North Korean authorities have finished preparations to issue public bonds as part of efforts to overcome economic difficulties posed by the COVID-19 pandemic, Daily NK has learned.
North Korean leader Kim Jong Un signed off on the public bonds initiative at a politburo meeting held on Apr. 11, according to a source in North Korea Daily NK spoke to on Tuesday.
The source also stated that the Cabinet committee tasked with issuing the bonds has finished printing them and that the bonds were transported to North Korea’s central bank by Apr. 15.
North Korean authorities have also reportedly ordered organizations requiring state funds to purchase raw materials or supplies in the country to use bonds instead of cash from Apr. 20. These bonds will be used by the organizations to purchase manufactured goods from factories.
This means that such organizations like Construction Bureau 8, which leads the construction of the Pyongyang General Hospital, would use public bonds, instead of cash, to buy cement from a cement factory.
While 60% of the public bonds are allotted to such organizations, at least 40% of the bonds will be sold to individuals, which means that donju (North Korea’s wealthy entrepreneurial class) requiring funds to operate their businesses will be able to purchase the bonds directly from the country’s central bank.
DISCONTENT FROM THE DONJU
Manufacturers and members of the donju, however, are reportedly unhappy about what they call the government’s attempt to “temporarily fix” the country’s economic system through the issuing public bonds.
“The government failed to raise the funds it needed when it last floated bonds back in 2003,” another source in the country told Daily NK.
“The government is returning to this already failed way of doing things and only factories and business people will suffer,” he added.
Factories are being pressured to purchase the bonds and donju may face legal punishment or damage to their businesses if they fail to buy the bonds, Daily NK sources warned.
In response to the plan to float public bonds, high-level regime officials are reportedly starting to hoard US dollars. The Ministry of State Security (MSS), the country’s feared security agency, reportedly mobilized teams on Apr. 17 to crack down on those exchanging North Korean won for foreign currency.
“Money dealers have disappeared after it was made known that the MSS would arrest them for peddling dollars,” the first source told Daily NK.
“Donju in Pyongyang are desperate to buy up dollars but there’s nowhere to buy them,” he added.
Daily NK reported on Apr. 14 that North Korean officials had discussed the possibility of floating public bonds at a State Planning Commission meeting on Apr. 9. The last time North Korea floated public bonds was in 2003.
*Translated by Violet Kim
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