Price like ‘missiles’… North Koreans are in chaos

Jin Yong-ho(pseudonym, 48) living in North Hamkyong province was shocked as he returned to his hometown in one year. Price levels at the marketplace had skyrocketed about four times in a year. Before the economic crisis, Jin who was an engineer who repaired various equipments used in hospitals, had to jump on the road to could survive after the hospital was closed, because he did not have anything to repair.

Since he never had any experience of sales, it ended in failure multiple times. From smuggling trade from China, he got swindled. In order to get his money back, he crossed the river, and this was his first defection to China. Since he landed on Chinese soil for the first time in 1999, he was arrested and deported twice. However, with the help from a relative who has the high position of Department of State Security, he was able to have an easier detention period. Then, after 2002, he has been crossing the border to China (partially) legally by bribing guards at the border.

The market price jumped 3-4 times in one year

Jin crossed the river with his son in December of 2003 and he collected some money by construction work for a year with the help of a Chinese friend whom he became acquainted with through smuggling. But he went back to North Korea in September 2004 to bring the rest of his family to China. From his one month stay in North Korea, he realized “the market prices in North Korea were going up like a missile.” In other words, prices are rising endlessly.

Jin is now a successful salesperson and he still has notes written down of prices from all regional marketplaces a year ago. Due to the difficulty in transportation, there exists a wide range of price differences in each regional marketplace. The difficulty of transporting goods from place to place resulted in creating ‘middle businesses’. The standard of North Korean market price is determined by the price of rice. It is because the foremost interest of North Koreans is food.

According to Jin’s notes, the price of rice at a marketplace in November, 2003 was 250~300 won per kg. Rice made in the DPRK was 270 won, and imported rice- which is considered as inferior to domestic products-was 250 won. Secretly distributed, the price of South Korean rice was sold at 300 won. In general, the rice of corn was half the price of rice, thus it was sold at 150 won at the time. The price of pork meat which North Koreans buy once in a year as the ‘special event of the year,’ was about 900 won. However, as the price skyrocketed this year (2004), rice was sold at 800~1200 won, corn was sold at 400~600 won, and pork meat at 2000~3500 won. Residents sigh and say, “When we wake up, the price is up by 10 won every morning.”

The North Korean government declared the July first economic reform in 2002. Major changes were a) rises in wages, b) establishment of a national price, c) expansion of a self-supporting accounting system, and d) strengthening the controls of marketplaces. Thus, the usual wage, 100-150 won went up, exceeding 2000 won. The nationally set price of rice was 8 won in the past, but now it is 44 won (in the past, the price of rice at the marketplaces was 60~70 won). The government banned the activities at the market places except for in a few designated places. In particular, the industrial goods business was completely stopped. The government’s expansion of the autonomy of enterprise management including the expansion of a ‘self-supporting accounting system’ in which benefits are distributed in accordance with the business showings is interpreted as ‘the signal fire of economic reform’ by outside observers.

Killing inflation- another missile fired by Kim Jong Il.

However, the reform has not lasted three months. The enterprise without capital and equipment could not survive through ‘self-supporting accounting system’. Since it was the government’s policy, enterprises tried to give raised wages for the first few months, but not many of them survived. The rise of National set price and control of market place rather resulted in boosting prices of goods at the market places. Inflation was stimulated by the suddenly increased amount of money in the market and high priced currency (1000 won, 5000 won). Controlled for a few months, marketplaces were unavoidably permitted again. Thus the July first reform in 2002 only raised the market prices and made residents’ lives chaotic and also closed the curtain without any success or accomplishments.

Kim Jong Il has fired another missile other than Taepodong towards his own people. Nobody knows where the final destination of this missile of inflation may be. Most of the masses suffer from the chaos created by the ‘back draft’ of the missile, whereas people with money and power purchase stacks of goods and accumulate more wealth and power.

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