It has been confirmed that affluent local wholesale traders have been co-opted to support the construction of apartment buildings in Chongjin, North Hamkyung Province.
A Chongjin source told Daily NK yesterday, “The construction of high-rise apartment buildings in the Pohang district of the city is being done by enterprises and ‘shock troops’, but there are also local go-betweens at the forefront connecting affluent traders from the region with the construction teams so that the latter can get materials as needed.”
The source went on, “It seems that most of the province’s rich people have gathered here. You can tell that there are people with genuine power involved in the construction by how fast the buildings are going up now.”
Since last May, Chongjin has been working to follow in the footsteps of the Mansudae area of Pyongyang by constructing apartments for 10,000 households, including 2,000 in the Pohang district. The project is said to be part of North Hamkyung Province Party Secretary Oh Soo Yong’s determined effort to show loyalty to the regime of Kim Jong Eun. However, the Party and state lacks the power to follow through on the plans.
The situation is not rare. Rich people and brokers acting as go-betweens are actively involved in all types of construction projects in North Korea today. This was even the case when Pyongyang planned the building of 100,000 apartments in time for the 100th anniversary of the birth of Kim Il Sung earlier this year. Indeed, all North Koreans know that “without the go-betweens this country’s economy would seize up.”
Usually, the North Korean authorities get factory enterprises and units of ‘shock troops’ to do the state’s construction and set in place plans to secure the necessary cement, steel and other materials, but this part very rarely goes according to plan.
For one thing, factories need to be bribed if the construction sites want to get their materials delivered on time, so the middlemen have a close relationship with the factories. Meanwhile, the rich people who finance the construction later receive a share of the finished apartments in return.
Currently in Chongjin, a home on the 3rd or 4th floor of such an apartment costs about $5,000. A rich man investing $7,000 dollars in the construction of a building can expect to make about $3,000 in profit. Other floors cost $3,000-$4,000 at current rates. However, in Pyongyang prices are much higher, with apartments on the 3rd or 4th floor trading for as much as $10,000 dollars.
The source said, “There are nicely dressed men striding around the construction site checking on progress, and these are the rich folk.”