North Korean authorities are forcing arrested money changers to donate building materials for flood relief instead of sending them to labor camps, marking a shift in how illegal currency trading is punished. The practice has sparked criticism that the latest crackdown on currency exchange is aimed at addressing material shortages rather than stabilizing exchange rates.
In early October, three money changers from Sinuiju’s Chinson market were caught red-handed, according to a source in North Pyongan province. After visiting the police station, they transported building materials, including wood, cement, work uniforms and gloves, and 300 meals to the reconstruction site in the name of the municipal police.
“When the money changers were arrested, the police threatened to charge them with terrible crimes. The police accused them of treasonous behavior that disregarded the laws of the republic and endangered economic development and the survival of the state,” the source said. “But after the money changers bought and delivered supplies for reconstruction, the police praised them as patriots who had generously donated their own wealth to pave the way for the strength and prosperity of the motherland.”
In early April, North Korea’s national police agency, the Ministry of Social Security, announced a strict ban on the distribution of goods and trade in foreign currency outside of state control, and that ban appears to remain in effect.
Authorities are on the lookout for anyone who exchanges foreign currency with private money traders in markets – a behavior considered “non-socialist” – rather than at banks or official currency exchanges, which use state-mandated exchange rates.
The crackdown on the private exchange of foreign currency appears to be an attempt to stabilize exchange rates and bring foreign currency currently in the private sector into the hands of the state. But as exchange rates continue to rise, some argue that the crackdown on money changers is actually driving up exchange rates.
“The government is cracking down on money changers, who it says are conducting secret transactions in defiance of fixed exchange rates. But as the crackdown continues, exchange rates continue to rise. As some of the arrested money changers are shaken down for building materials, more people are criticizing the authorities for being more interested in acquiring materials than in suppressing the exchange rate,” the source said.
“In North Korea, making money is like walking a dangerous tightrope between treason and patriotism. Even engaging in absolutely forbidden activities isn’t necessarily a death sentence, depending on who does it. As this incident shows, lawbreakers can still be lauded as patriots if they donate their assets to projects of special interest to the government.”
The Daily NK works with a network of sources in North Korea, China, and elsewhere. For security reasons, their identities remain anonymous.
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