Yi Quan - Mr Felix Abt, I have finished reading your book, It was...

(2) Yi Quan - Mr Felix Abt, I have finished reading your book, It was...




Yi Quan
25 March 2015 ·



Mr Felix Abt, I have finished reading your book, It was a pleasant read and it has answered most of my questions in mind about North Korea. But there are still few doubts i have in mind need to be cleared.

My first question is, did Pyongsu really make money? or is it more like a company with goodwill trying to provide the affordable medicines to North Koreans? Because from the book, it seems that Pyongsu barely managed to cover the cost most of the time.

Second question is that, Is there really markets inside North Korea for the moment? I understand that where there are people, there are markets, but sometimes, even if there is demand, if people can't afford to buy, then there won't be suppliers to sell. and if there is no supplier, it doesn't meet the criteria of forming a complete market. The book has mentioned that black market exists in the country, but that's not the kind of market that most foreign investors are interested and targeting when they enter the country.

Last question, what is the average cost of living in the country? I know there are some western restaurants and funfairs in the country, but can most people afford to eat in those restaurants and enjoy those funfair facilities? Because i see tourists saying things are not cheap in North Korea, if even the foreigners find it expensive, how are the locals going to afford the food and services? Or the price is different for tourists and the locals?

Hope you can help me clarify these doubts. Thank you.




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7Vũ Nam Phương and 6 others
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Vũ Nam Phương I know the price is different for tourists and the locals in DPRK
25 March 2015 at 21:42 ·
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Felix Abt Thanks a lot, Yi Quan, for your feedback, I appreciate it very much. And I wouldn’t mind if you published it on Amazon :-)
Great questions, which I’m trying to answer as follows:

1. During my last year as CEO at PyongSu, we achieved the goal of making a profit and having everything in place for a sustainable profitability. Indeed, from then on the company has made a profit every year, albeit not huge. Currently profits are re-invested in the company’s expansion. I’m also a shareholder at other joint ventures in NK, they also achieve a modest profitability. I respect the will of my co-shareholders (foreign and North Korean) not to be more specific. Also, when you’re investor in a country like North Korea you don’t expect a quick buck, you’re there for the longer term.

2. Markets: As a manufacturer and as a trader I used to negotiate prices with local companies. With few exceptions, there were no government-administered prices, but prices were defined by market forces. Example: For packaging material of pharmaceuticals we asked Chinese companies for price offers (China has a very competitive packaging industry). Thereafter we asked domestic packaging manufacturers to give us price offers that needed to compete with the Chinese and we accepted the lowest offer from North Korean companies. Before we started opening our own pharmacies we studied the prices of imported and locally made pharmaceuticals in shops and markets and defined a pricing strategy accordingly. We were free to set our own sales prices. As you can see, there has been a functioning market for years.
Of course, one can debate how to define markets: are they official, grey or black? I don’t think one can clearly distinguish different types of markets, since things are evolving quite quickly.

3. Living cost: Phương Nam Vũ mentioned correctly that there are different prices for North Koreans and foreigners as it has been the case in Vietnam until the late eighties when visitors from capitalist countries had to pay the highest prices (which were then perceived as very high like in today’s North Korea), visitors from socialist countries had to pay a lower price and Vietnamese paid the lowest price. As then in Vietnam, this pricing system is meant to subsidize lower prices for the local population. 

Can ordinary North Koreans afford to go to restaurants and do their shopping in fancy shops? 

The vast majority will buy food in markets and prepare their meals at home, but over the years you could observe more people eating in a growing number of restaurants and I’d expect that this trend will continue in the foreseeable future.

26 March 2015 at 01:20 ·
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Yi Quan Thank you very much for the answer Mr Felix Abt, I really get to know more about North Korea through your book. I will write the book review in Amazon. :)
26 March 2015 at 01:32 ·
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Vũ Nam Phương thanks Felix Abt, I understand, now the DPRK is similar to Vietnam in the 80-90s
26 March 2015 at 01:36 ·
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Vũ Nam Phương Mr Felix Abt. I have a question, expect you to answer, thank you
How to determine the exchange rate between KPW and USD, Euro and the current exchange rate is how many with foreigners and locals.

foreigners 1 USD = ??? KPW
locals 1 USD = ??? KPW

I know a monthly salary of a professor is 7,000 KPW in DPRK
26 March 2015 at 01:57 · Edited ·
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Felix Abt I’m not updated on the exact, latest official exchange rates, Phương Nam Vũ. It is the same for both foreigners and North Koreans.
But official exchange rates have become less and less important over the years. Low-end goods and services are now increasingly priced and sold according to grey or black market rates, only transactions at more expensive shops are priced at the official rate, but often carried out in dollars or yuan.
While the government defines the multiple times higher official currency rate, grey or black market rates, which are now tolerated by the authorities, are defined by larger currency traders in cities.
26 March 2015 at 02:17 ·
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Cameron Ryan 1 USD = 134 KPW
27 March 2015 at 06:59 ·
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