“Officials from the commercial management department in Hamhung’s people’s committee started to enforce price controls in local markets about three or four days ago,” a South Hamgyong Province-based source told Daily NK on Feb. 10.
“The people’s committee is ordering local merchants not to raise their prices because of the crisis surrounding the coronavirus. They have even threatened merchants that they will no longer be allowed to conduct business activities if they raise their prices,” the source added.
Officials affiliated with the commercial management department are checking to see whether merchants have raised prices at Samil Market, Sapo Market, Kumsa Market and other markets in Hamhung at least twice a day, according to sources.
Kumsa Market is in a two-story building and merchants on the first floor reportedly contact those on the second-floor whenever commercial department officials show up to warn them.
TIGHTENING CONTROL OVER PRICES
North Korea began placing price controls over goods sold at markets right after the currency reform of 2009. Price controls disappeared, however, as the negative consequences of the currency reform grew larger. Economic officials have attempted to implement price controls in the past several times, but have failed.
A Daily NK source in Ryanggang Province also reported that people’s committee officials are monitoring prices in markets in the province, but local merchants are finding ways to avoid getting into trouble for raising their prices.
“Merchants switch the prices on their goods to those used [before the crisis] whenever officials make their rounds,” the source said.
North Koreans have expressed conflicting views on the government’s recent implementation of price controls.
“Some people are saying that it’s wrong to raise prices during a crisis like this,” one source told Daily NK. “They think that the price controls are a good thing and consider it natural for the government to tighten controls during times of crisis.”
Other North Koreans view things differently: “To some North Koreans, the price controls remind them of the government’s heavy-handed control over the markets in the early 2000s,” the source explained.
SKYROCKETING COMMODITY PRICES
Daily NK sources reported that the closure of the Sino-North Korean border has led to a drastic rise in commodity prices. Some areas have seen fuel prices rise by at least 60%. If the border remains closed, the North Korean economy could experience a drastic increase in inflation, sources warned.
“Market management authorities and monitoring teams are monitoring prices at the five major markets in Hyesan along with smaller street markets,” the Ryanggang Province told Daily NK. “Merchants are trying to avoid selling products at cheaper prices because they don’t know how long the crisis will last.”
The source also added that Chinese rice is now more expensive than North Korean rice, which has led market merchants at Hyesan’s five rice distributors to stop selling rice and flour to market merchants.
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