Of the cities, Pyongyang is the most advanced city, Sariwon, Hamhung, Chongjin, Hoiryeong, Rajin, Shinuiju, Pyongsung are the second advanced cities, and the other cities are at the level of the subsistence.

In the case of North Hamkyung province, the upper middle class lives in houses valued at 1,500,000 won to 4 million won, and spend 100,000 won to 150,000 won in rice, pork, eggs, and some alcohol a month. Their main sources of income are some black markets, crossing a river, helps of relatives living in China, or business.

The low class can not even see rice, and generally lives on rice mixed with corns, corn noodles, vegetable soup. Their expenditure a month is around 30,000 won to 40,000 won.

Their main sources of income are trifling jobs such as vegetable sale, house repair or cleaning night soil. Although they want to do their own businesses, they have no money to do. Salaries are their only source to get some money, but they are not paid on time.

The lowest class of the elderly, the disable and Kotjebi(Street children) lives barely. They usually sleep in buildings, under bridges, garbage dumps, or riversides. Recently the people of the lowest class are increasing. 

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Price of Rice Rises Sharply in May

Friday, May 26th, 2006

Daily NK
Kwon Jeong Hyun
5/26/2006

In North Korea, domestic rice prices are showing a sharp rise.  In mid May, the price of rice in North Pyongan province was 1,300W ($0.43)/1kg. Compared to the price in May 2005, it rose 500W ($0.17). In Jangmadang, there is a rumor that rice will rise to 2,000 won ($0.67), so it seems that it’s just a matter of time before rice becomes more expensive.

The reason for the rising cost of rice is simple: a lack of rice. The rice stored in Autumn has begun to run out and there are not enough edible plants to go around. North Korea calls this period the Spring Austerity Season. This period is the hardest season for North Koreans.

The average wage of North Koreans is 3,000W($1). To be more exact, it means that 4 family members have to live off of 1.5kg of rice a month. Everybody struggles to survive by doing business, digging up edible plants, getting help from relatives living in China, and selling scrap iron.

The following is March prices from North Pyongan province. This shows the great difference from this year’s price. Except for food and groceries, the price does not vary much:

Groceries

Rice

1kg 800won – March 7 / 1,300 won in May

1kg 700won(730won by wholesale) – May 21~31

Corn

450 ~ 500won

Pork

1kg – 4,000won

Beef

1kg – 6,500won

Duck meat

1kg – 4,500won

Goat meat

1kg – 4,500won

Mutton

1kg – 4,000won

Egg

Per one – 150won

Edible oil

White

1kg – 2300won

Yellow(bean oil)

1kg – 2,650won

Seasoning

Ajinomoto made in Japan : 450g-2,400won(2,260won by wholesale)

Gaedan made in China : 450g 2,150won(2,050won by wholesale)

 

Clothes

Underwear

Minye, for woman, made in China – 17yuan

Bosuk, for woman, made in China – 21yuan

Gyeongpum, for man, made in china – 26yuan

Soanda, for man, made in China – 31yuan

Socks

Nanais, one pair – 1,050won

Bubu made in China, one pair – 1,250won

Shoes

Man’s hide shoes, fair average quality, made in China – 60yuan

Man’s hide shoes, lower-grade quality, made in China – 50yuan

 

Goods related with a Computer

Monitor 17″

Retail price – 110~120 dollars, Wholesale price – 90 dollars

Printer

65~70 dollars

diskette

5,000won per ten

Keyboard

20dollars

Mouse

5dollars

 

Snacks or Side dishes(March 28 ~31)

Roasted chicken

6,500won~8,000won per one

Potato

1kg – 400won

Roasted duck

9,000won~12,000won per one

Beans

1kg – 700won

Noodle

1Box – 6,750won

Flour

1kg – 750won(690won by wholesale)

Confectionery

1 box – 4,700won

Butter powder

1kg – 5,000won

Rice cake

1box – 8,000won

Chinese noodle

1kg – 2,000won

Dry squid

1kg – 8,800won

Wild walnut powder

25g – 400won

Sweet potato

1kg – 300won

Milk powder

400g – 5,000won

Korean noodle

750g – 2,400won

 

Fruits (March 28 ~ 31)

Mandarin

1kg – 1,800won

Water melon

3kg – 9,000won

Tomato

1kg – 2,000won

Strawberry

1 box – 9,000won

Banana

1 cluster – 5,500won

Pear

1kg – 1,200won

Apple

1kg – 1,200won

 

Leisure (March 28 ~ 31)

Movie

50won

Karaoke

1 hour – 5,000won

Internet cafe

1 hour – 1,000won

Admission fee for Sauna

2,500won

Pool

1 person – 70won

Film

9,000won ~ 15,000won

Mangyeongdae Playground

Adult – 50won, Child – 20won

Print of a photograph

10 ~ 18cm : 800won

A comic book

1,500won (lending – 100won)

 

Taxes and Exchange Rate (March 7 ~ 31)

Exchange Rate

100dollars

March 13

310,000won

March 18

298,000won

March 19

297,000won

March 31

299,500won

100yuan

March 19

37,100won

March 31

37,500won

The present

37,600won

Electronic fee : using for 4 light bulb, a TV, a refrigerator, a recorder(3months) – 600won

Water fee – 10won per capital(3months)

 

Medicines and Medical Instruments

Anodyne

1 pill – 75won

Sphygmomanometer, Stethoscope

25,000won

Aspirin

12 pills – 140won

1 bottle of 5% Glucose

580won

Antibiotics

1 pill 300won(Made in China-30won)

A acupuncture needles case

10won

Cold medicines

1 pill – 30~50won

 

School Things

Pencil

50won

Pencil case

500 ~ 700won

Ball pen

150 ~ 250won

Schoolbag

6,000won

Notebook

350won

Mechanical pencil

1,200won

Eraser

300won

Entrance fee for Shinuiju Medical college including bribe costs

200 ~300 dollars

Money due of private computer shop per meonth

200 ~ 300dollars

 

Housing Prices

Single story house with 2rooms, 1kitchen in a city

Monthly rent 20,000won

Middle quality apartment with 2rooms, 1kitchen

3,000 ~ 3,500dollars

Rent for a 110 square meters Karaoke

40,000won per month

High quality apartment with 3rooms, 1kitchen

70,000dollars

Single story house with 2rooms, 1kitchen

1,500dollars

Single story house with 3rooms, 1kitchen(660㎡)

3,000dollars

 

Others (March 28 ~ 31)

Sanitary napkin

500 ~ 1,000 per one

Cosmetics(Cream, Toner)

Made in S.Korea-10,000won, Made in China-35,000won

3 kinds of toner set

42,000won

Small size gas range

27,000won(25,000won by wholesale)

3 kinds of Aloe set

42000won

Auto bike

150 ~ 200dollars

TV

Sony, used, made in Japan – 680yuan

Gukhwa, used, made in China – 350yuan

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Nautilus Claims Sinuiju Project Underway

Thursday, April 27th, 2006

According to the Nautilus Institute’s web site [Link broken since posing]:

“Under the direction of central authorities, foreign currency management groups are rapidly being moved into Sinuiju, while ordinary residents are being relocated to other regions only to be replaced by residents of Pyongyang and other areas who are in the process of moving in.”

The Sinuiju Special Administrative Region (SAR) project lost momentum in September 2002 when its first governor-to-be, Chinese-born Dutch businessman Yang Bin, was arrested in China. North Korean leader Kim Jong Il’s visit to China at the beginning of this year, however, appears to have triggered a turnaround. With Kim’s China trip focused on the revision of economic policies, the rejuvenation of Sinuiju SAR development plans came into the spotlight.

Most South Korean press have run pieces, based on the stories of North Korean defectors and Chinese residents in Dandoong and other border areas, alluding to the fact that there is change in the air around Sinuiju. A North Korean businessman in Dandoong was quoted as saying, “No official word has come down from central [authorities], but they are busy preparing the Sinuiju SAR,” while rumors are spreading among area residents that “Sinuiju is the next Hong Kong.”

The most reluctant promoters are the People’s Committee and regional administrative organs. As orders come down, some administrators are required to immediately pack and relocate to southern Sinuiju, an underdeveloped area not even comparable to Sinuiju proper. Authorities had chosen the site as far back as 1986, and while development was fully promoted, only factories were built up. Housing, roads, and other indirect social capital facilities are still lacking. While regional authorities may have decided to build up southern Sinuiju, it will take another ten years of hard work to do so.

On the other hand, the outlook for city authorities is considerably brighter. This is because in the future, they will have the opportunity to rise up though organizations run by special administrative businesses. Up until now, instructions have come through the Regional People’s Committee, security bureau and defense authorities, but even though they own the facilities, they can still receive orders directly from the central government. Because of this, regional officials are still influenced by the temperament of local and central party politics while being faced with increasing pressure from city authorities to transfer power to them. While some factories — like the Sinuiju Cosmetics Factory, Sinuiju Shoe Factory, Sinuiju Synthetic Fiber Plant, and other large factories — are preparing for foreign capital support and cooperative ventures, most administrators appear to be pushing for keeping the status quo.

There are still many concerns. As the SAR is being set up, central officials are being dispatched to fill roles as factory officials; central officials without any personal interest. A similar sort of dispatch of central officials took place in the Rajin-Sonbong Special Economic Zone in the past.

Most small- and medium-sized enterprises and regional factories are beginning to transform into trading companies. There are currently around one hundred fifty such trading offices in Sinuiju. In the future, if Sinuiju is officially designated as a SAR, it appears that a great many more trade offices will appear.

Other news from Sinuiju insiders is that the People’s Committee, People’s Security Force, National Security and Defense Bureau and other central government departments that have received Kim Jong Il’s permission to trade have already opened offices in Sinuiju, employing people in the area and busily seeking out people with connections in China in order to find trading partners.

It appears by looking at the relocation currently underway that the goal is to move residents within the same timeframe that was required for the first round of relocations in 2002, when residents were moved to Chunma, Kwaksan, Dongrim and other areas around the outskirts of Sinuiju. There are problems here as well, as the government wants to relocate residents from Pyongyang and other regions to Sinuiju. At issue is the fact that while the number of residents who can move in needs to equal the number relocated out of the area, some North Koreans have already used connections with the central and regional party affiliates in order to move to the region.

In addition, the housing market is active, with housing prices in central downtown areas having already skyrocketed. While officially owned by the state, dwellings are unofficially “sold” through the use of “modification fees”: apartments run from 25 to 30 million won (8 to 10 thousand USD), while two-three story condominiums in “Chinatown” in the Namsang district run in the tens of thousands of dollars.

However, complications have arisen. Many residents being moved out have decided to get rid of their houses, but this has proved more difficult than expected. Some have put up their house for sale but have been unable to find a buyer. There are also those who were caught in the midst of sales through “real estate offices” when a crackdown by authorities resulted in their expulsion. A source stated that the administrative authority of the city security bureau in charge of relocating residents is undermanned and takes different measures to direct different groups of residents, while pressing for the expulsion of what it deems as “lesser” or unemployed people.

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I Have Some Water-Front Property that’s Perfect for You

Saturday, April 22nd, 2006

According to the Donga Ilbo, North Korea is assaying its real estate to establish its commercial value. 

Minju Chosun, published by the Cabinet of North Korea, reported on April 19 that the North Korean government is evaluating the real estate value across the country. The North’s official daily mentioned the on-going evaluation efforts in the editorial, emphasizing execution of this year’s budget set by the Supreme People`s Assembly during its fourth meeting on April 11.

“The government should actively engage in the evaluation process and contribute to generating the country’s financial resources,” the paper stressed.

Donga Ilbo reported on April 13 that North Korea is preparing for an economic reform centered on real estate reform, and that it intends to replenish national finances through real estate leases.

North Korean leader Kim Jong Il purportedly ordered real estate reform earlier this year. A source said that the cabinet decision delivered on January 19 was related to Kim’s order on January 4 to lease real estate. Kim made a secret visit on January 10 to southern parts of China, a center of the country’s open and reform policies.

The source also said that the cabinet set the price of buildings and ports based on additional construction costs whereas it decide the price of natural real estate such as mountains and streams based on their use value.

 

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How do North Korean Real Estate Markets Work?

Thursday, March 2nd, 2006

Accoding to the DailyNK:

Moving houses is apparently quite popular, so North Koreans have to “work” with state and cooperative owners.  If land, houses and real estate are registerd as state owned property, however, it is illeal for people to trade in them.  Apparently officials have no problem making transactions under the right conditions, but if the wrong person finds out, you could lose all your money.

Current prices:
City dewlings-single story, near markets (Jangmadang), W2 million (Appx: $666.67)
Cuntry home-Over 10,000W (Appx $3.50)
Central Pyongyang and Sinuiju: W20-30 million.

North Korean Land Ownersip Norms:
There are three kinds of owners in North Korea:
1. the state,
2. cooperative unions (such as cooperative farms)
3. individuals (titiles are registered to individuals for historical reasons) 

1.  State-owned houses are constructed by the City Construction Office. It used to follow a construction plan, but from the early 90’s construction stopped. After units are completed, they are transferred to the City Management Department of People’s Committee. The City Management Department then transfers some units certain organizations (at its own discretion I guess), and distributes others to ordinary people. The City Management Department oversees the ‘Housing Inspection Board’ which controls the dealings, rent, and lease of houses.

Residents can move into their houses after getting a ‘residents certificate’ from the City Management Department. Before the “Economy Management Action” launched in June 1, 2002 (price reforms), the housing purchase prices that the ‘residents certificate’ guaranteed, was a relatively low W180 to W1,000 ($0.06 – 0.33). After the Action, they increased up to W1,000 – W10,000 ($0.33 – 3.33). As the ‘residents certificate’ guarantees, the houses are registered in owners’ names, but because it does not have any ownership concept in it, the owners can not sell the houses.

But tennants still have to pay the equivalent of rent in the form of ‘Management expenses’. ‘Management expenses’ are roughly W100 including water rates, broadcasting charges, and electricity expenses.

2.  Cooperative unions do not allow people other than their own staff to live in their governing houses. No sales and rent are permitted. If a staff member stops working there, he or she leaves the property.

Staff working for the Party, Administrative Ministry, and Law Authority organizations live in specific dwellings in each district. If they are laid off, then they have to leave the houses. In case of personnel changes, they can continue to live in the former living houses. The houses in which high-ranking officials live are rarely sold because of others’ opinions.

3.  Individually owned houses in North Korea are usually located in the country, not in cities. Shortly after the regime was established, most of the individually-owned houses were confiscated under land reform. Some were allowed to reatin ownership in a small sense if they were not wealthy or if the land had been in the family for generations.  These owners are allowed to sell their homes. 

If these homes are later included on a list of ‘forced removal’ (the equivalent of eminent domain I imagine), the owners can build new houses at other sites given to them by the Ministry of Land Administration.  Although the Ministry of Land Administration gives as much land as was taken, the new land can not be sold.

Black Market Trading:
Since there has not been much housing construction in some time, spply and demand are not equilibrating.  So residents are forced to come up with coping mechanisms.

One method appears to be bartering.  Two residents that wish to swap houses go to the City Management Department.  In typical communist fashion, greasing the wheels can get an official in charge to change the names on the residence certificates.  All the official has to do is sign the paper to make it official.  The two trades can make cash paments to each other if necessary at another time. (this suggests that there might be reputable escrow agents available).  If a conflict emerges and becomes public, the CMD can confiscate both properties.

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Trading Ideals for Sustenance

Monday, July 4th, 2005

Los Angeles Times
Barbara Demick
7/4/2005

For most of her life, Kim Hui Suk had spouted the sayings of North Korea’s founder Kim Il Sung and never for a moment harbored a doubt: Capitalists were the enemy. Individualism was evil.

But then disaster rained down on her hometown, Chongjin, on North Korea’s remote east coast. Factories ran out of fuel. Food rations stopped. Watching her family slowly succumb to the famine — her mother-in-law, husband and son eventually would die of starvation — Kim realized she had to change.

Once a stickler for following the rules, she bribed a bureaucrat so she could sell her apartment. Then, with no business skills other than the ability to calculate on an abacus, she used the proceeds of the sale to set herself up in a black market business, hawking biscuits and moonshine she brewed from corn.

Kim could have been sent away for life for such crimes. But obeying the rules would have meant a death sentence.

“The simple and kind-hearted people who did what they were told — they were the first to die of starvation,” said Kim, a soft-spoken grandmother who now lives in South Korea and has adopted a new name to protect family members still in the North.

The famine that killed 2 million North Koreans in the mid-1990s and the death of the nation’s founder, Kim Il Sung, in 1994 sparked vast changes across the secretive communist country.

Markets are springing up in the shadows of abandoned factories, foreign influences are breaching the borders, inflation is soaring and corruption is rampant. A small nouveau riche class has emerged, even as a far larger group has been forced to trade away everything for food.

This is the picture of life in North Korea as painted by more than 30 people from Chongjin, the nation’s thirdlargest city. Some are defectors living in South Korea. Others were interviewed in China, which they had entered illegally to work or beg. Accounts of aid workers and videos taken illegally in Chongjin by disgruntled residents were also used to prepare this report.

Although the North Korean regime has a reputation as the ultimate Big Brother, people from Chongjin say the public pays less and less heed to what the government says. There is little that might be called political dissent, but residents describe a pervasive sense of disillusionment that remains largely unspoken.

“People are not stupid. Everybody thinks our own government is to blame for our terrible situation,” said a 39-year-old coal miner from Chongjin who was interviewed late last year during a visit to China. “We all know we think that, and we all know everybody else thinks that. We don’t need to talk about it.”

Kim Sun Bok, a 32-year-old former factory worker who came to South Korea last summer, said the country was “changing incredibly.”

“It is not the same old North Korea anymore except in name.”

Just a decade ago, when people in Chongjin needed new trousers, they had to go to government-owned stores that sold items mostly in drab browns or a dull shade of indigo. Food and other necessities were rationed. Sometimes the government permitted the sale of home-grown vegetables, but even a hairbrush was supposed to be purchased from a state-run shop.

Today, people can shop at markets all over Chongjin, the result of a burst of entrepreneurship grudgingly allowed by the authorities. Almost anything can be purchased — ice cream bars from China, pirated DVDs, cars, Bibles, computers, real estate and sex — for those who can afford the high prices.

The retail mecca is Sunam market, a wood-frame structure with a corrugated tin roof that is squeezed between two derelict factories.

The aisles brim with fresh cucumbers, tomatoes, peaches, scallions, watermelons and cabbage, as shown by rare video footage taken last year by the Osaka, Japan-based human rights group Rescue the North Korean People. Everything else comes from China: belts, shoes, umbrellas, notebooks, plates, aluminum pots, knives, shovels, toy cars, detergents, shampoos, lotions, hand creams and makeup.

Each of Chongjin’s seven administrative districts has a state-sanctioned market. Sunam, the city’s largest, is expanding, and some say it has a wider variety of goods than the main market in Pyongyang. Many vendors wear their licenses pinned to their right breasts while the obligatory Kim Il Sung buttons remain over the heart.

Although markets have been expanding for more than a decade, it was only in 2002 and ’03 that the government enacted economic reforms that lifted some of the prohibitions against them. Most of the vendors are older women such as Kim Hui Suk, a tiny 60-year-old with short, permed hair and immaculate clothing.

She was working in the day-care center of a textile factory in the early 1990s when production ground to a halt. Men were ordered to stay in their jobs, but Workers’ Party cadres at the factory started whispering that the married women, or ajumas, ought to moonlight to provide for their families.

“It was clear that the ajumas had to go out and earn money or the family would starve,” Kim said.

She first tried to raise pigs, locking them in a shed outside her downtown apartment building and feeding them slop left over from making tofu. But the electricity and water were too unreliable to keep the business going.

In 1995, Kim sold her apartment in the choice Shinam district and bought a cheaper one, hoping to use the proceeds to import rice from the countryside. But that too failed when she injured her back and couldn’t work.

The family’s situation became dire. Her husband’s employer, a provincial radio station, stopped paying salaries, and food distribution ended. In 1996, her mother-in-law died of starvation, and her husband the following year.

“First he got really, really thin and then bloated. His last words to me were, ‘Let’s get a bottle of wine, go to a restaurant and enjoy ourselves,’ ” Kim recalled. “I felt bad that I couldn’t fulfill his last wish.”

In 1998, Kim’s 26-year-old son, who had been a wrestler and gymnast, grew weak from hunger and contracted pneumonia. A shot of penicillin from the market would have cost 40 won, the same price as enough corn powder to feed herself and her three daughters for a week. She opted for the corn and watched her son succumb to the infection.

But Kim did not give up. She swapped apartments again and used the money to start another business, this time baking biscuits and neungju, a potent corn moonshine. If buyers didn’t have cash, she would accept chile powder or anything else she could use.

“We made just enough to put food on the table,” said Kim.

Much of Chongjin’s commerce is still not officially sanctioned, so it has an impromptu quality. Money changes hands over wooden carts that can be rolled away in a hurry. Those who can’t afford carts sell on tarpaulins laid out in the dirt.

Fashion boutiques are slapped together with poles and clotheslines, enlivening the monochromatic landscape with garish pinks and paisleys. Some clothes have the labels ripped out and vendors whisper that these items came from araet dongne or the “village below,” a euphemism for South Korea, whose products are illegal in the North.

Shoppers can buy 88-pound sacks of rice emblazoned with U.S. flags, and biscuits and corn noodles produced by three factories in Chongjin run by the U.N. World Food Program — all intended to be humanitarian handouts.

Some people cut hair or repair bicycles, though furtively because these jobs are supposed to be controlled by the government’s Convenience Bureau.

“They will bring a chair and mirror to the market to cut hair,” Kim said. “The police can come at any moment, arrest them and confiscate their scissors.”

Another new business is a computer salon. It looks like an Internet cafe, but because there’s no access to the Web in North Korea, it is used mostly by teenagers to play video games.

More products are available, but inflation puts them out of reach for most people. The price of rice has increased nearly eightfold since the economic reforms of 2002 to 525 won per pound; an average worker earns 2,500 won a month — about $1 at the unofficial exchange rate.

World Food Program officials in North Korea say the vast majority of the population is less well off since the economic changes, especially factory workers, civil servants, retirees and anybody else on a fixed income. But there are those who have gotten rich. Poor Chongjin residents disparage them as donbulrae, or money insects.

“There are people who started trading early and figured out the ropes,” said a 64-year-old retired math teacher who sells rabbits at the market. “But those of us who were loyal and believed in the state, we are the ones who are suffering.”

If Chongjin’s economic center is Sunam market, its political heart is Pohang Square, a vast plaza dominated by a 25-foot bronze statue of Kim Il Sung.

The grass here is neatly mowed, the shrubbery pruned and the pavement in good repair. Even when the rest of the city is without electricity, the statue is bathed in light. Across the street, a tidy pink building houses a permanent exhibit of the national flower, a hybrid begonia called Kimjongilia, named for current leader Kim Jong Il.

Since the practice of religion is barred, Pohang Square stands in as a spiritual center. Newlyweds in their best clothes pose for pictures, bowing to the statue so that their union is symbolically blessed.

When Kim Il Sung died on July 8, 1994, half a million people came to Pohang Square to pay their respects in the pouring rain and stifling heat. But among the adoring multitudes, there were malcontents.

One was Ok Hui, the eldest daughter of entrepreneur Kim Hui Suk. Though she dutifully took her place in the throng, any sadness she felt came from a foreboding that Kim Jong Il would be worse than his father.

“I went day and night along with everybody else. You had to…. But there were no tears coming from my eyes,” recalled Ok Hui, now 39, who did not want her family name published.

Ok Hui worked for a construction company’s propaganda unit, a job that entailed riding around in a truck with a megaphone, exhorting workers to do their best for the fatherland. But she didn’t believe what she preached.

Her father had taught her to doubt the regime. As a reporter and member of the Workers’ Party, he knew more about the outside world than many people and realized how far North Korea lagged behind South Korea and China.

“He and his friends would stay up at night when my mother was out, talking about what a thief Kim Jong Il was,” Ok Hui said.

Her mother, though, remained a firm believer. “I lived only for the marshal. I never had a thought otherwise,” said Kim Hui Suk. “Even when my husband and son died, I thought it was my fault.”

Ok Hui and her mother frequently clashed. “Why did you give birth to me in this horrible country?” Ok Hui remembers taunting her mother.

“Shut up! You’re a traitor to your country!” Kim retorted.

“Whom do you love more? Kim Jong Il or me?” her daughter shot back.

The regime was probably less beloved in Chongjin than elsewhere in North Korea. Food had run out in its province, North Hamgyong, earlier than in other areas, and starvation rates were among the highest in the nation.

Chongjin’s people are reputed to be the most independent-minded in North Korea. One famous report of unrest centers on the city. In 1995, senior officers from the 6th army corps in Chongjin were executed for disloyalty and the entire unit, estimated at 40,000 men, was disbanded. It is still unclear whether the incident was an attempted uprising or a corruption case.

Chongjin is known for its vicious gang wars, and it was sometimes difficult to distinguish political unrest from ordinary crime. There were increasing incidents of theft and insubordination. At factories, desperate workers dismantled machinery or stripped away copper wiring to sell for food.

Public executions by firing squad were held outside Sunam market and on the lawn of the youth park, once a popular lover’s lane.

In a village called Ihyon-ri on the outskirts of Chongjin, a gang suspected of anti-government activities killed a national security agent who had tried to infiltrate the group, former kindergarten teacher Seo Kyong Hui said.

“This guy was from my village. He had been sent to inform on a group that was engaged in suspicious activities,” she said. “They caught him and stoned him to death.”

Work crews went out early in the morning to wash away any anti-regime graffiti painted overnight, according to human rights groups, but most people were too scared to express their discontent. Badmouthing the leadership is still considered blasphemy.

To discourage anti-regime activity, North Korea punishes “political crimes” by banishing entire families to remote areas or labor camps.

“If you have one life to live, you would gladly give it to overthrow this government,” said Seo, the teacher. “But you are not the only one getting punished. Your family will go through hell.”

Even as Kim Jong Il’s regime weakens, many of its stalwarts are growing richer. Many of Chongjin’s well-to-do are members of the Workers’ Party or are connected to the military or security services. In the new economy, they use their ties to power to trade with China, obtain market licenses, extract bribes and sell bureaucratic favors.

“Those who have power in North Korea always figure out ways to make money,” said Joo Sung Ha, 31, who grew up in Chongjin and now works as a journalist in Seoul.

Joo was the pampered only son of a prominent official, and his family lived in Shinam, in the city’s northern hills overlooking the ocean. By the standards of South Korea or China, the single-family homes with lines of fish and squid drying from the roofs are nothing special. But for North Koreans, these are mansions.

The Joo family had a 2,000-square-foot cement-block house and a walled garden about twice that large. The garden proved crucial in protecting the family against the famine, though they had to contend with hungry soldiers who would scale the walls and steal potatoes and cabbages.

North Korean families like to measure their status by the number of wardrobes they own, and Joo’s family had five — plus a television, a refrigerator, a tape recorder, a sewing machine, an electric fan and a camera. They didn’t have a phone or a car — at that time those were unthinkable even for a well-off family — but they did have a bicycle.

“The appliances were of no use after the electricity ran out,” Joo said. “The bicycle was the most important thing, because the buses and trams stopped running.”

Joo attended the best elementary school in Chongjin, the city’s foreign language institute, and eventually the country’s top school, Kim Il Sung University in Pyongyang. He never met a native English speaker in the North, or any foreigner for that matter, but he trained his ear with videotapes of the BBC and banned Hollywood films.

“I sometimes watched ‘Gone With the Wind’ twice a day. Anybody else would have been arrested for watching Hollywood movies,” he recalled.

Joo’s glimpses of Western culture eroded his loyalty to the system. “I saw myself 20 years down the road in the prime of my career and North Korea would be collapsing,” he said.

While many of his classmates went to work for the regime’s propaganda news service after graduating, Joo arranged to return to Chongjin, where he taught high school until he escaped in 2001.

“The people from our neighborhood couldn’t understand,” said Joo, who stays in contact with his family. “They thought I had everything.”

Kim Hye Young, an actress, was also a child of privilege. Her father, Kim Du Seon, was an official of a trading company that sold mushrooms and fish in China. He learned how to navigate the bureaucracy, using his connections with the army and security services.

“If one of [the officials] had a wedding in the family, they would come to me for a couple of cases of wine,” the older Kim said.

As trade with China became more important, the family prospered. They took drives in a company car and ate at Chongjin’s nicest restaurant.

Growing up, Kim showed a flair for theater, and through her acting became a member of the elite in her own right. Her best-known role was in a play called “The Strong and the Righteous,” in which she portrayed a spy who sacrifices her life for North Korea.

When the production won first place in a Pyongyang drama festival in 1996, she got to meet Kim Jong Il. Still breathless with the memory, she said the leader shook her hand and gave her a fountain pen.

“I knew that I, as an actress, had an important role to promote the ideology of my country,” Kim said.

Kim and her sisters were largely oblivious to the famine, and their mother said she took pains to shelter them.

“My daughters don’t know to this day how many children in our neighborhood starved to death,” said her mother, Choe Geum Lan. She also didn’t tell them that their father, as a result of his business trips to China, had become increasingly pessimistic about North Korea’s future.

In 1998, when Kim was home from Pyongyang on vacation, her parents told her the family was going to visit an aunt in Musan, a city near the Chinese border. It was not until they had crossed to the other side that Kim and her teenage sisters, were told they had defected.

Kim, now 29 and advertising toothpaste on South Korean television, is one of the few defectors who says she didn’t want to leave.

“I was content with my life,” she said.

Today, North Korea’s elites are even better off, buying telephones for their homes and even cars.

“For $4,000 or $5,000, anybody can buy a car now. It used to be that you weren’t allowed to register your own car. We couldn’t dream of it,” said Kim Yong Il, a defector from Chongjin who lives in Seoul.

Recently, he arranged to have a computer smuggled from China to his relatives in Chongjin. North Korea’s state-run companies don’t have computers, so they’re eager to hire people who do. “If you have a computer, you can get a job,” he said.

Visitors have been shocked to glimpse the new conspicuous consumption in Chongjin.

Jeung Young Tai, a South Korean academic who was in Chongjin delivering South Korean government aid, noticed a paunchy man standing in front of the Chonmasan Hotel next to a new Lexus.

And at a hot spring in Kyongsong, on the city’s outskirts, he saw a woman carrying a lap dog — a striking sight in a country where there is so little food that the only pets usually are goldfish.

“You get the sense that there is a tremendous gap between rich and poor and that the gap is growing,” Jeung said.

The flip side, of course, is that the poor are getting poorer.

In Chongjin, those at the very bottom of the heap can be found at the train station.

The cavernous building boasts a large portrait of Kim Il Sung above the entrance and a granite-faced clock that rarely tells the right time. In front is a vast plaza crammed with people waiting for trains — sometimes for days, because the trains have no fixed schedules — and people waiting for nothing at all.

These are the homeless, many of them children. They’re called kotchebi, or swallows, because they wander the streets and sometimes between towns in search of food. Many gravitate to Chongjin station, because it is a major hub and the travelers have more to give.

A video shot last year by a military official and sold to Japan’s NTV television captured barefoot children near the station in torn, filthy clothing fighting over a nearly empty jar of kimchi. One boy scooted along the pavement on his buttocks; the narrator said his toes had been eaten away by frostbite.

Kim Hyok knows how easy it is for a child to end up at the station; he spent the better part of two years living there.

“If you can’t find somebody or they left their home, chances are you can find them at the station,” said Kim, now 23 and resettled in South Korea.

Kim’s mother died when he was a toddler, and he was raised by his father, a party member and an employee of a military unit that sold fish in China. During his early childhood, Kim, his father and elder brother lived in relative comfort in a high-rise apartment in the Sunam district.

When the government stopped handing out rations in 1993, Kim’s father used his connections to place his sons in an orphanage 60 miles away.

Kim, who was about 12 at the time, wasn’t sorry to be sent away. It was considered a privilege because the orphanages had food.

In 1997, just before his 16th birthday, Kim “graduated” from the orphanage. He caught a train back to Chongjin, but when he got to his neighborhood, things looked unfamiliar. The electricity was off. Many apartment buildings had no glass in the windows and appeared vacant.

Climbing the eight flights in pitch dark to his family’s unit, he heard a baby crying and wondered whose it might be. Confused and scared, he knocked on the door.

A young couple opened the door and told him his father had moved long ago but left a message: Look for him at the train station.

The phenomenon of vagrancy is testament to how much North Korea has changed. Before the famine, the government controlled people’s movements so strictly that they could not dream of visiting a relative in a nearby town without a travel permit, let alone selling their homes. Not showing up for work could bring a visit from police.

But as people embarked on increasingly desperate hunts for food, families broke apart. With few telephones and a barely functional postal service, parents and children became separated.

“People just started wandering around because they were hungry,” Kim said. “They would sell their apartments for a few bags of rice.”

Kim never found his father. He also never found his brother, who had left the orphanage a year earlier.

With no place to go, Kim ended up at the train station. By night, he slept squeezed into a narrow space designed for a sliding iron gate. By day, he loitered near the food vendors on the plaza. He often worked with a gang of other kids — a few would topple a vendor’s cart and the others would scoop up whatever spilled.

“If you’re not fast, you can’t eat,” said Kim, who even today in South Korea bears the signs of chronic malnutrition, with a head that looks oversized on a shockingly short frame.

Kim began hopping the slow-moving trains that pass through Chongjin on their way to the Chinese border. Once on board, Kim would scramble up to the top of a car, flatten himself to avoid the electric lines above and, using his pack as a pillow, ride for hours.

At the border, he would wade across the river to hawk the items in his pack: household goods on consignment from Chongjin residents, who were selling off their possessions.

In 1998, Kim was arrested by Chinese authorities, who do not recognize North Koreans as refugees. He was sent back to North Korea and spent two years in a prison camp before escaping again in 2000 to China, where he was eventually taken in by missionaries and brought to South Korea.

For every homeless person who survived, many more likely died. Kim Hui Suk recalled a particularly ghoulish scene at the train station.

“Once I saw them loading three bodies into a cart,” Kim said. “One guy, a man in his 40s, was still conscious. His eyes were sort of blinking, but they still were taking him away.”

Although the ranks of the homeless have thinned since the height of the famine, North Korean residents say their numbers are still considerable.

“If somebody disappears, you don’t know whether he dropped dead on the road or went to China,” the coal miner said.

About 100,000 North Koreans have escaped to China in the last 10 years. Many have ended up returning to North Korea, either because they were deported or because they missed their families. They often bring back money, goods to trade and strange new ideas.

Smugglers carry chests that can hold up to 1,000 pirated DVDs. South Korean soap operas, movies about the Korean War and Hollywood action films are among the most popular. Even pornography is making its way in.

This is a radical change for a country so prudish that until recently women were not permitted to ride bicycles because it was thought too provocative. Seo Kyong Hui, the kindergarten teacher, said that when she left North Korea in 1998, “I was 26 years old, and I still didn’t know how a baby was conceived.”

Even today, women are prohibited from wearing short skirts or sleeveless shirts, and both sexes are forbidden to wear blue jeans. Infractions bring rebukes from the public standards police.

But it is a losing battle to maintain what used to be a hermetic seal around the country. Just a few years ago, ordinary North Koreans could make telephone calls only from post offices. Dialing abroad was virtually impossible. Now some people carry Chinese cellphones and pay for rides to the border to pick up a signal and call overseas.

Smugglers also bring in cheap Chinese radios. Unlike North Korean radios, which are preset to government channels, the Chinese models can be tuned to anything, even South Korean programs or the Korean-language broadcasts of Radio Free Asia.

In the past, being caught with such contraband would land a person in political prison. Nowadays, security personnel will more likely confiscate the illicit item for personal use.

When a policeman caught Ok Hui, the entrepreneur’s daughter, with a Chinese radio in 2001, the first question he asked was, “So how do you work this thing?”

She wrote down the frequencies for South Korean radio stations.

“Don’t you have earphones so you can listen without anybody hearing you?” the officer then demanded.

North Korea instructs its citizens that the country is a socialist paradise, but the government knows outside influences can puncture its carefully crafted illusions.

“Bourgeois anti-communist ideology is paralyzing the people’s sound mind-set,” warns a Workers’ Party document dated April 2005. “If we allow ourselves to be affected by these novel ideas, our absolute idolization for the marshal [Kim Il Sung] will disappear.”

Among those who make it to China, many describe a moment of epiphany when they find out just how bad off North Koreans are.

Kim Ji Eun, a doctor from Chongjin, remembers wading across the partially frozen Tumen River in March 1999, staggering to a Chinese farmhouse and seeing a dish of white rice and meat set out in a courtyard.

“I couldn’t figure it out at first. I thought maybe it was for refrigeration,” recalled Kim, who now lives in South Korea. “Then I realized that dogs in China live better than even party members in North Korea.”

Many Chongjin residents who are caught trying to flee the country end up back in the city, behind the barbed wire of Nongpo Detention Center.

It sits near the railroad tracks in a swampy waterfront area. Prisoners are assigned back-breaking jobs in the nearby rice paddies or brick factory, where the workday begins at 5 a.m.

Ok Hui was one of those who served time in Nongpo. A rebel by nature, she had become fed up with North Korea and a difficult marriage.

In September 2001, during one of several failed attempts to escape, she was arrested in Musan and brought back to Chongjin by train. Guards tied the female prisoners to one another by tightly winding shoelaces around their thumbs.

In Nongpo, the inmates bunked in rows of 10, squeezed so tightly together that they had to sleep on their sides. Newcomers sometimes had to bed down in the corridor near overflowing toilets. Meals consisted of a thin, salty soup, sometimes supplemented by a few kernels of raw corn or a chunk of uncooked potato.

“The walls were very high and surrounded by wire,” Ok Hui said. “One woman tried to climb the wall. They beat her almost to death. You can’t imagine. They made us stand and watch.”

One day, when she was assigned to work in the fields, she spotted an old woman. She took off her underwear and offered it to the woman in exchange for sending a message to her mother. Underwear is scarce in North Korea, so the woman accepted and agreed to send a telegram to Ok Hui’s mother.

With her market earnings, Kim Hui Suk bought 10 packs of cigarettes for a security official to arrange her daughter’s release.

Some days later, the prison administrator came to talk to Ok Hui and other female prisoners who were picking corn. They were all due to be freed shortly, and the administrator urged them to resist the temptations of capitalism and imperialism, and to devote themselves to North Korea.

Then, he asked for a show of hands: Who would promise not to run away again to China?

Not a single woman raised her arm.

“We were all just thinking that our whole lives we had been told lies,” Ok Hui recalled. “Our whole lives, in fact, were lies. We just felt this immense rage toward the system.”

The prison administrator looked at the women squatting sullenly in silence in the cornfield.

“Well,” he said, “if you go again to China, next time don’t get caught.”

Forty days after her release, Ok Hui escaped again to China and made her way to South Korea. She used $8,000 in resettlement money from South Korea’s government to pay a broker to smuggle her mother out of North Korea. Today Ok Hui works in a funeral home and her mother as a housekeeper.

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Through a glass, darkly

Thursday, March 11th, 2004

The Economist
3/11/2004

So far as a visitor can tell in this secretive land, North Korea’s economic reforms are starting to bite. But real progress will require better relations with the outside

COMMUNIST North Korea has started to experiment with economic reform, and opened its door a crack to the outside world. Though its culture of secrecy and suspicion stubbornly persists, it was deemed acceptable for your correspondent to visit Pyongyang’s Tongil market last week. Here, stalls are bursting with plump vegetables and groaning with stacks of fresh meat. You can even buy imported pineapples and bananas from enthusiastic private traders.

But how about a photograph? Most foreigners think of North Korea as a famished nation, and the authorities are evidently keen these days to tell the world about the great strides their economy has made since reforms were introduced in July 2002. Logic might seem to suggest that a snap showing the palpable result of the reforms would be acceptable too. But it is not. The officials were friendly but firm: no pictures of fat carrots.

The July 2002 reforms were ground-breaking for North Korea: the first real step away from central planning since the dawn of communism there in 1945. The government announced that subsidies to state-owned enterprises were to be withdrawn, workers would be paid according to how much they produced, farmers’ markets, hitherto tolerated, would become legal and state enterprises would be allowed to sell manufactured products in markets. Most of these enterprises, unless they produced “strategic items”, were to get real autonomy from state control.

Almost two years on, how to assess the success or failure of these reforms? That climate of secrecy makes it deeply frustrating. Even the simplest of statistics is unavailable. Li Gi Song, a senior economist at Pyongyang’s Academy of Sciences, says he does not know the rate of inflation. Or maybe he is not telling. After all, he says, “We can’t publish all the figures because we don’t want to appear bare before the United States. If we are bare then they will attack us, like Afghanistan or Iraq.” So what follows can be little more than a series of impressions.

The indications are that the reforms are having a big impact. For a start, North Korea has recently acquired its first advertisement (pictured above)—for foreign cars, assembled locally by a South Korean majority-owned company. Or, to be more basic, take the price of rice, North Korea’s staple. Before the reforms, the state bought rice from state farms and co-operatives at 82 chon per kilo (100 chon make one won, worth less than a cent at the official exchange rate). It then resold it to the public through the country’s rationing system at eight chon. Now, explains Mr Li, the state buys at 42 won and resells at 46 won.

North Korea’s rationing system is called the Public Distribution System (PDS). Every month people are entitled to buy a certain amount of rice or other available staples at the protected price. Thus most North Koreans get 300g (9oz) of rice a day, at 46 won a kilo. According to the UN’s World Food Programme (WFP), that is not nearly enough. Anything extra has to be bought in the market.

In theory, even in the market the price of staples is limited. Last week, the maximum permitted rice price was marked on a board at the entrance to Tongil as 240 won per kilo. In fact, it was selling for 250. WFP officials say that in January it was selling for 145 won, which points to significant inflation, for rice at least. This is not necessarily a bad thing, since it means that the price is coming into line with the market.

The won’s international value is also adjusting. Since December 2002, the euro has been North Korea’s official currency for all foreign transactions. In North Korean banks, one euro buys 171 won. In fact, this rate is purely nominal. A semi-official rate now exists and the price of imports in shops is calculated using this.

Last October, according to foreign diplomats, a euro bought 1,030 won at the semi-official rate. Last week it was 1,400. A black market also exists, in which the euro is reported to be fetching 1,600 won—which implies that the won is approaching its market level. It also means, however, that imported goods have seen a big price-hike. For domestically-produced goods, like rice, prices may well go on rising for a good while longer.

What about earnings? Before the 2002 reforms, most salaries lay in the range of 150-200 won per month. Rent and utilities, though, were virtually free, as were (and are) education and health care. Food, via the PDS, was virtually given away. Now, pay is supposed to be linked to output, though becoming more productive is not easy for desk-bound civil servants or workers in factories that have no power, raw materials or markets.

Rents and utilities have gone up, though not by crippling amounts. A two-bedroom flat in Pyongyang including electricity, water and heat costs just 150 won a month—that is, about a tenth of a euro.

Earnings have gone up much more: a waitress in a Pyongyang restaurant earns about 2,200 won a month. A mid-ranking government official earns 2,700. A worker at a state farm earns in the region of 1,700, a kindergarten teacher the same, and a pensioner gets between 700 and 1,500. A seamstress in a successful factory with export contracts can earn as much as 5,000 won a month. Since that seamstress’s pay equates to barely three euros a month, wages still have a long way to adjust.

The prices of food and other necessities, to say nothing of luxuries, has gone up much more than rent has. According to the WFP, some 70% of the households it has interviewed are dependent on their 300 gram PDS ration, and the WFP itself is targeting 6.5m vulnerable people out of a total population of some 23m. Not all suffer equally: civil servants in Pyongyang get double food rations from the PDS.

There are some encouraging stories. In Pukchang, a small industrial town 70km (40 miles) north-east of Pyongyang, Concern, an Irish aid group, has been replacing ancient, leaking and broken-down water pipes and pumps, and modernising the purification system. This has pushed the amount of clean water available per person per day from 80 to 300 litres. Kim Chae Sun is a manager at the filtration plant, which is now more efficient. Before July 2002 she earned 80 won a month. Afterwards she earned 3,000 won. Now she earns 3,500.

As Mrs Kim speaks, three giant chimneys belch smoke from the power station that dominates the town. All workers have been told they can earn more if they work harder, but certain groups have been told they will get even more money than everyone else. In energy-starved North Korea these include miners and power workers. Mrs Kim says her husband, who works in the power plant, earns an average of 12,000 won a month. Her rent has gone up from eight to 102 won a month, and in a year, she thinks, she will be able to buy a television or a fridge.

A lot of people, in fact, are buying televisions. The women who sell the sets from crowded Tongil market-stalls get them from trading companies which they pay after making a sale. The company price for an average set is 72,000 won, the profit just 1,000 won. After they have paid for their pitch, the traders can expect an income of 10,000-12,000 won a month.

Mystery sales
Which makes for a puzzle. Who can afford a good month’s salary for a locally made jacket in Tongil, costing 4,500 won? How come so many people are buying televisions, which cost more than two years of a civil-servant’s pay? How come the number of cars on the streets of the capital has shot up in the past year? Pyongyang still has vastly less traffic than any other capital city on earth, but there are far more cars around than a year ago. Restaurants, of which there are many, serve good food—but a meal costs the equivalent of at least a white-collar worker’s monthly salary. Many of these restaurants are packed.

Foreign money is part of it. Diplomats and aid workers say many new enterprises seem to have opened over the last year. Nominally they are state-owned, but sometimes they have a foreign partner, often an ethnic Korean from Japan. The majority are in the import-export business. Some have invested in restaurants and hotels and some in light industry. Thanks to the 2002 reforms, these firms have a degree of autonomy they could not have dreamed of before. An unknown number of people also receive money from family abroad, but there are still no North Korean-owned private companies.

Farmers are among the other winners: they can sell any surpluses on the open market. But two out of three North Koreans live in towns and cities, and only 18% of the country is suitable for agriculture. The losers include civil servants, especially those outside Pyongyang who do not get double food rations and have no way to increase their productivity.

Factory workers have it the hardest. A large proportion of industry is obsolete. Though Pyongyang has electricity most of the day, much of the rest of the country does not. Despite wild talk of a high-tech revolution, the country is not connected to the internet, though some high-ups do have access to e-mail service. In the east of the country lies a vast rustbelt of collapsing manufacturing plants.

Huge but unknown numbers of workers have been moved into farming, even though every scrap of available land is already being cultivated. The extra workers are needed because there is virtually no power for threshing and harvesting and no diesel for farm vehicles. This requires more work to be done by hand. Ox-carts are a common sight.

The innocent suffer
Markets are everywhere. But this does not mean that there is enough food everywhere. In Pyongyang, where there are better-off people to pay for it, there is an ever-increasing supply. Outside the capital, shortages are widespread.

No one knows how many died during the famine years of 1995-99; estimates range from 200,000 to 3m. In Pukchang, officials say that 5% of children are still weak and malnourished. In Hoichang, east of Pyongyang, schools and institutions tell the WFP that about 10% of children are malnourished. Masood Hyder, the senior UN official in North Korea, says that vulnerable households now spend up to 80% of their income on food.

And yet some things are improving. Two surveys carried out in 1998 and 2002 by the North Korean government together with the WFP and Unicef showed a dramatic improvement in children’s health between those years. The proportion of children who fail to reach their proper height because of malnutrition fell from 62% to 39%, and the figures are thought to be still better now. However, Unicef says that though children may no longer die of hunger, they are still dying from diarrhoea and respiratory diseases—which are often a side-effect of malnutrition.

To a westerner’s eye, a class of 11-year-olds in Hoichang is a shocking sight. At first, your correspondent thought they were seven; the worst-affected look to be only five. Ri Gwan Sun, their teacher, says that apart from being stunted some of them still suffer from the long-term effects of malnutrition. They struggle to keep up in sports and are prone to flu and pneumonia. They are also slower learners.

Pierrette Vu Thi of Unicef says that North Korea’s poor international image makes it hard for her agency, the WFP and others to raise all the money they need. The country is in a chronic state of emergency, she says, and to get it back on its feet it would need a reconstruction effort on the scale of Afghanistan and Iraq.

Such bleak talk is echoed by Eigil Sorensen of the World Health Organisation. He says that health services are extremely limited outside the capital. Medicines and equipment are in short supply, large numbers of hospitals no longer have running water or heating and the country has no capacity to handle a major health crisis.

None of this is likely to change very fast. With no end yet to the nuclear stand-off between North Korea and the United States, American and Japanese sanctions will remain in place. And nukes are only part of it. Last week the American State Department said it was likely that North Korea produced and sold heroin and other narcotics abroad as a matter of state policy. North Koreans who have fled claim that up to 200,000 compatriots are in labour camps. North Korea denies it all.

Reform, such as it is, has plainly made life easier for many. But rescuing the North would take large amounts of foreign money, as well as measures more far-reaching than have yet been attempted. At present, there is no way for the government to get what it needs from international financial institutions like the World Bank. Such aid as comes will be strictly humanitarian, and investment in so opaque a country will never be more than tentative. Domestic reform on its own cannot fix an economy wrecked by decades of mismanagement and the collapse of communism almost everywhere else.

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