“Choco Pies from South Korea, a longtime favorite in North Korea, cost 50 cents in markets there. Chinese Choco pies also are frequently sold in markets in areas near the border. In 2011, they became so ubiquitous in the Kaesong Industrial Complex (which houses 123 South Korean-owned companies) that they spurred a government crackdown.

South Korean companies gave their North Korean employees as many as 10 Choco Pies a day to snack on. Such largess, however, put the employees in a position to sell the snacks to wholesale marketers outside the complex.

“If sold at 10 cents apiece, Kaesong workers with a generous allowance of 10 Choco Pies a day could reap up to $25 a month if they sold all of their snacks. Based on the market exchange rate, that totals to about 75,000 North Korean won. Although Kaesong worker monthly salaries range from $40 to $60, the government exchange rate gives them 4,000 to 6,000 North Korean won, or some 12 to 19 times less than the market rate.

“It is not an overstatement to say that their income focus is on Choco Pies, not their official wages. Consequently, the governing committee of the industrial complex was told to set a standard allowance of Choco Pies.”

SERI Quarterly, April 2012.

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