Kim Ji-hwan (alias), a North Korean defector in the South who fled in the 1990s ran a "private business" in the North, catching crabs in the West (Yellow) Sea and selling them to Chinese merchants while still at sea. Since owning the means of production is banned by law in the North, he rented fishing boats from maritime offices under the name of the military security command, the Ministry of People's Security (the police) or corporations with which they were registered.

Annual rent for a tug and a barge towed by the former, needed for crab fishing, ranged from NKW70,000 and NKW130,000, said Kim. Recruiting 180-200 crab-catching laborers working aboard the barge and securing the required fuel and foodstuffs, he launched crab fishing on March 20 each year. He was able to recover his investment from three months of fishing operations, making two rounds a month. After paying 30% of his proceeds each to his employees and the public agency or corporation under whose name he borrowed the boats, and 10% to the customs, he earned the remaining 30%, reaching between NKW200,000 and NKW300,000 per annum on the average. Compared to an ordinary laborer's monthly wage of NKW100, the sum is quite exorbitant. About half of the 500 to 600 crab fishing boats operating off the North's west coasts, according to Kim, are such rented vessels.

North Korea is said to have quite a few "private businessmen" who, like Kim, accumulate wealth by renting state-owned production means. Although such private business is legally banned in the North, Pyongyang in fact has reportedly permitted it tacitly since the 1990s. Having been kept by the economic plight from supplying agencies involved with the funds, fuel and parts, etc. needed for repair and maintenance, as well as operation of the boats, the state appears to have concluded it better to let people making money operate the vessels by permitting them to be rented from corporations and agencies.

Transport business establishments owning land transportation means such as trucks are also said to have been renting their trucks to private citizens since the 1990s. Here too businessmen rent trucks under the name of the organizations they belong to, paying 30% of the proceeds to both their employees and the organizations lending their names, and keeping the remainder for themselves.

Much more "private" in business form than those described above is to register oneself with a foreign-currency earning arm of a military establishment, among other agencies, to start with, purchasing trucks in the name of the unit, on the condition of paying a portion of the proceeds, and engaging in barter trade with China. "Those running such firms are called 'presidents' in North Korea," said Yi Myong-sub, another North Korean defector in the South who fled the North in 1999. Some of them own three to four cars, which they run as the occasion demands. These businessmen also employ North Koreans and pay them set monthly wages.

Wages for fishermen are paid in rice or flour immediately upon their return to ports. If a fishing boat successfully locates lots of crabs about 20km off the North's west coast, it can catch about 200kg of crabs in some two hours during ebb tide, which are bartered to Chinese fishing boats for rice or flour.

In marketplaces "private businessmen" exchange rice or flour into gold or US dollars, which they hide. Many of them live in independent houses, rather than apartments.

Areas where private businesses are active enjoy improved living standards. During the peak of the food crisis, the North's western coastal areas, where they are actively engaged in crab fishing, had much less starvation than other areas of the country.

(Lee Kyo-kwan, haedang@chosun.com )