It is now clear that marketization is making real inroads in North Korea. As a result, there is growing international interest in the market economic structure of one of the world’s most opaque dictatorships.
Reports of brokers taking 30% commission on informal remittances, not to mention rampant bribery between traders and government officials, paint a dark picture of the system. For the individuals involved in this underworld of economic freedom, it takes a mixture of courage, intelligence and luck to survive.
For example, in September 1995, the current Secretary-General of the Committee for the Democratization of North Korea, Seo Jae Pyoung, was a college graduate in South Hamkyung Province. He was an educated young man, but the food crisis and economic collapse meant that he had no opportunities for gainful employment.
“Some friends had gone to the military and others had already started businesses so they were settled down, but I was just coming back and didn’t have my parents,” Seo explains. “I ought to have been getting rice from the public distribution center, but whenever I went there it was empty. A monthly wage was 120 won, and a kilogram of rice cost 50 won. My future was looking pretty bleak.”
Seo’s slice of luck came from his deceased father: a bicycle. He used it to carry fish from fishermen in Kimchaek to the market in Tanchon, a town about 40 kilometers away. “With only that bike I ran the business for about 3 years,” he recalls.
This wasn’t Seo’s only business interest. He was a middleman in the gold trade, too, buying it from mines in the region and re-selling it for a higher price on the open market. The buyers, mostly Chinese, would then buy the gold and re-sell it to other foreign buyers. “In Tanchon people could even find gold in the refuse, since people discarded most of the low-grade ore,” he recalls. “After they found gold, hundreds of people rushed there. Everyone wanted gold. I went, too.”
Shim Joo Il, a former North Korean military officer, and now a pastor in South Korea, pointed out that at one point North Korean civilians could be executed for selling gold. But during that time of crisis, Seo said, “Whole neighborhoods were starving to death, so no one could say anything about people digging for gold.” Of course, the entrepreneurial miners worked at their own risk and death was common: “People were climbing up the refuse piles with no safety equipment,” he says. “At one point a pile collapsed and something like ten people died.”
The gold was meant to be refined carefully. Ideally, Seo explains, using his hands to illustrate, “People would bring the gold, and then they’d put it into cloth and squeeze the water out of it. Then you’d get some gold mixed with mercury… Then you’d burn the mercury off, and you’d get yellow gold, that’s about 70% gold at best. Then you melt that, and you get chunks of gold which are about 98%. They are the kind that you can sink your teeth into.” He puts an imaginary block of gold to his mouth and bites it.
Others were not so thorough, though. They mixed low-grade ores together and covered them with gold flakes on the outside. That meant trouble. “Those guys put mixed ores into the gold, so when you cracked the gold you’d get a big lump of trash in the middle and some gold flakes,” he says. “So people started rejecting the product, saying it was fake.”
Of course thievery was prevalent, too. Seo recalls, “I was carrying about 100g of gold when these officers grabbed me. They split the gold among themselves, saying, ‘This is just between us.’ When they let me go they said ‘Look after yourself.’ Basically, you make a friend by giving them what they want.”
Seo laments the amount of money he lost through theft. “Aside from my parents’ death, the main thing that made me sad was when I got my goods stolen,” he says. Nonetheless, he is lucky to have gotten out alive. Plenty of people did not. Whether for transporting gold, or for travelling without a permit, he saved himself through bribery. It is something that remains common to this day, and shows few signs of changing.
