As North Korea Continues to Boost its Imports, a Look at the Role of Luxury in the Hermit Kingdom

Image: Dior

As North Korea Continues to Boost its Imports, a Look at the Role of Luxury in the Hermit Kingdom

“Most North Koreans are too poor and too hungry to think much about clothing in what may be the most authoritarian, least accessible state on earth,” according to the New York Times. While roughly forty percent of the population in North Korea – or about 24 million people ...

February 26, 2019 - By TFL

As North Korea Continues to Boost its Imports, a Look at the Role of Luxury in the Hermit Kingdom

Image : Dior

Case Documentation

As North Korea Continues to Boost its Imports, a Look at the Role of Luxury in the Hermit Kingdom

“Most North Koreans are too poor and too hungry to think much about clothing in what may be the most authoritarian, least accessible state on earth,” according to the New York Times. While roughly forty percent of the population in North Korea – or about 24 million people – lives below the poverty line in the nation’s countryside and lacks proper medical care and medication, in Pyongyang, the capital of the Democratic People’s Republic of Korea, there is a vastly different picture of life, one that saw the country’s elite import $640 million worth of luxury goods in 2017, per Reuters.

Western luxury products – including leather goods and watches, as well as cars and upmarket electronics – made up almost 20 percent of North Korea’s total imports for 2016, the Korea Herald revealed last year, with imports of high-end watches seeing the biggest increase from the year prior, up by nearly 50 percent, followed by expensive cars and carpets.

World powers, including the United Nations (“UN”), “have pursued economic and financial sanctions on North Korea for more than a dozen years to pressure it to denuclearize,” the Council on Foreign Relations. Stringent and escalating UN sanctions, first implemented in May 1993, prohibit all 193 member states from directly or indirectly supplying North Korea with everything from aviation gasoline and “any item that they determine could support or enhance the operational capabilities of armed forces” to luxury goods, such as jewelry, yachts, luxury automobiles, luxury watches, recreational sports equipment, and certain porcelain or bone china tableware.

Despite such sanctions, luxury goods continue to make their way across the border into North Korea, with China serving as the nation’s most well-established and largest trading partner. Singapore-based traders have also been linked to a “substantial amount of” imports into North Korea in recent years, even though a spokesman for the country’s Ministry of Foreign Affairs told CNN, “Singapore takes its obligations under the UN Security Council Resolutions seriously, and is implementing them.”

Leading with Lavish Gifts

The Seoul-based Korea Herald asserts that “since the young dictator Kim Jong-un took over the regime in 2012, luxury item imports have continued to rise.” These imports have included everything from cars and jewelry to Kim Jong-un’s £4.5 million ($6 million) 95-foot yacht from British manufacturer, Princess Yachts, which has vehemently denied any knowledge of or dealings with the yacht in question and Jong-un.

While no shortage of the $3.36 billion in luxury goods that have been imported into North Korea in the five years that Kim Jong-un has been in power can be directly tied to the 33-year old ruler, and his extravagant lifestyle, they also consist of “gifts.” Rep. Yoon Sang-Hyun, a member of the Liberty Party in South Korea, said in a statement earlier this month that many of these luxury imports have likely been used by Jong-un “to ease discontent [in the nation] and encourage a celebratory atmosphere among the privileged by giving out presents.”

Moreover, as The Telegraph reported, “There have been reports of dissent within sections of elite concerned at the youth and inexperience of their new leader. Cars, pets and perfume are apparently bribes designed to quash any rumblings of discontent.”

This practice of gifting is firmly in line with a report from The Diplomat, which stated that in 2010, Kim Jong-il – who was said to have kept roughly 20 percent of the nation’s budget for himself while in power – expended significant resources on the military, and his fellow elite, while the economy withered and individuals starved.

For instance, on one occasion, as part of a larger lavish gift-giving spree, Jong-il reportedly gave is high-ranking officials 160 Mercedes-Benz cars.

Yet, Kim Jong-un is said to consistently exceed his late father’s spending. According to a report from the UN, North Korea’s imports of luxury goods in 2012 under Jong-un’s watch amounted to $645.8 million, a sharp increase from the average of around $300 million per year under Jong-il. The Telegraph similarly revealed in 2013 that “Kim [Jong-un] is spending more than his father on senior members of the party and the military, as he attempts to build his own power base from which to run the country.”

Rep. Yoon “stressed that actual imports [under the Kim Jun-un regime] are likely to be much more than recorded by official statistics due to illegal trade and smuggling.”

Luxury in the Capital City

Despite the jarring inequality between the richest and poorest classes of individuals living in the secretive world of North Korea – with its strict dress codes, which ban Western clothing, such as jeans, and require residents to abide by strict regime-approved hairstyles, which must be chosen from a state-sanctioned list of styles – a taste for luxury is creeping into the upper-most echelon of the population in Pyongyang, “where there is clearly money to spend,” according to the Times.

This is being caused, at least in part, by individuals’ increasing access to information from the outside world. As the New Yorker’s Evan Osnos reported last month, in the face of threats from Jong-un and the North Korean government, the latter of which warned that people caught with illegal videos could face ten years of hard labor, “North Koreans [particularly the elites] have had some exposure to Chinese, American, and South Korean entertainment, smuggled over the border on SD cards that are small enough to be inserted into a phone.”

This inflow of information, particularly in the form of media that falls outside of the state-controlled media, has made it so that at least some regions in North Korea – which has been coined “the Hermit Kingdom” – are “no longer hermetically sealed,” according to New York Times columnist Nick Kristof, who recently returned from Pyongyang.

“Yet this is still North Korea,” he says. “I asked [some young school] kids if they had ever heard of Beyoncé or the Beatles; none had. I asked if they had heard of Facebook. One had, because computer software sometimes referred to it, but he didn’t know what it was.”

In addition to the growing – albeit illegal – availability of information from the outside world, the embrace of luxury amongst the wealthiest of the North Korean population can likely also be tied to Kim Jong-un and his rigorous efforts to enhance the lifestyle of his elite supporters, who, according to Michael Pembroke, author of, Korea: America’s First Failed War with China, “are the beneficiaries of a class system based on political loyalty and family history.”

“Many are relatives and descendants of [North Korea’s inaugural leader] Kim Il-sung’s original band of brothers – the men and women who accompanied him on his historic return to Korea from the Russian Far East in 1945,” he notes. “These people, their offspring and their extended connections now make up the ‘core class’ – the high-ranking military officers, Workers Party officials, senior bureaucrats, business leaders and diplomats, who prosper because of family background and personal affiliations.”

As distinct from the country’s poorest, the nation’s elite live in Pyongyang, which, according to Pembroke, “is not North Korea,” but instead, “a bubble of modern towers, state-of-the-art museums, science palaces, sporting venues, amusement parks and public gardens. Smiling school children are ever-present and mobile telephones are ubiquitous. There is even a dolphinarium and a spectacular new waterworld, not to mention a small number of coffee houses and nightclubs.”

There are brand new Audis on the streets. Civilians have cell phones, and women wear stylishly tailored clothing and high heels. Some carry designer logo-emblazoned handbags.

Osnos echoed this notion, writing: “On the streets of Pyongyang, there are flashes of modernity, even style. Some women can be seen wearing stilettos and short skirts, though these can be no higher than two inches above the knee, according to Workers’ Party regulations.”

The New York Times’ Carol Giacomo confirmed this budding sartorial interest, or as she put it, a certain “sartorial fresh air.” The “details of dressing that I saw, and of the life in general, reinforced suspicions that the desire for personal expression has not been totally snuffed out,” she wrote.

Some of the men, namely the senior Foreign Ministry officials, “would have easily blended into the crowd in New York. One wore a blue blazer and blue trousers with a white button-down shirt; another, a black and white checked jacket, black pants and a white shirt; the third, a black suit, white shirt and blue tie with white polka dots,” according to Giacomo, who is one of a handful of journalists that recently visited Pyongyang.

The Catch? You Have to Pay Cash

How – exactly – does this small, well to do sect of the North Korean population come into possession of such worldly wares? Well, as CNN revealed in July, following a year-long investigation by NK Pro, an independent North Korea monitoring group, the wealthiest North Korean consumers can get their hands on “premium blended whisky, jewelry and perfume” thanks to at least two luxury department stores in Pyongyang, which are open exclusively to the nation’s elite.

The catch, according to the news outlet? “The department stores [accept American] cash only. And the profits could go to an illegal nuclear weapons program.”

As for whether many North Koreans would find it problematic to know where this money is going (if they do not already know), that is unclear. As the Times’ Kristof discovered, many North Koreans, ranging from a 20-year-old university student to 38-year-old teacher to a senior ministry official are mentally prepared for war with the U.S. And undoubtedly informed by daily state-mandate propaganda, “every single person we spoke to,” wrote Kristoff, is confident that if a war does break out, “America will end up in ashes and the Kim regime will emerge victorious.”

Kim Kwang Jin, a Singapore-based defector from North Korea, who has helped finance illicit imports into North Korea, told CNN that such outposts are permitted, as they enable the  regime to “earn a lot of cash, which they re-allocate into their priorities, like the nuclear and missile program.”

The authenticity of these luxury products is nothing if not questionable. Montblanc products, for example, recently filled shelves at one of the Pyongyang department stores, and consumers were expected to paid close to the brand’s suggested retail price for them. Yet, Montblanc’s parent company, Richemont, told CNN that it does not trade in sanctioned countries nor does it sell in North Korea. However, just because the products ended up in North Korea by way of the gray market, or unauthorized distribution channels, does not necessarily mean that they are counterfeits.

“The imports could be linked to unauthorized channel activities and/or involve counterfeited and/or second-hand products,” a spokesman for the Switzerland-based luxury goods group said.

Domestic Industry & a Market for Knockoffs

In addition to the demand for authentic – or seemingly authentic – luxury goods amongst the small percentage of upper class individuals in North Korea, this group has also spawned an emerging market for knockoffs. As Radio Free Asia (“RFA”) noted in 2013, “Tailors in North Korea are producing knockoff designer clothing to cater to Pyonygyang elites inspired by the fashions of First Lady Ri Sol-ju [wife of Kim Jong-un], who has displayed a penchant for luxury brands and been photographed in chic outfits, sources in the country said.”

The publication went on to note, “Known for sporting high heels, sparkly broaches, and foreign designer wear, the celebrity wife has blazed a new fashion trail in an impoverished country where most are relegated to a Spartan communist dress code of sharp haircuts and patriotic pins.” It is unclear how, exactly, Sol-ju has access to such designer garments and accessories, including Christian Dior bags, in light of UN sanctions.

What is not such a murky proposition: There is a developing interest in dress, at least amongst those who have the luxury of entertaining such pursuits, even if they are forced to rely on knockoffs due to the lack of availability of the real thing due to UN sanctions.

Giacomo says increased attention to apparel and accessories “is often attributed to [Kim Jong-un], who isn’t much of a fashion plate himself but has reportedly expanded the importing of luxury goods after coming to power in 2012,” as well as to his wife “who has a fondness for tailored form-fitting dresses, [and] is seen as something of a style icon.”

Interested in bolstering domestic industry, Jong-un has been flooding North Korean factories with Western products, including skincare and beauty products, as well as sportswear, providing the factories  with exactly the types of products he wants to see, and following in the footsteps of his father, who called on North Korean workers to produce more cosmetics of “good quality with world competitive power” in the early 2000’s.

North Koreans have also taken to “copying what South Koreans wear,” according to RFA, as influenced, certainly, by smuggled media. “At one department store in Pyongyang, for instance, a pair of shoes were displayed and sold for as much as $120 since they were a copy of top South Korean TV star Tae Hee Kim’s.”

Reports from various media outlets confirm that markets in the capital “are flooded with imitations of luxury fashion brands’ products.” Per RFA, “Tailors copy designs of imported luxury clothes, and the fakes are sold openly in Pyongyang’s markets and department stores.” Some of the products are manufactured in North Korea; Namp’o, a city and seaport in South Pyongan Province, North Korea, has become known “as the best place for producing the highest quality fake goods nationally,” one Pyongyang resident familiar with the clothing business told RFA.

An array of counterfeit goods also comes from “bordering China, [which] whether sanctioned or black market, has seen an influx of goods flowing into North Korea,” per London-based fashion site, Dazed & Confused. China is the world’s capital for counterfeit goods, after all.

With that in mind, both garments and accessories complete with fake Prada, Dior, and Chanel labels, for instance, sewn into them, are becoming somewhat readily available – and sought after – in North Korea’s capital.

This is because, logos do matter in North Korea – apparently. As Troy Collings, who has spent several years at a travel company specializing in tours of North Korea, told Dazed in 2015, North Koreans “want to be trendy.” In Pyongyang, individuals “care about brands. They all know. I remember one (local) guide asking me to buy some foldable Ray Bans.”

As for accessories, themselves, there is one that is not merely optional for North Koreans: Pins adorned with a portrait of either Kim Il Sung, North Korea’s founder, his son Kim Jong-il, or both. All adults are required to wear one of these pins, in plain view. Interestingly enough, and not unlike the market Chanel bags, there is a ripe counterfeit trade for the pins, as well.

* This article was initially published on October 25, 2017. 

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