Joke of the day

Two men are talking on a Pyongyang subway train:

“How are you, comrade?”

“Fine, how are you doing?”

“Comrade, by any chance, do you work for the Central Committee of the Workers’ Party?”

“No, I don’t.”

“Have you worked for the Central Committee before?”

“No, I haven’t.”

“Then, are any of your family members working for the Central Committee?”

“Nope.”

“Then, get away from me! You’re standing on my foot!”

…

There’s more along the same lines at the link, via MR.

Financial sector reform: The North Korean (non-)experience

Financial sector reform is critical to achieving sustained economic growth. Park (2003) presents a comprehensive review of the North Korean financial system. The system is based on the same monobank system of the former Soviet Union and Chinese economies in which central bank and noncentral bank functions are controlled by the central bank. In North Korea the central bank is responsible for issuing notes, maintaining the payments system, maintaining the foreign exchange rate system, accepting deposits, making industrial loans, and providing insurance. Monobank systems are based on the supremacy of the production plan in which finance is merely used to bridge gaps between receipts and expenditures and financing is not predicated on credit evaluation or monitoring. Hence, there is no need for institutions separate from the central bank to accept deposits and make loans.

…

A banking sector separate from the central bank is required to evaluate creditworthiness, monitor performance, and impose financial penalties to achieve a rational allocation of the nation’s savings. The banking sector needs to be able to evaluate the creditworthiness not just of individual firms, but of specific projects. The banking sector needs to be able to enforce repayment of loans, not just to give managers incentive to invest wisely but also because this acts as a selection mechanism for better productive arrangements and superior technologies. Unless they are willing to shut down inefficient firms that cannot repay their bank loans without government support, then any reforms will still ultimately lead to the accumulation of inefficient firms and outdated methods of production and rising nonperforming loan problems.

…

From this paper. Of course we all know the Western world works differently. It’s only in North Korea total government control of the financial industry causes problems.

North Korea has a drug problem

This is news to me, even if some of you probably knew about it already. A long article with lots of interesting links is available here.

Clips from North Korea

The guys from VBS have been to North Korea. They made 14 videoclips, all of which are available here. Highly recommended, this is probably the best piece on NK I have ever seen.

I know that when posting links only a tiny fraction of the readers actually follow them. In this case I can only say: Please, do click the link to the VBS-series. The only reason why I have not uploaded some of the clips here on the site, which I know would result in far more views than a link on its own, is because I have no idea how to do it (the format is not youtube or googlevid). If you have to limit yourself to one clip I recommend part 5, but of course you don’t and the whole series doesn’t last not much more than an hour, maybe an hour and a half.

HT: Samizdata.