North Korea’s Foreclosure Crisis (No, Really.)
I have to say, this came as a surprise to me:
He noted, “Since 2000, new kotjebi have been people who have gone to ruin and lost their homes to loan sharks. These days their numbers are drastically increasing, so the authorities cannot stand by indifferently.
According to one source, a Korean-Chinese loan shark called Cho Jung Cheol was recently caught by the PSA on suspicion of taking a total of seven houses from defaulters.
North Korean people usually offer their house as security on a loan. Cho lent money at 30% interest for two weeks to a month, and used gangsters to take houses from those who couldn’t pay.
Those who lose their houses in this way roam the streets with their family members, the family splits up, or sometimes they escape from North Korea. After 2005, this became a common social phenomenon. [Daily NK]
When the state’s supply doesn’t meet the people’s demand, eventually, someone will step in to fill the void.
Plenty of cheap lodging in the concentration camps, no doubt…
Do you have a good link to the nature of home “ownership” in North Korea? How are these people able to offer their house as security on a loan in the first place?
Echoing Kushibo’s doubts, I’m wondering, too, whether true home ownership exists for ordinary people in North Korea. Until the establishment of private property in China, housing was owned by the state and allocated to danwei work units, when then assigned them to workers and their families. I’m guessing a similar system remains in North Korea. Even now in China, most privately owned apartments and homes are built on land under long-term leases. Moreover, it seems like it would be extremely difficult for loan sharks to expel families from homes without city neighborhood or village officials becoming aware of it. I see from the article that the PSA did arrest one loan shark.
“…when then assigned…” = who then assigned
It’s not true ownership. You’ll have to buy Andrei Lankov’s book for the full story, but it works this way:
1. Officially, houses and property belong to the state.
2. The state’s tenants have the right to swap houses if the bureaucrats approve it. This has evolved into the functional equivalent of real estate trading and is fueled by bribery. Today in North Korea, you can get permission to do anything for a bribe. You can go into the real estate business if you can pay enough bribe money, and people who need some cash desperately can do so by “selling” their houses.
3. As a practical matter, the state exercises little control overolder houses, especially in rural areas.