GoodFriends: Research Institute For North Korean Society

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North Korea Today No. 382 December 22, 2010

[“Good Friends” aims to help the North Korean people from a humanistic point of view and publishes “North Korea Today” describing the way the North Korean people live as accurately as possible. We at Good Friends also hope to be a bridge between the North Korean people and the world.]
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Renminbi (Chinese Yuan) and US Dollars Take the Place of North Korean Won
Renminbi Used even in the State Stores
Renminbi Accepted for Bribes
Bribe Needed to Sell Firewood
“No problem walking 20 km to sell firewood”
Head of Military Mobilization Dept. of Chungjin Arrested for Stealing Supplies
Yonsa County Getting Extra Cash Due to an Abundance of Mushrooms
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Renminbi (Chinese Yuan) and US Dollars Take the Place of North Korean Won
Currently, transactions in the major North Korean market places, such as Sunam Market in Chungjin, Chupyong Market in Hamheung, Chaeha Market in Sinuiju and Sinheung Market in Hyesan, are primarily taking place with either the renminbi or other foreign currencies, most likely the US dollar. Wholesalers selling to retailers are reluctant to deal in North Korean won due to its unpredictable exchange rates. Moreover, although retailers accept won from consumers for minor purchases, larger purchases require US dollars or renminbi. Retail prices are also commonly marked in renminbi, which may lead to misunderstandings.
Last November at Sinheung Market, a farmer who was not familiar with current market trends thought that the price of rice had plummeted. He handed 700 won to a rice vender and asked for seven bags. The merchant was shocked and told the farmer that one bag was 100 won in renminbi. The merchant mocked the farmer, asking him where he was from and telling him that he “must have come from somewhere deep in the mountain where no one lives.” The farmer angrily retorted that because they are in North Korea, it is expected that one would be speaking in terms of North Korean won. The merchant continued to tease the farmer in front of a laughing crowd that gathered in reaction to the commotion. “You don’t even know what’s going on in the world,” he yelled, “What kind of person still can’t calculate prices in dollars or renminbi.”

Renminbi (Chinese Yuan) Used even in the State Stores
Recently, the renminbi has gained preference over the won not only in market places but also in the state operated stores as well. Previously, one could only use dollars or renminbi in foreign currency stores, but now their use has spread throughout North Korea. It is now natural for people to use dollars or renminbi to pay for televisions, recorders, bicycles, washers, electronics, etc. For instance, when a clerk asks for 700 won for a television set, urban residents know that clerk is speaking in terms of yuan without being told so. Although the prices of goods often change because of the volatile exchange rates that accompany the dollar and renminbi, people do not seem to trust or widely use the North Korean currency, which shows that it is not widely trusted.

Renminbi (Chinese Yuan) Accepted for Bribes
The renminbi is accepted as tender not only in market places but also by police officers who readily take bribes from those conducting illegal activities. They prefer the U.S. dollar but renminbi is the currency they accept the most. They used to take North Korean won, but it’s no longer welcome due to its devaluation. Officers secretly ask for bribes from family members seeking acquittals of their detained loved ones. In Hoeryong City, North Hamgyong Province, security officers freed criminals sentenced to 6 months of labor for 600 yuan at the rate of 100 yuan per one month sentenced.

Bribe needed to Sell Firewood
Residents of Sukmak-ri of Booryong County, North Hamgyong Province, are busy collecting firewood in this winter. Sukmak-ri is a farming area near the Chungam District, but over 95% of the residents maintain their livings by selling firewood from nearby mountains. Sometimes people grow grains on the small patches of field, but the soil is poorly suited for even corns, so many of them usually plant sorghum, millet, and beans for tofu. In winter, however, most residents try their best to chop and collect firewood in the mountains and walk 30 Li* to sell them at Soonam Market in Chungjin or Namhyang Market in the Pohang Distict.

They are poor, so they cannot use any vehicle. Most people walk to Chungjin City and carry firewood by carrying them on their backs or using handcarts. While people collect firewood to feed their family and themselves, the local government is faced with a serious situation about the illegal firewood collection. Forest rangers of Industrial Forest Management Department affiliated to the Chungam Environment Protection Bureau regulate firewood traders at the crossroads from Sukmak-ri of Booryong County to Chungjin City. However, these officials are obsessed with taking bribes, so anyone can avoid this regulation by giving them a pack of “Cat” cigarettes.

Some people try to bribe them with “Sunbong” brand of cigarettes instead of “Cat” to save money, but the officials refuse them saying, “I don’t smoke this. I hate it.” The “Cat” brand’s real name is “CRAVEN A” which Chosun Seokyong International Co. and BAT (British American Tobacco) of England have manufactured together since September 2001. A cat’s drawing is on the pack, so people call it the “Cat” cigarette. “Sunbong” is cigarette jointly produced by North Korea and China, and it is cheaper than Chinese brands. “Cat” is the best brand for bribes. Although most of “Cat” cigarettes are fakes, its’ quality is better than “Sunbong” and it is more expensive than its counterpart, so “Cat” has been regarded a good item for bribery over 10 years. Some people who cannot afford to give bribes every time give firewood instead to these officials.

*Li: a distance unit in Korea and 1 Li is around 393 m, 25 Li is approximately 10 km.

“No problem walking 20 km to sell firewood”
Not many people can afford Cat cigarettes (over 300 NK Won a pack) for a bribe to sell firewood, especially in these times whereby even a single meal is hard to come by. As the crackdown on logging and wood selling tightens, many residents in Sukmak-ri leave their house around 2 AM when the police officers are not yet around. They need to get out of the town before 4 AM to get to Chungjin Market by 9 AM. If lucky, they can sell their load during the morning, buy some rice or corn, and head home early. If the selling doesn’t go well, they often arrive home after 9 or 10 PM.

Sukmak-ri residents make a round trip of more than 20 km round on foot every day to sell firewood. They say they are now used to it because they have been doing this since the Arduous March. The division of labor is well set out for every household – the father and children go to mountains to get firewood, and the mother walks and drags the wood to Chungjin City and sells it in the market. If one of the parents is sick or absent, the remaining parent collects firewood and the children carries it on a cart and sell. Therefore, many children in this village often skip school to go and sell firewood. Now that it has been ten years after the Arduous March, it is hard to collect firewood in the nearby mountains. Imprudent logging has made mountains almost bare, and people have to go farther and farther to get firewood. Accordingly, the price of firewood is going up every year.

In Chungjin city, a bushel of ten branches sells for 200 NK won, which translates into 5,500 – 6,500 NK won a cart on average. Cold winter weather helps the sale of firewood for heating, and those with good sales skills can find a regular customer among restaurants in the city. This means that they do not have to stand in the cold wind in the market until the wood gets sold; they just bring the wood to their customer and get paid right away. Quite a few ‘well-off’ households live in this way – living on their own produce from small land patch farming and selling firewood to buy necessary items and save money. Some households even have a color TV set and VCR, which are rare in rural areas. However, poor households and those with patients or college students struggle to earn money for daily survival.

Head of Military Mobilization Department of Chungjin Arrested for Stealing Wartime Supplies
The head of Military Mobilization Department (MMD) of Chungjin City, North Hamgyong Province, was fired and arrested because he embezzled wartime supplies. He had stolen gasoline and diesel stored in Sukmak Laborer’s District of Buryung and accumulated a large amount of money since last year. Last year when the military storage had oil items, such as 500 tons of gasoline and 600 tons of diesel oil, he sold oil to fishing boar owners from May to September of last year and made five million North Korean Won before the currency reform. The season was prime time of fishing cuttlefish, so many ship owners needed oil. With his downfall, officials in the department must have felt extremely nervous because they systemically helped their boss conduct illegal business and also stole a lot of oil. Each department has to try to survive by themselves, but officials of MMD are particularly well-positioned to embezzle military supplies stored in the storage. Of these supplies, they can sell gasoline and diesel at a good price, and illegally selling tires and other auto parts has become customary in this department. These illegal items are usually traded at Soonam market in Chungjin. Because the situation is so prevalent, punishing the department head won’t solve the problem. At the same time, the city police authority sent young female security agents between the ages of 18 and 22 to guard the wartime supplies. The agency organized 7 to 8 agents as one unit with women who graduated middle school serving for four years. Most of these members are usually daughters of officials.

Yonsa County — Getting Extra Cash Due to an Abundance of Mushrooms
Thanks to the significant amount of rain runoff this year, Yonsa County residents in North Hamgyong Province have profited by collecting and selling oak tree mushrooms, black mushrooms, acorns, pine nuts, etc. While skillful collectors made over several hundred US dollars, even the worst made at least some money. Residents are more focused in such collateral income because Yonsa County’s mountainous landscape and limited amount of farmable land is generally ill-suited for agriculture. Accordingly, they collect mushrooms or other marketable products in the fall and hunt wild boars, deer and wild rabbits in the winter. Residents comfort themselves through poking fun at primitive nature of their hunter-gatherer lifestyle by saying, “just as the wild boar digs with its mouth and the chicken kicks dirt backwards with its feet in search of food, everybody (each person) finds his own way to survive.”

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