North Korea: when he bought a thousand Volvos, without paying them

Divided in two by a war that ended exactly seventy years ago, the Korean peninsula has offered in this period of time two models of development that are profoundly different from each other. There South Korea, after decades of political instability, has shown itself to be one of East Asia’s great capitalist powers. On the other side North Korealed by the dynasty of Kim Il-sung, looks like a anomalous communist regime which survived intact into the third decade of the 21st century. Despite such radical differences, the two countries separated by the 38th parallel were supported up until the 1970s by economies that were comparable in terms of production and wages, and it is precisely in these last moments of equality that North Korea wrote one of most curious pages of its history: Pyongyang’s purchase of a thousand Volvos that have never been paid for since.

The North Korean economy, now one of the last in Asia, had enjoyed solid growth rates since the end of the civil war. A constant development that owed much to the conspicuous Soviet funding, aimed at a territory that had known how to preserve and develop the industries that arose during the Japanese occupation. Driven by a promising situation, several western countries thus decided to conduct investments and entrepreneurial initiatives in close collaboration with Kim Il-sung, progenitor of the dynasty that still leads the country through his nephew Kim Jong-un. One country in particular was keen to seize the opportunity: Swedenthe first Western nation to open an embassy in Pyongyang in 1975 and the most confident in North Korea’s economic miracle.

The alliance with Sweden

A trust so genuine as to push Stockholm to sign huge deals worth 70 million dollars, updated for inflation about half a billion dollars today. Within such massive manoeuvres, the political implications are inevitable: it was in fact in the early 1970s that the Swedish government, led by a Social Democrat, saw economic collaboration with North Korea as an opportunity for an alliance with a communist country at the era still integrated into the world chessboard. And among the big names in Swedish industry intending to follow the new course, it could not be missing Volvo, the giant of automobiles.

Thus in 1974 the first batch of products was delivered 144at the time the luxury model proposed by the Gothenburg house: in the following twelve months a thousand of them will be delivered in all, then nothing. Indeed, the joint venture between Europe and Asia enjoyed a short life, swept away in 1975 by a harsh crisis due to the excessive optimism of the Korean authorities towards their own raw materials. In fact, Pyongyang’s exports were based on the trade of metals such as copper and zinc, which just in the mid-70s suffer a collapse in prices. North Korea therefore sees a sudden and brutal end to a parenthesis of economic optimism that has not been repeated since then. It is above all Sweden that pays the price, a privileged partner that sees the trust granted a few years earlier turned against it.

Debt to be repaid

The reaction from the Scandinavian press was immediate, with harsh accusations against Kim Il-sung and criticism of the real or presumed debts that characterize his administration, sometimes as paradoxical as that of 5 million dollars (at the time) with Rolex. The government is much more discreet: despite being considered “an enemy shaped by American propaganda“, Sweden has never severed its diplomatic ties with North Korea maintaining its embassy in Pyongyang. However, twice a year Stockholm sends reminders relating to the debt of the Volvos, which has never been paid and increased to over 300 million euroswithout Kim Jong-un’s regime showing particular interest in concluding the matter.

Much more attention has been paid to the vehicles themselves, still circulating on North Korean roads in “immaculate” condition, as reported by journalists and photographers visiting the country. Most of the fleet has been converted to taxis, used to handle the strictly controlled tourism that affects the North Korean capital, but there are also more formal destinations: Communist Party officials, for example, have the opportunity to show off their 144s in occasion of parades and conferences.

Half a century later, a fragment of modern automobiles, not unlike the one that characterizes the streets of Cuba, thus becomes a witness to an era where a rebellious nation seemed on the verge of integrating itself with the global economyand at the same time a symbol of a lost opportunity to make North Korea great, as Kim Il-sung wished.