This article was originally published by Radio Free Asia and is reprinted with permission.
Authorities in North Korea recently arrested two people who were caught using fake money in local markets, turning to crude counterfeiting to cope with worsening economic conditions amid the prolonged coronavirus pandemic, sources in the country told RFA.
The coronavirus outbreak added to the economic squeeze of U.S. and UN sanctions aimed at depriving Pyongyang of cash and resources for its nuclear and missile programs. The closure of the Sino-Korean border in January and the suspension of trade with China has made it harder for North Koreans to rely on the country’s nascent market economy to support themselves.
Now with food prices skyrocketing and no way to make money by trading smuggled goods from China, many citizens are resorting to small-time counterfeiting to make ends meet.
The North Korean won has an official exchange rate of about 900 to the U.S. dollar, but it is actually worth much less. The black market exchange rate for the currency is about 8,300 won per dollar.
Sources told RFA’s Korean Service that both counterfeiters were faking 5,000 won ($0.60) notes to buy items needed for survival.
The price of a kilogram (2.2 pounds) of rice in North Korea was about 4,500 won ($0.54) on Sept. 2, according to the Seoul-based Daily NK news website.
“Not long ago, a man was caught using fake money at a local marketplace in Songchon county,” a resident of South Pyongan province, just north of the capital, told RFA on Monday.
“After receiving reports that counterfeit money was circulating in the market over the past few months, the market manager and a plainclothes police officer patrolled the market every day. They caught the man in the act,” said the source, who requested anonymity for security reasons.
The source said that the counterfeiter was in his 30s and was working as a computer printing technician for a local publishing company.
“Unable to make ends meet due to the coronavirus, he resorted to printing 5,000 won notes with a computer and printer normally used to print liquor trademark labels. With the fake money, he bought food and other groceries,” the source said.
“So far, the man illegally printed 30 counterfeit bills, 15 of which were found to have been used in restaurants and at the local marketplace. The motive for this man’s counterfeiting crime is to make a living for his family,” said the source.
The source said that according to North Korean penal codes, counterfeiters who make or use fake money could face more than five years in a correctional labor camp, adding that a five-year stint was likely for the man who passed bills in the Songchon county marketplace.
The second counterfeiter was caught in North Pyongan province, bordering China in the country’s northwest.
“A woman in Uiju county was arrested by law enforcement for changing the ‘1,000’ on 1,000 won [$0.12] notes to read ‘5,000’ won,” a resident of North Hamgyong, who requested anonymity to speak freely told RFA.
“The woman used this fake value money at nighttime, when it is dark, to buy rice or vegetables from elderly merchants in the markets,” the second source said.
The source said the woman had been employed as a bundle merchant—one who either buys smuggled Chinese goods close to the border and sells them farther inland at higher prices, or who smuggles the goods herself.
“Once the coronavirus situation was declared a major emergency and the movement of residents was blocked, she was unable to make money. She was in a desperate situation, unable to buy food, so she used colored pencils and a ballpoint pen to change the value of the 1,000 won notes to 5,000,” the second source said.
The second source said the woman, a mother of two, was put in prison for her crime.
“Her children are alone now and wandering the streets. They are now in a situation where they will have to commit crimes to survive,” the second source said.
“The authorities continue to crack down on residents having a hard time making a living because of the prolonged coronavirus crisis, even first-time offenders who take to counterfeiting. But if they do nothing to solve the food shortages, those who can’t make a living will resort to crime no matter how strong judicial control becomes.”
The North Korean government has been known to forge foreign currency on a massive scale. For decades under a sophisticated counterfeiting program, Pyongyang printed almost perfect $100 bills which U.S. officials classified as “supernotes.”
Experts believe that North Korea at times printed $25 million in supernotes per year since the 1970s, but after a string of arrests in the mid 2000s crimes involving the notes sharply decreased.
But in 2017, AFP reported that a new supernote had been found by forgery experts in Seoul, who suspected that the notes were North Korean in origin.