Going native in the Hermit Kingdom

Only a tiny handful of foreigners have lived in North Korea as long as Mike Hay, an Anglo-French lawyer who spent 12 years in Pyongyang.

Unlike most diplomats and aid workers, Hay was not an inhabitant of Pyongyang’s Diplomatic Compound or of a long-stay hotel. He lived in a downtown apartment. “That is very, very unusual,” said a former NGO staffer who previously worked in Pyongyang. “You can count people like that on the fingers of one hand.”

This long-term, up-close-and-personal relationship with North Korea offered Hay insights few other Westerners can offer, as well as experiences that are at odds with the country’s widespread reputation as a beggared, roguish and abusive dictatorship.

Pyongyang rising

Life among the natives was no hardship, according to Hay. With the development of a market economy proceeding apace, efficiencies have evolved. In his early years in the city, Hay suffered electricity blackouts, lack of hot water, broken down and windowless buses being pushed by passengers, and the complete absence of taxis. All are now things of the past.

“The overall aspect of Pyongyang is unrecognizable even to somebody who was there perhaps five years ago,” he said. “There are high-rise buildings up the wazoo.”

New construction and a pastel apartment coloration scheme have massively upgraded esthetics. “It is absolutely a prettier city than Seoul now and the layout, with wide boulevards, makes it very user-friendly,” he said.

The former black markets – Hay estimates there are a dozen in the capital – are now vanilla, and “choc-a-bloc” with Chinese and Southeast Asian goods. Burgers and fries, pizzas and coffee shops are easily found, blackouts are virtually unknown and taxis are common.

With a nascent middle-class appearing, life in the North’s showcase capital has gotten downright luxurious. “There is now a clearly defined middle class with money to spend on white goods, LED flat-screen TVs and solar panels,” Hay said. These goods are no longer for sale only in the jangmadang, or private markets.

“There are gorgeous, luxury department stores with international brands – jewelry, cosmetics, perfumes, liquors – that are as good as any in South,” he said, noting that these show the failure of sanctions. “There is a plethora of high-end restaurants all over the city frequented by locals: Multi-floor multi-room, with imported wines, beers and cognacs, foreign and Korean food, and impeccable interior design.”

Broadband Internet – wired, not wireless – costs a steep US$700 per month (for Hay, but local colleagues were not allowed access). He used a locally made smartphone – “pretty basic, with SMS facilities and data transfer” – and a dedicated, foreigners-only line for international calls. Global credit cards are not accepted, but local electronic payment systems exist.

TV programming, which used to be drudgery, has improved. “They get international news and the educational quality of programming is surprisingly high,” Hay said. “There are lots of health documentaries, documentaries on history, world history and geography – Discovery Channel-type info.”

Pyongyang, once noted for its broad but silent boulevards, has, for the last five to six years, suffered traffic jams but one thing remains constant: the drone of propaganda loudspeakers. These, Hay says, “just become background.”

‘Hay of Korea’

Speaking to Hay, it is clear that he has forged a Lawrence of Arabia-type attachment to North Korea, one shared by the tiny number of Westerners who have really engaged with North Korea.

“The people are absolutely wonderful, from the people you pass in the street to people with whom you work on a daily basis,” he said. “Walking, or on my daily cycle along the Taedong River, I can’t remember the number of times I’d be called over by picnicking families to join them for an impromptu meal and song.”

Given the dire image North Korea suffers from, Hay admits going in with “low expectations” but was won over the by the “strong, irrepressible community spirit, and the kindness of the people when given a chance and when they feel comfortable in the presence of a foreigner.”

The collective spirit which animates the North, but which is long lost in the prosperous, industrialized South, is sometimes also noted by those rare South Koreans who travel to the North. Hay offers an example:

“When the Taedong River burst its banks several years ago there was mud everywhere and within hours, people – people of all types, jobs, ranks, age and sex – appeared and were rolling logs to roll the mud back into the river,” he recalled. “They had nothing but bare hands, empty sacks and long logs, but this was not a huge coordinated process – more a feel-good thing. There was no cracking of the whip, it was ‘Let’s all pitch in!’ like London in the Blitz.”

Hay’s social circle in Pyongyang comprised a small nucleus of foreign residents and local colleagues. Nightlife in Pyongyang is active with late-night restaurants and karaoke, though it is “by no means 24/7.” And as in South Korea, “There is a well-established drinking and singing culture, lots of emotion.”

There is also a robust sense of humor. “You can tell them jokes, translate them into Korean, and they laugh at the same things we do.”

Weekend activities included trips to the Pyongyang golf course, one of only two in the country. Hay calls it “excellent in terms of layout, with difficult holes, and service by the caddies. I have heard it is PGA level.”

While Hay could not comment on reports of reports of widespread rural malnutrition and destitution, he believes life is improving even outside the showpiece capital, in cities like Nampo and Wonsan. Wonsan, the site of a major new beach resort and Masiryung Ski Resort are the new playgrounds of the elite. “The bathroom alone was worth staying in, it beat any hotel I have been in in my 57 years of life,” Hay gushed about Masiryung. “The resort is gorgeous.”

And contrary to widespread belief, he was not constantly monitored by guides or followed by agents in Pyongyang, though he admits that on his trips, he was accompanied by local colleagues.

Taboos, sanctions, mysteries

In conversation, North Koreans expressed curiosity about Scotland and related current affairs, which are reported in local media, such as Scottish independence and Brexit. Other areas of curiosity were family, education and hobbies.

On international politics: “I was able to speak to them frankly to explain the behavior of foreign countries without necessarily stating my viewpoint,” Hay said. “I explained to them very frankly why countries were acting in such a manner toward the DPRK. “

Still, there are drawbacks. Discussions about the ruling Kim family are taboo. It is (literally) illegal for locals to marry foreigners, which makes relationships with the opposite sex problematic. “There is lots of serious bonding, but the rules of engagement are clear,” Hay said. “You are the foreigner, and there is only so far you can go.”

Unlike in Japan or South Korea, boisterous or drunken behavior is frowned upon. “It is a conservative society,” Hay admits. “The kind of ‘going wild on the town’ behavior which is so prevalent in cities worldwide is thoroughly unacceptable and is not to be forced upon North Koreans – women or men.”

He recalled hosting a South Korean in Pyongyang: “This guy was pushing me to dance with this girl, and I am telling him, ‘You are embarrassing me and her, and she will be criticized.’”

Good manners are essential. “Never ever show that you losing the respect you have for them, which means respect for their system and culture,” he advised.

Even to Hay, there remain some mysteries about North Korea. The working of the economy, which is believed (in the absence of domestic data) to run consecutive annual trade deficits with China is one. “We are talking trade, trade, trade,” he said. “Nobody has ever sat me down and explained to me the macro and micro-economics, or the fiscal aspects of the North Korea economy, to my satisfaction.”

He does, however, have strong opinions about international sanctions, which he calls – given the prosperity that is glaringly unmissable in Pyongyang – “the elephant in the room.”

“Sanctions, in and of themselves, do not work, and the sanctions are not having their intended effect” (that is, forcing North Korea to denuclearize), Hay said. “The tragedy [of the US approach] has been either a flawed policy or no policy whatsoever.… I am firmly of the opinion that further meaningful engagement is essential to the solution that so many countries wish to see.”

The moral question

Hay declines to predict whether the troubled courtship between Pyongyang and Washington will bear fruit. “I am a lawyer and business consultant and have rarely strayed into public comment on geopolitical issues,” he said. “Any businessman ignores geopolitics at his peril, but making predictions about Korea is about the most hazardous activity you could engage in.”

If sanctions are eased, North Korea presents a virgin market for virtually all global brands. But there are also local positives. Hay states “an exceptionally well educated, highly disciplined workforce” with “one of highest literacy rates in the world,” and recommends several local sectors that are investment worthy.

Mineral extraction – for coal, copper, rare earths, gold – is one. “They have the stuff in the ground but don’t have the equipment to get it out of the ground: there is the opportunity awaiting foreign investors,” he said, noting that there is some Chinese investment in place.

Agriculture is another field. “They are very big on the staple stuff, on maximizing output, getting a good return on harvest – fertilizers, GMOs, systems, processes materials.” Equipment for fisheries and the livestock industry are further possibilities.

In the garment sector, North Korean HR offers excellent skills in detail work, and processes on commission. “You supply the components, they put it together,” Hay said. “I have seen the rigorous quality control when it is shipped out of North Korea.”

While there is very, very limited internet access, North Korea boasts a thriving intranet. “The IT sector is absolutely – the key word in so many different ways – underestimated,” Hay said. “Everything from voice recognition software to putting together hardware components – they are developing their own tablets and smartphones – to development of software .”

And if the diplomatic engagement process implodes, he warns that no attack on North Korea will be a walkover. “The North Koreans have been underestimated in the military technological capabilities,” he said. “People have a surprise coming on their willingness and ability to fight: This will not be Iraq, where the Republication Guard collapsed and ran for the hills.”

But conflict cannot be ruled out. How does Hay, a man of the law, justify working with an abusive regime that oversees malnutrition and poverty while developing nuclear arms and suppressing such basic rights as free travel and free speech?

North Korea “has diplomatic relations with Britain, and numerous other credible countries have made a conscious decision to engage,” he said. “I have, with my eyes open, made the same conscious decision to engage.”

Next steps

Now in Seoul with legal firm HMP Law, Hay is bringing his knowledge to South Korea and to the world. He anticipates presenting locally, regionally and globally about North Korea for HMP.

HMP Law’s founding partner is delighted Hay is heading up his North Korea practice. “A lot of our clients are really interested about the North Korean situation,” said Judge Hwang Ju-myung. “They have seen South Korea in the past 50 years, and now see there may be a chance to enter North Korea once the market is open.”

Hay’s experience is unmatched by any South Korean lawyer. “A lot of firms think they have experts on North Korea, but I don’t think they do,” Hwang said. “We have the only one!” (Indeed. Some years ago, this writer attended a Seoul seminar on doing business in North Korea. The “expert” South Korean legal advisor on the panel was dumbfounded to hear an international law firm existed in North Korea.)

“Obviously the time [for firms to enter North Korea] has not arrived given sanctions, but there is a market for people who want to know when the doors do open, how to get in there,” added Dutchman Jacco Zwetzloot, HMP Law’s director of business innovation, and himself a widely connected North Korea watcher.

If it becomes feasible for global businesses to go North, Hay does not recommend partnering with a South Korean company. “A JV at the best of times is a challenging enterprise and [this approach] is risking a menage-a-trois scenario,” he said. “That is an extremely delicate configuration for any company contemplating doing business in North Korea.”

Given this, isn’t Hay’s 2018 relocation to Seoul an admission of mission failure? “In my seminars, the first rule I tell anyone is, ‘Don’t bet the farm.’ The second point is, ‘I have bet the farm,’” he mused.

Hay, who maintains “strong channels of communications” with his Pyongyang counterparts, is certainly not yet finished with North Korea. “I remain exceptionally confident about the outcome on the Korean peninsula,” he said. What, then, is behind his belief in a better tomorrow?

“North Koreans are consistently underestimated and are highly determined,” he asserted. “Now, as we enter 2019, they are at absolutely the highest levels of self-confidence I have ever witnessed.”

Read: Part 1 of this two-part interview