North Korean authorities are still trying to control price gouging, but this remains difficult to monitor effectively, sources say

North Korea has ordered major provincial organizations, military-run factories and other facilities to prepare a months’ worth of food, signalling that the state is unable to provide rations anymore, Daily NK has learned.

“The order was handed down by provincial party committees to local people’s committees, Ministry of State Security offices, police stations, military-run factories run by the Second Economic Committee [of the Workers’ Party of Korea], and even orphanages,” a North Hamgyong Province-based source told Daily NK on Feb. 26.

“This is the first time the party has handed down an order for these organizations to prepare a months’ worth of food. It’s particularly noteworthy because North Korea isn’t facing the threat of war,” the source continued.

“The central authorities are simply telling organizations and factories in the provinces to deal with the food situation themselves because they can’t help anymore,” he concluded.

PREPARING FOR THE WORST

North Korea’s ration system has drastically weakened due to the country’s economic troubles, but the country’s elite, military-run factories, and other key institutions have continued to receive supplies from the government up until this point.

Now, however, the shutdown of the Sino-North Korean border due to the COVID-19 outbreak along with the impact of international sanctions appear to have created difficulties for the central government to hand out rations to these organizations.

The self-sufficiency order, however, did not apply to the upper crest of the country’s leadership nor key security agencies in the regime, sources said.

“The government appears to believe that the coronavirus situation will continue for a long time,” one source said. “The order is aimed at preparing for the worst yet to come.”

North Koreans with knowledge of the order have reportedly begun purchasing daily necessities in fear that prices will skyrocket even further.

“Prices will increase naturally if organizations start buying up food to use over the next month,” the source said. “The families of government workers have alerted each other about the order by mobile phone and have already begun buying up rice and [cooking] oil.”

The source also added that the skyrocketing of commodity prices at local markets is causing many people to hoard up supplies of food.

“The Sino-North Korean border will likely remain closed to trade a month from now so people think its best to hoard what they can now,” he said.

PRICE CONTROL CHALLENGES

Sino-North Korean trade was halted after North Korea closed the border with China in late January. The border closure has led to skyrocketing prices throughout the country. Food and Chinese-made goods have risen up to 60% of their prices before the border shutdown.

North Korean authorities have organized monitors to patrol local markets for price gouging and have ordered distributors to release stocks to lower prices; these efforts, however, have not been as effective as the authorities have hoped.

“Business people have gradually increased the price of [various] foodstuffs since the schools were put on holiday [on Feb. 20 – see Daily NK’s reporting on this here],” one source said.

“The authorities are trying to implement price controls but business people are only selling their wares at expensive prices when the monitors aren’t looking,” he added.

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