NK losing taste of capitalism
By Kim Tae-gyu
The closure of the inter-Korean joint industrial zone in the North’s town of Gaeseong will deprive North Koreans not only of dollars but also of the marshmallow-filled snacks they love.
As of 2012, 123 South Korean enterprises in Gaeseong paid an average of $1,608 annually to each of 53,000 North Koreans in a country whose GDP is estimated to be around $700, according to the Hyundai Research Institute Friday.
And there seems to be more as North Koreans started enjoying the sweetness of capitalism thanks to popular snack products, instant noodles and mixed coffee sachets.
In particular, Choco Pies, small cakes with a chocolate covering, were the king of snacks as they were known as one of the most sought-after perks.
“The Northern government receives the salaries of 53,000 Gaeseong workers. After taking a substantial cut, it passed the remainder to them in the form of coupons and North Korean money,” a Seoul analyst said.
“You can’t say that they were affluent. But compared to other regions, Gaeseong was a good place to live. Plus, they could earn side income by selling Choco Pies given to them.”
Orion, Korea’s second-largest confectionary company that manufactures Choco Pies, said that tens of thousands of the Choco Pies were distributed to employees at Gaeseong every day.
The retail price of the round snack is some 30 cents in South Korea but it sells at a much higher price in the North despite the latter’s poor purchasing power. “Choco Pies were given as an informal incentive as they sell for high prices on the North Korean black market. It was reported that the North asked South Korean firms not to provide too many Choco Pies,” he said.
He noted that the recent closure of the industrial complex just North of the Demilitarized Zone (DMZ) would deal a double blow to Gaeseong workers as they have lost their salaries and Choco Pies.
Amid the escalating tensions on the Korean Peninsula after Pyongyang’s third nuclear test on Feb. 12, the North banned access to Gaeseong and pulled out all of its workers last month.
As its dialogue offer was snubbed, Seoul reciprocated by withdrawing all of its workers there.
The Choco Pie fever even caught the attention of foreign media outlets such as The Guardian, which reported on it in a recent article.
“Instant noodles and mixed coffee sachets are also popular, but Choco Pies are resold for three or four times their original price and have achieved almost legendary status among North Korea-watchers,” it said.
Citing an expert, it added that Choco Pie has prompted people to change their mind toward capitalism so that they don’t believe the isolated country’s time-honored propaganda that the South is poorer than the Stalinist regime.
The marshmallow-filled snacks appeared to win the hearts and minds of people in communist countries as it is the foremost brand in the pie snack market of North Korea’s benefactor of China.
Orion became the first Korean food company to chalk up more than 1 trillion won in annual sales last year with a big proportion of the record turnover attributable to the popularity of Choco Pies.