Authorities tacitly recognize market-determined prices

The North Korean authorities officially
determine product prices in North Korea. However, according to inside sources,
these prices are being ignored more and more in favor of prices determined by
market forces. Instead of official price designations, the authorities have
posted ‘price ceilings,’ but they are not strictly enforcing them. 

In a telephone conversation with the Daily
NK on November 13th, a source from North Hamgyong Province said, “Official
prices have almost completely disappeared from the markets.  Reflecting
this trend, even the market management offices located in each official
marketplace are listing ‘price ceilings’ instead of official prices.”  

Daily NK spoke with a source in South
Hamgyong Province who confirmed this to be the case there as well.

“Furthermore, the price ceilings are being
determined by the market rates, so the meaning of these regulations is fading.
For example, if the going rate for rice at any given time is 5,000 KPW [0.58 USD] per
kilogram, than the price ceiling would be set at something like 4,500- 5,000
KPW [0.52-0.58 USD],” she said.

“These ceiling prices are indeed posted,
but they are not enforced. Ministry of People’s Safety [which act as the
North’s police forces] officers are not able to command merchants to lower
their prices.  The atmosphere is such that if they even tried, they would
likely be insulted and cursed at by the vendors.”

She added, “At the market, it has been quite some time
since people realized that the official prices are meaningless. If a buyer
asked a merchant for the official price of a given product, that merchant would
likely to scold the buyer for not having proper control of his mental

In a true indication that the national
prices are being disregarded on a wide-scale level, even the authorities have
shown signs that they are interested in understanding how market rates work.

For example, from Provincial People’s Committees, cabinet
ministers are being kept abreast of the local market rate for product prices on
a daily basis. “They are trying to understand the exact market prices for given
quantities of goods like electronics and foodstuffs,” the source explained.

When asked to describe how ordinary North
Korean folks were reacting to this news, she said, “People are saying
things like, ‘The authorities explain that they want to understand rice prices
so they can think of measures to improve the lives of the people, but that just
makes us laugh. The best thing they can do to help is to stay out of the way.’”