The purpose of this research is to analyze the formation and development of North Korea's housing market based on the Apartment construciton and sales as the part of the country's market place. In common with other countries, food and shelter is the b...
The purpose of this research is to analyze the formation and development of North Korea's housing market based on the Apartment construciton and sales as the part of the country's market place. In common with other countries, food and shelter is the basic problem of North Koreans. Especially for the housing problem, it started to cause the diverse forms and the phenomena of housing transaction as the government failed to deal with the problem appropriately since 1990's economic crisis. It sometimes happened that North Koreans secretely exchanged the house owned by the public. However, after economic crisis, the private investors frequently used to conduct housing construction and sales as well as the individual transaction between the residents that caused the formation and development of housing market in North Korea. Even though the housing construciton and sales by private investors are illegal, but the authorities, in fact, are conniving the expedient as they couldn't sovle the housing shortage. There are 'Donju; a new rich group' in North Korea's market palce and on the profitable spot as private investor. They are using the critical situation of the authorities' limitation that couldn't solve the house shortage problem for their aggressive investigation to the housing construction and trade. Standing on the authorities as a matter of form, 'Donju' are carving out a niche market in a number of different ways for earning their profit and increasing the housing market. The reason of the occurrence of housing transaction and the construction by private investors, especially for Apartment construcition, is that the weakened national finance by the collapse of planned economy, the virtuous circle of marketisation occurring by principle of supply and demand, and the intention of income creation between the residents in housing sales. North korea's apartment construction is operating in collusion with the authorities and private investors.
The government provide the system such as building program, land and design acceptance, but they have not been secure the construction expenses like materials and labor costs due to poor national finance. The private investors are bearing such an expenses. It is possible to deal with daily necessity like food, clothes, even the home appliances, machin component and vehicle if they have the money in North Korean market.
The cement and steel product has been traded back and forth market place. It means the construction materials should be supplied the government, but handled by the private investors and completed apartment has been traded illegaly by US currency. So is the lotting-out process after permitting for building completion.
The apartment is allocated as per the amount of investment for the construction through the closed parceling-out and priority has been given to bureaucrat and public officals who have cooperated on the construction. It is promoted on everyone's tongue and price has been fixed with consumers. Suppliers deal with consumers by securing the certificate of house using permit from the authorities, giving a bribe for them. Through the process as above, the private investors are to be have strong ties with power structure and have been activating the housing market by the various ways.
The private investors are accumulating of capital as well as offering the convenient living condition to power structure and wealthy merchant class through the apartment construction. The power strucrue and rich merchants are consealing the house as safe property and for pursuiting benefit through illegal trading under the unstable economic climate and political state.
The government, meanwhile, cannot help condoning the situation due to the fact that it somewhat relieve the resident's housing demand of which they couldn't solve and is considered the result of public relations through beutify city enviroment as the loyalty competition. However, the process is not always fair or easy. Growing of the consturction by the private investors, occurring of the damage in parallel compel the government to cope with the situation. For preventing the big accident such as hosue collapse and keeping up privatization, the governement is toughening up the law on housing and raising strenghth of punishment through confiscation for the full of illegality of apartment construction and sales. However, the measure of the authories is not making effectiveness.
The government is faced with dilemma of that they're hard to protect the marketize housing sales only through the punishment and limitation, they would be missed an opportunity to make good use of 'Donju' under conditions of the shortage of raw materials and public funds. For this reason, North Korean government policy shows simultaneously tolerating and restricting the apartment construction. This research is based on the depth interview for North Korean defectors and analyzing of North Korean literature materials. There are nothing for it but to limit for analyzing the role of private investors because it is unofficial ways to inject private funds to housing sales and construction in North Korea. Also because there are many testimonies by the defectors about the apartment constrction through the private investment and trading by US currency, but rare examples of 'Donju' refugee. Notwithstanding the above limitation, this research tries to confirm the formation, the process of development and the character of North Korea's housing market.
There is a high possibility that North Korea's housing market would be expanded, on the condition of present social economy and strong intention of ownership, unless the authorities' ability of public finace shall be improved.