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N. Korean Ruling Class’ Love for Luxury Goods

#Korea, Today and Tomorrow l 2023-12-13

Korea, Today and Tomorrow

In October, four North Korean people defected to South Korea. During interagency questioning, they said they were so hungry that they came to South Korea to survive. That is, hunger drove them to risk their own lives to cross the border. 

North Korean authorities are busy publicizing a good harvest through the media. In reality, however, that’s not the case. 

Since North Korean leader Kim Jong-un took power, his family members have worn luxury items when engaging in public activities. How much does the ruling class in the country love luxury goods? 

Today, we’ll look at the trends in the use of luxury goods by North Korea’s privileged inner circle with Jeong Eun-yi, researcher at the Korea Institute for National Unification. 

There is a person who has often been mentioned in regards to North Korea’s hereditary succession. The person is leader Kim Jong-un’s daughter Kim Ju-ae, who made her public appearance with her father at the test site for an intercontinental ballistic missile on November 18 last year. 

Kim Ju-ae has appeared in public quite often over the past year. When observing the test launch of the “Hwasong-17” missile on March 16 this year, she was dressed in a jacket that appeared to be a product of a French luxury brand. 

At the time, Kim Ju-ae was seen wearing a black, hooded down jacket from French luxury brand Christian Dior. Taking a look at the enlarged photo of the North Korean leader’s daughter, we can see that the Christian Dior piece featured its unique square and rhomboid embroidery. Her winter jacket appeared to be a Dior Kids’ hooded down jacket. According to Dior’s website, the product is around 1,900 US dollars. 

Kim Jong-un’s younger sister Kim Yo-jong, who is the vice minister of the Workers’ Party, was holding a French bag worth some 7,000 dollars during her visit to an aviation plant in Russia in September. The Kim family’s love for luxury brands is not something that started just recently. 

Kim Jong-un is an enthusiast of Swiss watches. Having spent his youth studying in Bern, Switzerland, Kim has a profound knowledge about Swiss timepieces. He is known to often purchase Rolex and other watches as gifts for high-ranking officials. Jing Daily, which is a Chinese online publication on luxuries, has reported that Kim’s wife Ri Sol-ju is also greatly interested in foreign luxury brands. She likes to wear a Swiss-made Movado watch. Movado is known for the first-ever watch design included in the inventory of the Museum of Modern Art in New York. Both Ri and her husband were seen wearing Movado watches. 

Since his early years in office, Kim Jong-un has liked to wear wristwatches from Swiss-made luxury brands, such as Patek Philippe, Movado and IWC. His wife Ri Sol-ju has also been spotted wearing high-priced handbags and necklaces as well as clothes from luxury brands. The Kim Jong-un family’s fondness for luxury goods does not end here. 

In 2021, the North Korean leader unveiled a plan to build ultra-luxury homes as gifts for model workers. On every major occasion, he has presented luxury items to officials to keep them loyal. That is to say, he is using the so-called “gift politics” as a means of governing his country. 

North Korean Foreign Minister Choe Son-hui also carried an ostrich-leather handbag from an Italian luxury brand during her visit to Russia in September. The rare model, which is no longer in production, is traded at 10-thousand dollars on websites for second-hand shopping. 

In fact, U.N. members are banned from exporting luxury goods to North Korea under U.N. Security Council resolutions. 

Swiss luxury goods favored by Kim Jong-un are actually banned from being exported to North Korea under the Swiss government’s own sanctions imposed against the North in 2016. So, how can North Korea import luxury items from overseas? 

The U.N. Security Council has prohibited the export of luxury goods to North Korea, since it adopted Resolution 1718 in 2006. But when Kim Jong-un visited Russia, he brought his bulletproof Mercedes-Benz Maybach, a top-of-the-line car whose import into North Korea is banned under U.N. sanctions. This indicates that it is actually difficult to prevent all luxury goods from entering North Korea. 

North Korean trade representatives dispatched overseas, their wives and even laborers working abroad may purchase luxury goods such as bags and clothes and bring them directly into the North. People in China may give such goods to their trade partners in North Korea as gifts. 

When it comes to luxury goods, ordinary North Koreans are said to prefer Chanel perfume. These days, it is common to see high-level officials exchange luxury goods as wedding gifts. 

The “Secretary’s Office” that assists leader Kim Jong-un or top officials in North Korea select luxury items to be purchased. North Korean embassy officials and other elites in Europe and in pro-North Korea countries serve as conduits to bring the goods directly into the North. North Korean workers dispatched overseas also play a role in procuring luxury goods. 

North Korea’s imports of luxury goods from China reached 40.64 million dollars as of July this year. It means that not only Kim Jong-un’s family but emerging capitalists in North Korea, known as donju, are also creating demand for luxury goods. Reflecting this trend, luxury brands are actually on display in North Korean department stores. 

In North Korea, there are department stores in each city and province. In Pyongyang alone, there are more than ten department stores. The Taesong(대성) Department Store that opened in August 2019 is stocked with luxury brands like Chanel and Ferragamo as well as watch brands such as Rolex, Omega and Tissot. Also, Nike and Adidas products as well as home appliances such as Philips TVs and Siemens front-load washing machines are available for local consumers. The Rakwon(낙원) Department Store operated by Office 39 of the Workers’ Party also has a large number of overseas luxury brands such as Chanel, Dior and Lancome. 

The Taesong Department Store in Pyongyang is managed by Office 39 of the Workers’ Party. The office is a secretive organization in charge of leader Kim Jong-un’s personal slush fund. This department store is the main outlet for selling luxury products. 

The sportswear section sells Nike shoes and others. The photos of the department store released by the Chosun Shinbo newspaper last year showed Chanel cosmetics and Dyson vacuum cleaners. 

Now we can find that luxury goods sections have opened in North Korean department stores. Researcher Jeong explains what this means. 

Markets have developed significantly in North Korea, while trade has also increased, compared to the past. In the process, many people have traveled abroad and the new “donju” class has emerged to accumulate wealth. The wealthy individuals have turned their eyes to foreign luxury brands. They tend to spend money to show off their wealth and enjoy catching people’s attention. Foreign sports brands often appear in TV dramas and other programs, while department stores are displaying luxury goods. It means that those with economic power have developed a strong desire to purchase those items. In one of the noticeable changes, many North Koreans choose to switch to new mobile phones, even if their old phones still function well. 

The history of North Korean markets dates back to the mid-1990s, when locals faced a severe economic crisis called the “Arduous March.” As the rationing system collapsed due to food shortages, local residents voluntarily created markets for their own survival. Some people quickly adapted to market principles and turned themselves into donju, which means “masters of money.” 

The wealthy businesspeople amassed great wealth in diverse fields including manufacturing, service, trade and construction. They carry around three to four mobile phones and live in luxury apartments. They regard premium or luxury goods as a means of showing off their ability. For them, it is important to spend money. They proudly show that they can afford to buy luxury goods, not caring about how general citizens perceive them. Their attitude is instigating polarization within North Korean society. 

North Korea suffers from an absolute shortage of food. While some people find it very challenging even to secure food, some others make money through market activities. The development of markets in North Korea means that some regions have become increasingly urbanized, with the gap between urban and rural areas widening further. People living in cities are better off than those in rural areas, as they earn money at the markets. Many say that more and more city people are consuming rice, while those in farming villages have difficulty even in finding corn, although they do produce crops. The development of markets could widen the gap between regions, and this trend is also seen in North Korea. 

In a report released in March this year, the Food and Agriculture Organization of the United Nations categorized North Korea as “a country with widespread lack of access to food.” However, the country’s ruling class and those who have accumulated wealth through market activities are leading different lives. 

In Pyongyang, Japanese and Italian restaurants for the upper class are enjoying a boom. Coffee shops offering the latest menus such as a variety of coffees and lattes made by professional baristas, smoothies and waffles are also gaining popularity. The ruling class’ penchant for luxury goods is often exposed to the state media. What do general citizens think of the economic and social polarization they witness? 

When watching rich people eating well and using flashy and expensive products on TV, many could feel a sense of detachment from what’s going on. North Koreans do not go as far as to voice their complaints in public yet. But some are said to share their feelings with like-minded people. 

Markets have expanded in North Korea since the Arduous March, stoking divides between the rich and the poor. The have-nots might have a grudge against the haves. If this trend continues for a long time, it will surely have a negative impact on the North Korean regime.

North Korea is facing its worst food crisis this year. Some 240 North Koreans starved to death from January to July. In contrast to the miserable lives of residents enduring food shortages, North Korea’s ruling class has grown so fond of luxury goods. This is a typical example of a huge gap between the general public and the powerful, wealthy class in the country. 

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