Trading firms are mushrooming in North Korea as the realistic need for public institutions, including the party headquarters and the cabinet, to raise funds on their own has brought about a boom of setting up foreign-exchange-earning trading firms. Business establishments, large and small, have established trading arms that are engaged in exploring foreign markets, while some individuals form ghost-trading companies by borrowing the names of provincial agencies. As a result, trading firms now number in the hundreds in the North.

Unlike ordinary plants and business establishments, the chief executives of which are called 'director,' trading firms use the job titles of president and vice president. Their staff work quite hard, aspiring to get commissions and outstanding staff members receive color TV sets or other expensive goods as bonuses. Trading firms compete with each other severely, an aspect filled with the scent of capitalism.

The competition between trading entities arises from struggles to secure exportable items. Trading firms of clout like Taesong Trading Co., under the jurisdiction of the central party's Office No. 39 which manages Kim Jong Il's ruling funds, and the Kumgang Trading Co., a subsidiary of the Mount Kumsu Memorial Palace's financial department, are able to collect export items on a monopoly basis. Small trading companies, however, find it extremely difficult to secure 'sellable items.'

The task of securing export items is assumed by trading companies' 'resources mobilization sections.' Once they are secured through their provincial branches, 'transport and storage sections' take care of the transportation, storage and processing of export goods, while 'export sections' deal with exporting matters such as shipping and settlements. They also have 'import sections,' where, in general, goods requested by manufacturers were imported from abroad and supplied to at cost, recalls Kim Dong-jun, 48, a North Korean defector to the South who served as an export-import section chief in the North. "Favorable clients could be secured if Japanese-made daily necessaries were supplied," he added.

It's unavoidable for North Korea, which lacks exportable products, to collect and export all available natural products such as mushrooms, fish, shellfish and minerals. "Japanese traders are very specific about North Korean products they want to purchase," adds Kim. "For example, a Japanese import firm placed an order for common ice-fish living in the downstream of the Dokji River flowing between Kangwon and Hamgyong provinces."

Though little dividends go to producers, trading firms' executives and staff earn good money. Because trading activities are exposed to corruption as shown by the prevailing remarks "foreign-exchange earning is equivalent to earning imprisonment." The slightest flaw found in the tight network of mutual benefits between traders and the police, or the state security agency deals fatal blows to trading people. Trading firms' staff members are still the envy of others. It goes without saying that they don't take entitlement examinations, but are posted by seniors.

Prior to the collapse of the socialism, North Korea conducted barter trade with friendly countries, based on strict "plans" issued by its Trade Ministry. With such barter trade gone with the sudden fall of Communism, and as it became impossible to import any goods without hard currencies such as the American dollar, or Japanese yen, North Korea, under the slogan of trade-first policy, mobilized its entire population for foreign exchange earning, bringing about the flourishing of trading companies. College students majoring in economics study trade norms and regulations adopted by capitalist countries.

Recently letters of credit have been allowed and accounts are settled at the Korea Trade Bank or joint financial institutions with foreign concerns, but no small quantity of illegal trading transactions take place. The expansion of marketplaces and the emergence of trading firms, large and small, in North Korea appear to represent the new economic realities of the North in the post-rationing era.

(Kim Mi-young, miyoung@chosun.com )