The Logbook: The North Korean Choco Pie black market

The Kaesong Industrial Complex (KIC) project was launched in 2004, opening North Korea to doing business with South Korean firms. KIC is an industrial park where South Korean companies manufacture products using relatively cheap North Korean Labor. The project was seen as a way to ease tensions between the two countries and help North Korea reform its economy.

While the estimated 50,000-plus North Koreans were well paid by North Korean standards, it was reported that up to 90% of their wages went back to the North Korean government. Because South Korean firms were prohibited from offering cash bonuses to its employees to incentivize hard work, the firms turned to a more informal system. Enter the Choco Pie, a snack consisting of two round layers of cake with a marshmallow filling, coated in chocolate, produced by Orion Corporation, a South Korean company.