North Korea’s state-run Tokchon Motor company desperately needs money to buy raw materials so it can make enough cars, trucks and auto parts to hit government-set production targets.
The company has therefore set up food stalls outside its gates selling roasted sweet potatoes to raise funds, sources in the country told Radio Free Asia.
Other state-run enterprises are doing the same thing, selling a range of foods from chestnuts to fruit, hoping to generate enough money to buy what they need.
It’s another example of how North Korea’s sputtering, state-run economy functions.
“They’re not just selling roasted sweet potatoes and roasted chestnuts” at these factories, a resident of South Pyongan province said on condition of anonymity for security reasons. “They’re selling bread, cigarettes, and fruit at prices you see at the market. It’s like they’re selling at a general food store.”
Production in North Korean factories ground to a halt when authorities closed the border with China in early 2020 at the start of the COVID-19 pandemic. That cut off imports of raw materials and other trade between the two countries.
Limited cross-border trade has since resumed, but output has not returned to pre-pandemic levels.
At the beginning of 2023, authorities in Pyongyang presented a 12-point economic plan for the new year, and threatened officials at state-run companies that they would be held accountable if they couldn’t fulfill their part in reaching these goals.
Key to this plan was for the factories to start up again – but without government funding for buying raw materials.
Authorities are pressuring manufacturers to make their own money to buy what they need, prompting them to fall back on selling basic foods, the sources said.
Tokchon Motor complex
The Tokchon Motor complex, located in South Pyongan, is one of North Korea’s biggest state-run manufacturing sites. Set up in 1958, it is now home to nine factories.
In 2017, supreme leader Kim Jong Un ordered Tokchon to produce a new type of 5-ton truck, and so the assembly lines were renovated and modernized to that end.
But sales and production nose-dived in 2020, and the factory had no money to procure supplies and raw materials, the source said.
“Since the beginning of this month, a roasted sweet potato stand has been installed at the front gate of each factory in the Tokchon Motor Complex,” the source said.
“The managers of each plant in the complex set up a stand to sell roasted sweet potatoes, saying that they would use the earnings to prepare materials and funds to produce automobile parts and tires,” he said.
Factories at the Namhung Youth Chemical Complex in the same province also began operating food stalls, another source told RFA on condition of anonymity to speak freely.
The complex has 30,000 employees and has been producing chemicals, fertilizer and soda water since the 1970s.
“The fertilizer plant says they are preparing for the farming season by procuring the parts needed to replace production facilities for urea fertilizer,” the second source said. “To that end, they set up a large shelf to sell sweet potatoes, dububap [rice-filled tofu pouches], and even alcohol.”
Cutting into family businesses
But the factory-run food stalls are cutting into the business of many families who operate small market stalls that are a fixture in the North Korean economy.
Since government-assigned jobs don’t provide nearly enough pay to survive on, most families have to run side businesses to generate additional income.
The factory-sold sweet potatoes are of better quality than those sold in the markets, so the factory stalls will almost certainly reduce the street vendors’ sales, the sources said.
That’s made many people upset.
“They are pointing fingers, saying [the factories] are ruining the livelihoods of the common people who depend on selling food at the markets,” the second source said.
Translated by Claire Shinyoung Oh Lee. Edited by Eugene Whong and Malcolm Foster.
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