Green Shoots of Private Enterprise Growth

Growth and improvement is evident in some areas of the private sector in North Korea, Ishimaru Jiro of ASIAPRESS revealed on the 16th, pointing to the growth of bigger, better private transit concerns and relatively productive coal mining operations as evidence of this trend.

In the past, trains were almost the only viable means of long-distance transportation in North Korea. Then, as private business began to grow and the railways fell into a deep malaise, vehicles such as trucks and cars belonging to military bases, state security and state enterprises were pushed into service to earn money for moving people; this, the so-called ‘servi-cha’ industry.

The servi-cha industry has long been fragmented and small scale; but now transportation companies run by rich individuals (‘donju’) which purchase several buses and hire drivers, guides and mechanics, are acting just as a transit company in a capitalist state would do.

With profit-sharing and bribery as the backbone, a large number of North Korean organs and enterprises have decided to lend their name to these individuals, fuelling the growth and development of a network of sorts.

“From the early 2000s, a high-speed bus network mostly between major cities began to emerge,” Ishimaru, revealing the latest research by ASIAPRESS internal North Korean sources, commented. “The companies are packaged as an enterprise affiliated to some state authority outwardly, but they are actually operated by individuals who pay kickbacks to that authority.”

The People’s Safety Ministry affiliated 116 Task Force Team is one such transportation company, Ishimaru says. It operates buses connecting Shinuiju, South Pyongan Province and Pyongyang. Ordinarily, the bus parks at a station or major public location, and then departs when it is full of passengers going to the next destination.

However, there are risks. Ishimaru also revealed that the Chosun People’s Army’s General Political Department-affiliated ‘Ullim’, which had monopolized bus operations between Chongjin and Musan, was dissolved in April, 2011 after it failed to pay off the proper people.

Meanwhile, Ishimaru also noted the capitalistic movement of free labor between private coal mines called Jato; private operations run by individuals with mining rights purchased from state operators.

According to Kim Dong Chul, an ASIAPRESS reporter living in North Korea, workers nominally assigned to state-operated mines commonly pay a bribe to move to these privately-run mines. Bad treatment such as low salaries and poor or non-existent distribution in state-operated mines has thus forged a small but significant labor market of people moving into the private sector.

Ishimaru said, “Basically, due to a lack of labor in state-operated mines, they try to avoid sending laborers to Jato. But laborers with money often move to Jato by either mobilizing their network or bribing them.”

The new mining concerns are productive, too. Kim added, “Jato around Suncheon, Cheongsung and Sincheon mines are producing an amount of coal that far exceeds that produced by state-operated mines. In Cheongsung there are around 200 Jato to my knowledge. These mines produce more than 1,000 tons of coal a day; and more than 1,000 laborers work there.”

“The coal produced by Jato is exported to China in exchange for foreign currency rather than being sold in the black markets,” he added, going on, “Coal is the largest export to China for foreign currency, and actually a great deal of this coal is from Jato.”

The important thing is not production, though, it is that laborers are able to quit and move on whenever they want. Kim added, “That is a free labor market, where a laborer who quits can move to another Jato.”