This is “NK Market Trends,” bringing you
weekly updates on the North Korean economy. It’s April, and spring is in the
air. We have reporter Seol Song Ah joining us for the show again. So what do
you have for us this week?
Expanding on our topic from last week, I’d
like to talk more about the labor market within North Korea. That exact term
itself doesn’t yet exist in the North, but there are expressions that refer to
it, such as ‘daily worker hire,’ or people asking others to ‘find me a worker’.
Other sayings like ‘as long as you have some strength, you can make a living,’
also describe the nature of the labor market as well. Since the North doesn’t
recognize the market economy as an institutionalized practice, more specific
terms like supply, demand, and inflation are not commonly used, but the
environment needed for the labor market to exist, in other words, conditions
where labor can be hired whenever needed, is pretty much available throughout
the country.
As I was explaining last week, the reason
why working for individuals is a lot more attractive is because laborers get
paid immediately. If the manufacturing industry could be considered a more
passive form of hiring, the real estate sector has a broader reach.
Even from that one particular phrase: ‘as
long as you have some strength, you can make a living,’ I can picture a budding
labor market in the North. Why is it that day workers are frequently hired
within the housing market?
In market terminology, people who build
homes and make money from it are called real estate developers, and in the
North, they’re known as ‘home vendors’ or ‘people who make money from
apartments’. Just because you’re a real estate developer, it doesn’t
necessarily mean that a lot of money is involved. Some people are tearing down
their own homes, rebuilding them, and then selling them for profit. Others are
donjuLiterally "masters of money," donju refers to people who hav... More [newly affluent middle class] who receive permission from state agencies
to build an entire apartment building to rake in large profits as a lump sum.
What they have in common is the fact that
they do this with the goal of making a profit on the money they’ve invested.
The average person who is building a single home hires two to three
day-workers, while donjuLiterally "masters of money," donju refers to people who hav... More hire groups from state-run factories to speed up the
construction. What’s also interesting is the fact that the speed of
construction is different depending on how workers are paid. Most pay them by
the day or month, but some pay them as a one-off payment.
This method is used not only by donjuLiterally "masters of money," donju refers to people who hav... More but
by those building single units as well. They first designate one of their early
hires (who is known to be trustworthy) as their site manager and entrust them
with the entire payment for the workers. So that person basically oversees the
entire project. For the workers, they want to wrap things up quickly and move
on to the next construction project, so the manager and workers all work
together around the clock to get things done.
Kim Jong Un may be mobilizing people right
now for the ‘70-Day Battle’, but the output compared to these private
home-building projects is unimpressive to say the least.
It’s interesting to know that real estate
projects led by individuals are much more efficient than the ‘70-Day Battle’
initiatives directly ordered by Kim Jong Un.
That’s right. It’s spring now, so it’s high
time for home building, right? As long as you take part in an aspect of home
building, you can make a living. That’s why people don’t welcome mobilization
efforts like the ‘70-Day Battle.’ There are also a lot of areas that are tied
in with the construction market like construction sand and cement, and other
fields that require labor. These days, because people are busy with
construction, they say that if you can land a job in the sand market, you can
make just as much money as you would if you had a stall at a general market.
When you say sand market, does that mean
the trade of sand? What kind of work is there, and how are people hired?
Well, if you look at high-rise apartments
in Pyongyang and Sinuiju in North Pyongan Province, the construction materials
are not provided by the state. The steel and material for interior decoration
is imported from China, and the sand and cement is produced and distributed by
individuals within the market. In the case of sand, it’s sourced from riverbeds
and involves a massive pool of labor. If you look at the Taedong River, which
is around South Pyongan Province, a very large sand market has established
itself around that area.
There are many different forms of labor
within the sand market. There are people who take a boat to the middle of the
river and scoop up the sand, workers who transport it to the riverside, and
those who load it onto trucks; the numbers are said to stretch into the
hundreds. So now you can see brokers for these workers. If you have five trucks
suddenly arriving for sand, you’re going to need people who can load them up,
right? That’s when the sand project managers seek brokers. The brokers quickly
dispatch the number of workers required, and they typically take ten percent of
what the workers make in return. These days, thanks to mobile phones, this
invisible labor market is even more tightly connected.
So when we hear news about the economy for
people being somewhat more stabilized, can we attribute this to the more
vibrant labor market rather than Kim Jong Un’s policies?
We can say that it’s thanks to market
activities and the labor market rather than state policies. But when you say
people’s livelihoods are stabilized, I’d have to say it’s different to what you
may think. To be more exact, it means simply that the likelihood of people
starving to death like in the 1990s is almost gone. But their standards of
living have not necessarily improved across the board. It means people are able
to find work in the labor market and can at least eat cornmeal mixed in with
rice. But, if you don’t have the smallest funds to invest to sell goods within
the market, or if you don’t have enough physical strength to work, things are
no different in that you can’t even get enough porridge to eat. Those people,
just as others did before, still get illnesses like tuberculosis and suffer
until they die.
On the other hand, there are those who
manage to land jobs as workers and obsessively save up that money to build a
foundation for themselves in the market. So in areas where there are a lot of
donjuLiterally "masters of money," donju refers to people who hav... More, who can hire day laborers, the labor market naturally develops in that
area and helps push up people’s standard of living, but that’s not the case in
all areas across the country, so we can’t say that’s the average in the North.
It’s sad to hear the disparity is growing
in the North. Thank you for that overview of the North Korean labor market.
Now, let’s move on to market trends.
We’ll go through the price of rice, other
foodstuffs, and the foreign currency in the North Korean markets last week.
The price of 1 kg of rice was 5,100 KPW in
Pyongyang, 5,050 KPW in Sinuiju, and 5,000 KPW in Hyesan. The cost of 1 kg of
corn kernels was 2,100 KPW in Pyongyang, 2,180 KPW in Sinuiju, and 2,200 KPW in
Hyesan.
The USD was trading at 8,120 KPW in
Pyongyang, 8,130 KPW in Sinuiju, and 8,050 KPW in Hyesan. The Renminbi was
trading at 1,270 KPW in Pyongyang, 1,280 KPW Sinuiju, and 1,270 KPW in Hyesan –
mostly similar to last week.
Moving along, 1 kg of pork was selling at
11,700 KPW in Pyongyang, 12,000 KPW in Sinuiju, and 12,500 KPW in Hyesan.
Gasoline was trading at 10,650 KPW per kg in Pyongyang, 10,500 KPW in Sinuiju,
and 10,700 KPW in Hyesan. Finally, 1 kg of diesel fuel was selling at 6,400 KPW
in Pyongyang, 6,500 KPW in Sinuiju, and 6,350 KPW in Hyesan.
* This segment reflects market conditions for the week of April 4-8.
