◆ Concealment of the sanction by the authorities
It seems that, the North Korean government did not explain to their people a new and more reinforced sanction has been imposed on their country by the international society, including China until mid May due to nuclear test and recent rocket launching. The official media and the speakers at a meeting for political study refer that American imperialist and its followers are blocking their country economically. However, “No explanation has been given for the detailed contents of the sanction, the subject goods or the reason,” said the reporting partners. Thee North Korean government hid the truth on purpose.
The reporting partner in South Pyongan Province said, “Kaesong industrial complex was closed because the government pushed ahead nuclear test which no one wanted. I think that the people would turn their backs on Kim Jong-un regime if the economy fell into chaos by the sanction from China.” ASIA PRESS asked him to investigate the customs office. The reporter reported that the officials from the customs office never admitted the effect of economic sanction although they had acknowledged the decrease of trade volume.
◆ Additional explanation about price index
Kim Jong-il regime suddenly executed a currency reform on November 2009. New currency was devalued to one hundredths from the old. It is a well known fact that big commotion occurred in the course of currency exchange as they imposed limits on amount and time span for exchange.
It was determined that the real price should be the same as the official one at the time. North Korean government released their policy that the official price should be based on the level that had been decided by ‘July 1. measure of economy management improvement.’ It seems that they gave a guiding price of 44 Won/kg for rice at market; ‘depending on region, price of 25 Won was determined,’ said other sources. Official wages remained unchanged while they devalued the new currency by one hundredths.
The price of staple foods, ‘rice,’ and ‘corn,’ at the market became 15-40 Won in the new currency on December 2009, followed by the currency reform. The above table was drawn around that time. North Korea experienced hyper inflation for several years due to the currency reform. Price index showed more than 100 times hike. Exchange rate between North Korean Won and Chinese RMB went down continuously.
However, the hike has slowed down from the spring of 2013. From July 2014, at its peak, price started declining. Exchange rate between the two currencies was stabilized. The reason might be due to the inflow of foreign currency through increased export to China, but, too many unexplainable factors leave further research in other cover.
◆ Economic sanction and the prices of goods
Following briefs are on the price trend of goods. There have been fluctuations in prices of goods; however, it is not certain whether it is due to other factors.
* Chinese RMB, which has been stable during several years, has gradually risen from early March when the sanction began. It was dropped again in mid March. The value fluctuation became wider.
* While the staple food, ‘rice,’ and ‘corn,’ have been stable for the last two years, the price of rice increased sharply from April by 20% compared to that of last year. On the opposite, corn price plummeted drastically since last year and shows severe fluctuation in May. The reason is not certain yet. As a result of price drop, farmers are greatly suffering.
* The price of gasoline and diesel is surely increasing, which pushed up the fare for commercial vehicle, called ‘Servi Car,’ and bus.
* The prices of shoes, clothes and boots from China have shown a sharp rise from early March. The price of a pair of shoes is said to have risen by 20-40 RMB, compared to that of last year. High quality clothes also show increase in price. There have been several cases of cornering Chinese products in Nasun market by wholesalers who expect price of goods to be risen in future.
*There is no report of limitation of daily goods from China at the border customs.
*There is no report that ordinary people feel any serious burden from the economic sanction on May 20 yet.
※ Major contents of Resolution 2270 to sanction North Korea
(1) Prohibition on exporting aviation fuel (including rocket fuel) to North Korea; exception allowed
(2) Prohibition on importing coal and iron ore from North Korea; exception allowed
(3) Requirement to inspect all North Korean cargo
(4) Denial of port access for North Korean cargo if there are reasonable grounds to suspect the violation of the Resolution
(5) Imposition of sweeping ban on North Korean banks
(6) Substantial expansion of the list of individuals and entities subject to the asset freeze and travel ban
* Editor’s notes on North Korean reporters
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