American dollars have permeated every nook and corner of North Koreans' life. Dollars command better treatment than the local won currency not only at foreign goods stores, but also in the marketplace. Quality goods are mostly foreign-made and imported items are priced in dollars. Even countryside village households possess a few dollar notes.

Initially the North banned the possession of dollars. Local notes exchanged for foreign currencies like the dollar and yen emerged as late around the late 1970s. Ordinary citizens encountered no inconveniencies in daily life in using only local coins and notes. It was in the mid-1980s that American dollars and other foreign currencies began to expel the local currency. Faced with serious economic woes, North Korean authorities aggressively urged the residents to contact and solicit their relatives living in Japan, the United States and other foreign countries to remit to them foreign currencies. Dollars flowing into the North through such endeavors began to shake Pyongyang's commonsense notion of the currency. A US$100 note has a value exceeding a worker's wages saved for a decade without spending a penny. When the North's economy hit bottom, according to research, a North Korean worker's monthly wage was equivalent to about 50 cents.

The 1989 Pyongyang World Youth and Student Festival paved the way for the inflow of dollars in quantity. The event brought about the emergence of a number of foreign goods stores, where the local currency is of no use, and an all-out foreign exchange earning war was waged. It's not an exaggeration to say that the entire population, in an attempt to earn foreign exchange, started engaging in side jobs on top of their routine occupations. Citizens furnishing mushrooms or crabs are paid in dollars.

The mighty strength of the dollar has resulted in rampant forgery with good quality US$100 counterfeit notes, said to fetch between US$70 to US$80 in actual currency. Pyongyang has reportedly discontinued the circulation of notes exchanged for foreign currencies in the Raju-Sonbong free trade zone, and permitted foreigners residing in Pyongyang including foreign diplomats to use foreign currencies. Thus the use of foreign currency exchange in North Korea appears to be being legalized.

(Kim Mi Young, miyoung@chosun.com )