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Analysis: What's in Kim Jong Il's wallet?

This week's North Korean currency revaluation is aimed at restoring the state economic sector.

Despite the lack of demand for its products, Lee said, “the factory keeps producing anyhow so it can report that it's producing.'' With sales revenues negligible, “in many cases employees are not paid. Even if you are paid, with salaries of 800 to 1,500 won a month, you can't buy enough goods at the market to get by. At the time I defected, a kilo of rice cost 780 won.'' (By the beginning of last week the rice price was 2,000 won or more, South Korean news organizations reported, suggesting that countering raging inflation was another reason for revaluing the currency.)

Under such circumstances, instead of relying on sales of the factory's output, “the factory manager would send two-thirds of the workers out to make money in some other field and bring the proceeds back so the factory could report a profit.''

If workers on their own found private side work, they needed the approval of their bosses to take time off from their regular jobs, Lee said. The bosses, whose state-sector salaries might be in the range of 2,500 won and thus insufficient to support their own families, would pressure such employees for bribes and kickbacks.

“This happened to me,'' Lee said. “I had some money from my parents. When I started working as a civil servant I bought a car and went into business on the side, trading high-quality used electronics gear I bought from ships' captains who had brought the goods from Japan.''

Some people at city hall knew of his business dealings, Lee said, “and I had to bribe them so they would keep quiet. I could make $300 a month from my side job but I had to pay almost half of that in bribes. Bosses can make nuisances of themselves: ‘The fridge at my house is broken.' You have to buy them a new fridge. Or, ‘Someone's getting married.'''

North Koreans who have had a taste of the market economy and who know very well what sort of situation awaits them in the state sector will not be flocking gladly back to their factory jobs.

Bradley K. Martin, a veteran Asia correspondent and the author of "Under the Loving Care of the Fatherly Leader: North Korea and the Kim Dynasty," watches developments in Pyongyang for GlobalPost from bases in Japan and the United States.
 

http://www.globalpost.com/dispatch/worldview/091204/north-korea-economy