{"id":4532,"date":"2020-04-16T16:30:43","date_gmt":"2020-04-16T07:30:43","guid":{"rendered":"http:\/\/www.01.asiapress.org\/rimjin-gang\/?p=4532"},"modified":"2022-05-16T18:01:10","modified_gmt":"2022-05-16T09:01:10","slug":"forpro2","status":"publish","type":"post","link":"https:\/\/www.02.asiapress.org\/rimjin-gang\/2020\/04\/recommendations\/forpro2\/","title":{"rendered":"\uff1cN. Korea Pro Report (Part 2)\uff1e How is North Korea\u2019s Economy Faring in the Face of the Coronavirus Pandemic and Continued Sanctions? A Look at the Regime\u2019s Revenue Schemes"},"content":{"rendered":"
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A market supervisor scolds a young woman (left) for not paying the market fee. Photographed in Pyeongseong, South Pyongan Province in March, 2013 (ASIAPRESS)<\/p><\/div>\n

\u25c6 Kim Jong-un regime focuses on \u201cexploiting its people\u201d<\/h2>\n

The Kim Jong-un regime is attempting to earn foreign currency through a variety of schemes in order to compensate for the loss of trade due to the UN Security Council\u2019s economic sanctions. One of these schemes is the exploitation of funds from its own people.<\/p>\n

Part 1>>> \uff1cN. Korea Pro Report (Part 1)\uff1e How is North Korea\u2019s Economy Faring in the Face of the Coronavirus Pandemic and Continued Sanctions?<\/a><\/span><\/strong><\/p>\n

\u25c6 Reaching into the pockets of villagers- exploitation through mobilization<\/h2>\n

Though under-recognized by the outside world, one of the most important sources of foreign currency for the regime is its own populace. This exploitation can be categorized thusly:
\n1. Sales of goods and services
\n2. Tax collection and utility billing
\n3. Forced cash donations from citizens
\n4. Exploitation for free labor through mobilization<\/p>\n

North Korea has actively engaged in trade with China, with much trade being conducted in foreign currency, including the RMB and US dollar. This is because the North Korean won has no credibility at home or abroad. With the widespread use of foreign currency in North Korea, the values of goods are now measured solely in foreign currency. Although the US dollar prevails in and around Pyongyang, the RMB is highly circulated in areas closer to the Chinese border.<\/p>\n

A typical example of foreign currency procurement by the regime is through the sale of goods and services, such as at mobile phone terminals. North Korea introduced mobile communications in December 2008. Since then, the spread of the technology has exceeded expectations, with the number of subscribers to the service growing rapidly to about 6 million users.<\/p>\n

The mobile devices are made in China with North Korean specifications. There are various smartphones and tablets, with new products planned to be released soon as well. In October of last year, ASIAPRESS asked a reporting partner in North Korea to go to a vendor to investigate. The reporting partner saw 15 models on sale, with prices ranging from 200-700 US dollars. Apparently, the devices must be purchased in foreign currency.<\/p>\n

Earlier this year, ASIAPRESS asked a reporting partner to buy 3 of the latest smartphones for them to be sent to Japan. Inspecting the devices in Japan, we saw that the various applications, such as dictionaries, videos, and games, were quite impressive. The processing speed of the devices felt quite slow but only slightly lower than that of devices used in Japan.<\/p>\n

Through the sale of these mobile devices, how much foreign currency does the Kim Jong-un regime earn?
\nNext page :Big money made through sales at mobile phone terminals...<\/strong><\/p>\n

\u25c6 Big money made through sales at mobile phone terminals<\/h2>\n

Assuming an average of 1 million units sold each year at an average cost of 50 US dollars each, the regime would make an annual revenue of $50 million. In 2017, North Korea imported a total of $82 million worth of mobile devices from China. Due to economic sanctions, however, these imports were brought down to zero. As inventories were reduced, sales from these imported mobile devices suffered huge losses.<\/p>\n

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The latest mobile phone to be released in North Korea. It was bought and smuggled out from North Korea in early 2020 (ASIAPRESS)<\/p><\/div>\n

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A man turns over his notebook as he talks on his mobile phone. Photograph taken in the Moran District of downtown Pyongyang in June, 2011 (ASIAPRESS)<\/p><\/div>\n

Mostly in Pyongyang, the number of restaurants and shopping malls charging in foreign currency has also increased a lot over the last 5 years or so. The goal is to pull foreign currency from the pockets of the wealthy. In the 1970\u2019s, during the Kim Il-sung era, it was well known that there were \u201cforeign currency stores,\u201d where foreign products could be bought using foreign currency. The purpose of such stores was to take money from \u201cKorean returnees\u201d who were being sent money from their relatives back in Japan.<\/p>\n

\u25c6 Market vendor fees also an important source of state revenue<\/h2>\n

It is said that there are about 500 public markets around the country, which expanded from the black markets set up after the collapse of the nation\u2019s socialist economy. The Market Management Office under the Commercial Management Bureau of the People\u2019s Committee (local government) is in charge of these markets. Those who want to conduct business at the markets must report to this office and pay a daily fee for the right to sell goods at the market.<\/p>\n

Only married women can do business at markets. This is because men are forced to work at their assigned jobs in state-run enterprises.<\/p>\n

The size of such markets is usually quite small, with about 100 merchants in each. Large markets in cities such as Pyongyang, Chongjin, and Pyeongsang, however, have around 2,000 merchants each. The daily fee for merchants to use the market depends on the value of the items they sell. The daily fee for merchants selling food is quite affordable, while the fee for those selling shoes and clothes is quite high. It can range from 114 won to 1,140 won per day.<\/p>\n

At minimum, it can be assumed that an average of 500 merchants across 500 markets pay an average of 570 won per day through these daily market fees. If this is the case, then the regime brings in roughly 142,500,000 North Korean won per day. If the markets are open for 300 days each year, this would bring in a total of 42,750,000,000 won each year. In addition, the regime collects revenue from raising electricity bills and bus fares and has recently started collecting vehicle tolls as well.
\nNext page :Extortions of cash and labor from the people...<\/strong><\/p>\n

\u25c6 Extortions of cash and labor from the people<\/h2>\n

A strong complaint from the general populace is the forced collection of cash by the regime in the name of \u201csupport.\u201d Since the old days, the government has collected between 570 and 5,700 won from each person through local political units and schools. These funds were collected as a way of supporting troops, school facilities, and road maintenance. Since economic sanctions were tightened in 2017, however, the regime began collecting cash from citizens throughout the year. This was done in order to support the construction of the special tourism zone in Samjiyon and the Dancheon hydroelectric power plant, among other state projects.<\/p>\n

Reporting partners testify that, \u201c[The authorities] do not set an amount to be donated but force citizens to hand over cash as a \u2018show of sincerity.\u2019 If one hesitates, they will be criticized for their \u2018lack of loyalty to the Party.\u2019 Households cannot afford to keep giving 100 RMB each month. The \u2018donju\u2019 (newly-emerged wealthy class) who are conducting big business must pay more.\u201d<\/p>\n

Cash is not the only form of support. Between 2018 and 2019, the state also demanded labor from its citizens. During the construction of the Samjiyon Special Tourist Zone and the Dancheon Power Plant, students and workers were deployed to construction sites in 3-6 month rotations as part of specially mobilized \u201cconstruction brigades.\u201d<\/p>\n

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Residents mobilized for maintenance of riverbanks collect stones along the river. Photographed outside a northern provincial town in June, 2013 (ASIAPRESS)<\/p><\/div>\n

Samjiyon, located at the foot of Mount Baekdu, is famous for being the base of Kim Il-sung\u2019s operations against the Japanese. Known as the \u201cHoly Land of the Revolution,\u201d the regime also claims Samjiyon to be the birthplace of Kim Il-sung. (Though he was actually born in the Soviet Union.)<\/p>\n

In November 2016, Kim Jong-un ordered for an international tourist zone to be developed in Samjiyon. Despite the difficulty in raising funds under UN Security Council sanctions, the regime was able to redirect much of its resources towards the top-priority national project. When construction finished in December 2019, Kim Jong-un personally attended the completion ceremony.<\/p>\n

ASIAPRESS sent several reporting partners to investigate the site in Samjiyon. Made up from the \u201cconstruction brigades\u201d of each province, the \u201c216 Corps\u201d at the site worked on the plumbing of the area while living in nearby tents. Tens of thousands of workers and farmers were deployed at the site at all times. As such, the factories and cooperative farms from which these laborers were recruited suffered major setbacks in daily production.<\/p>\n

Each province was responsible for providing the daily meals for the laborers their province had sent to Samjiyon. Indeed, it is estimated that much of the funds and material costs of the construction were appropriated from the North Korean people. In other words, the regime made up for its lack of budget by exploiting its own people. (ISHIMARU Jiro)<\/p>\n

Part3 >>><\/strong> \uff1cN. Korea Pro Report (Part 3)\uff1e How is N. Korea\u2019s Economy Faring in the Face of the Coronavirus Pandemic and Continued Sanctions? A Look at the Regime\u2019s \u201cState Smuggling\u201d Operations<\/a><\/strong><\/span><\/p>\n

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