Authorities Investigate Big Spenders at North Korean International Merchandise Fair

nk-international-merch-fair-crop.jpg The opening ceremony of the Chongjin International Merchandise Fair Exhibition in Chongjin, North Korea October 14, 2019.
Yonhap News

North Korean authorities are investigating the source of funds used by residents who purchased large quantities of high-priced goods at an international merchandise fair held in Chongjin, North Hamgyong province in mid-October, RFA has learned.

The 10-day fair invited international companies, mostly from China, to a stadium in Chongjin to sell foreign goods. Authorities had encouraged residents to attend the event, but it ended up being more popular than they had anticipated, sources say.

After it was determined that some of the wealthier attendees bought items such as cosmetics, clothing and food with the intent to resell the goods for profit, authorities began to investigate the source of their funds.

A resident of North Hamgyong told RFA’s Korean Service on Nov 23 that the event was so popular that security dispatched to the stadium was overwhelmed.

“At first, only one of the Chongjin Stadium exits was going to be open, but when the residents unexpectedly flocked to the stadium, the authorities had to open three more exits,” said the source.

“It was so successful that police and security agents had to be mobilized to guard the area in and around the exhibition hall,” the source added.

The source implied that many of the buyers were under the impression that authorities wanted them to spend large amounts of money, as the provincial party had, a month before the fair, told each city, county and district in North Hamgyong to make as many residents as possible attend.

“Seeing how the provincial party had actively encouraged participation, people took out their hidden foreign currency and bought large quantities of items that could be profitable,” said the source.

Salaries in North Korea are generally far less than enough for citizens to support themselves. This has facilitated a burgeoning black market where it is preferable to trade using foreign currency, so many of the wealthier members of society have stockpiles of foreign money, which they have to keep hidden, because of the questionable legality of how it was acquired.

“When authorities changed their attitude [towards the fair], and began looking into the source of the money [people were spending], the residents, especially the rich, became quite upset,” said the source.

The source said that many feel as if the fair had been a setup to bring hidden sources of money out into the open.

“Some residents are complaining that the authorities held the international merchandise fair to try to extract stashes of money from [wealthy] people,” the source said.

Another North Hamgyong resident told RFA on the same day that wealthy buyers at the fair bought up entire stocks of merchandise.

“Some residents bought an entire container of daily necessities and food at the International Merchandise Fair. Someone bought all the Chinese frozen dumplings from a reefer truck,” the second source said.

“Residents of Chongjin flocked to buy Chinese-made electric massagers, motorcycles, and electric bicycles in the morning, but found that most of these were not being sold. Instead, household necessities, including cosmetics and clothes, and food items were exhibited,” said the second source.

Regardless, these items were quickly snapped up.

“The residents at the fair were surprised to see most of the exhibits were sold out so quickly, saying they didn’t know there were so many rich people in Chongjin,” the second source said.

The second source said that fairs like this one were so rare, and generally limited to special economic zones that operate under different rules regarding foreign commerce.

“In the past, [the fair] was held only in [North Hamgyong’s] Rason Special Economic Zone, but this time it was held in Chongjin for the first time, drawing lots of attention from the residents,” the second source said.

“But when law enforcement began to investigate those who actively participated in the event, the [stated] purpose of the much-awaited international merchandise fair was clearly overshadowed.”

The government may have used the fair as a ploy to secure foreign currency from wealthy North Koreans as international sanctions continue amid stalled negotiations with the U.S., said experts familiar with the situation, who declined to be named due to fear of reprisal.

Reported by Jieun Kim for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Eugene Whong.

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