Managers of state-run shops in Hyesan have recently been quitting in droves after a government order ended a profit-sharing scheme, Daily NK has learned.<\/p>\n
A source in Yanggang Province told Daily NK on Friday that the order, declared on Oct. 11, said that managers of the shops can no longer take profits earned from selling goods starting Nov. 1.\u00a0<\/span><\/p>\n Since the \u201cArduous March\u201d of the 1990s, North Korea has given certain business people \u2014 including members of the country’s wealthy entrepeneurial class, the <\/span>donju<\/span><\/i> \u2014 the right to manage state-run shops. The business people who acquired these management rights have invested their own money to purchase goods for sale at the shops. So far, they have been giving a cut of the sales of those goods to the state, and using the remaining profits to operate the shops.<\/span><\/p>\n The state\u2019s cut differs from region to region, but it is reportedly quite high. At one state-run shop in Hyesan, managers reportedly handed an average of RMB 1,500 to 2,000 (about USD 200 to USD 270) over to the government each month.\u00a0<\/span><\/p>\n The managers have long been setting the sales targets of the shops on their own, importing goods from China to sell. S<\/span>ince the COVID-19 pandemic, however, some shops have been operating at a considerable loss as their owners struggle to get their hands on goods to sell given the closure of the border and the end of smuggling activities.\u00a0<\/span><\/p>\n