SEOUL – In North Korea’s capital, the main waterfront property has remained untouched for decades. It was once a site for an American missionary school. Then, it briefly became a residence for the country’s founder, Kim Il Sung.
Now it is Pyongyang’s hottest real estate development site. The modern apartment block is a cog in Kim Jong Un’s national strategy to project force amid economic conflict, sanctions and pandemic lockdowns.
North Korea has few leverage to pull in the pursuit of economic revitalization without negotiating with the United States. This forces Mr. Kim to prioritize national projects that showcase the regime’s self-image as the largest country in the world.
The housing estate in central Pyongyang will include dozens of low-rise buildings and a total of 800 apartments when completed. Mr. Kim has visited twice in recent weeks. The houses will be “gifts for workers,” according to North Korean state media, reserved for professionals such as scientists, educators and writers.
The modern apartments are the most lavish elements of a larger five-year campaign to increase the number of homes in Pyongyang by 50,000 units, and even more in a country experiencing severe housing shortages. Mr Kim could also use a flashy project to brag, after admitting economic shortcomings and calls for more self-sacrifice.
The former homes of North Korean rulers are seen as historic sites that must be preserved, said Lee Chul, a former senior Pyongyang official who now lives in South Korea.
So, Mr. Lee added, demolishing the site of Mr. Kim’s grandfather’s one-stop-house sends a powerful message to its citizens: “It puts people first.” Mr Lee said it also shows Mr Kim’s preference for pragmatism over ideology.
At a rare meeting of the Workers’ Party Congress in January, Mr Kim issued bold, albeit vague, corrections for an economy that had just experienced its worst year in a generation. The next five years will include radical development, Kim said in a recent letter to young members of the ruling party, pledging to create a “prosperous socialist country in which everyone enjoys happiness.”
In many ways, the economics can only go up. Cross-border trade with China, the Kim regime’s biggest trading partner and benefactor, fell sharply last year when North Korea closed its borders. Bilateral trade in March topped $ 10 million for the first time in six months, according to the Seoul-based Korea International Trade Association, although this is only a tiny fraction of pre-existing levels. sanctions. This year, Pyongyang’s economy is expected to grow 0.5%, according to Fitch Solutions, after falling at least 8.5% in 2020.
It is not unusual in times of national crisis for North Korea to look to large-scale construction projects to stabilize morale and keep the economy busy. Even amid the sanctions, Mr. Kim oversaw the construction of a ski resort, two tourist areas, two large hospitals, and the modernization of Pyongyang’s street lights.
But for Mr. Kim’s new five-year recovery plan, the latest housing frenzy is a concrete policy that is rare to see the light of day.
“It’s Kim Jong Un trying to prove to North Koreans that he can still deliver a feat of engineering despite sanctions and the coronavirus,” said Kim Byung-yeon of Seoul National University, an expert the economy of the Kim regime. “The new modern apartments will be tangible proof for these people that the regime remains strong.”
Home building has been a political and economic winner through three generations of Kim rulers. Kim Il Sung built more than four million homes during his four-decade reign, an average of around 100,000 a year, according to Choi Sang-hee, a researcher at the Land and Housing Institute, a South Korean state-owned company. She used state media ads for the paintings.
At the time, the government was distributing almost all the homes to people for little or no cost, say defectors and other North Korean economic experts. Under Kim Jong Il, the father of the current dictator who ruled from 1994 to 2011, North Korea aimed to build around 30,000 houses a year on average, according to research by Ms. Choi.
An informal real estate market, with buyers and sellers, only emerged in the 1990s during the country’s widespread famine. Desperate North Koreans have started putting their homes up for sale to buy food, researchers say. The regime still does not recognize homeownership, these researchers say, although it also does not seek such transactions to block.
Kim Jong Un built fewer houses, around 20,000 a year, Ms. Choi said. For wealthy people, whose numbers increased dramatically in the first half of the 2010s, before the sanctions kicked in, homeownership has become an attractive investment, with prices rising steadily, according to testimony from ‘a defector.
North Korea remains one of the poorest countries in the world, with a per capita income of less than $ 1,300 per household.
A medium-sized house in Pyongyang costs $ 30,000 to $ 50,000, according to a February report on house prices in North Korea by Lim Song, a defector who works as an economist at Seoul’s central bank. For the report, Mr Lim cited testimonials from defectors and more than 30 previous studies on North Korean real estate, international finance and geopolitics.
Pyongyang state media often boast that it has enough housing for the country’s population of around 25 million. But according to Mr Lim’s research, the housing supply is 60-80% of what is needed, with extended families living together or renting rooms to strangers.
Recent satellite images have shown the luxury apartments along the Pothong River. The site is near the headquarters of the Workers’ Party of Korea, Kim Il Sung Square and the National Assembly building. The cluster of apartment buildings appear to be 15 stories tall, some with terraces, according to state media images and analysis from 38 North, a website focused on North Korea..
Before recent construction, the site was one of the few relics of American life left in Pyongyang. He housed the Pyeng Yang Foreign School, run by American missionaries until 1940. More than 500 Americans studied there once.
The group includes the parents and two uncles of William Brown, an expert in North Korean economics and a board member of the Korea Economic Institute, a Washington-based think tank. Mr Brown doesn’t blame North Korea for bulldozing the old school grounds, though he is disappointed to see the story destroyed.
“The sadness is that the North Koreans didn’t know the Americans were there,” Brown said.
Write to Andrew Jeong at [email protected]
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