Secret History: North Korea and the Unpaid Volvo Bill

PYONGYANG, NORTH KOREA – 1989/04/01: Some of the 800 Volvos the Korean government bought in the early 1970’s, but never paid for. They are mostly used as taxis and are usually parked outside the Koryo Hotel in Pyongyang. (Photo by Gerhard Joren/LightRocket via Getty Images)

    Urban Lehner – The 1973 Volvo screeches around tight curves, slaloming across all five lanes of the road. In another country it would be a suicide ride. But, in North Korea, so few cars ply the highways that each can often have the road to itself.

It’s a rarely-mentioned fact that, in 1975, Sweden was the first Western nation to open an embassy in North Korea. As a result, Swedish companies were rewarded with huge trade contracts that resulted in thousands of tons of Swedish-made industrial equipment being shipped to the tiny, Communist country. Those equipment deals included orders for heavy trucks, tractors, mining equipment, and more than a thousand Volvo 144 sedans.

Here’s the best part: North Korea never paid Sweden a dime for any of that stuff.

“We had heard the story that the North Korean [government] had bought these cars, then stiffed Volvo and not paid,” American journalist Urban Lehner told NPR. “We joked that we were riding around in stolen cars.”

How Did North Korea End Up With All Those Volvos?

It may be known as an impoverished, isolated nation today, but North Korea wasn’t always seen in that light. In the early 1970s, North Korea seemed to be doing alright. “At the time, [North Korea] wasn’t doing so badly,” explains Jonathan D. Pollack, a senior fellow at the Brookings Institution. “After the Korean War, their economy was rebuilt, it became a functioning industrial state, still very aid-dependent — but it wouldn’t have seemed like such a bad bet, under the circumstances.”

One company who decided to take that bet was Volvo. Volvo, being as progressive a company then as it is now, figured that there was money to be made in North Korea’s emerging economy. As such, the company sent tens of millions of dollars (in 1970’s money!) to Pyongyang to help build the fledgling nation’s infrastructure. Part of that infrastructure included cars, sure- but we’re also talking about Volvo tractors and heavy equipment, too. Everything a young country would need, in other words, to get itself up and running.

Hilariously, the Swedes decided to send it all on credit.

Well, it seems hilarious now. At the time, though, there was a real sense that there was opportunity in North Korea. Shortly afterwards, Sweden- as I already mentioned- became the first Western country to establish an embassy in Pyongyang. That move made the first Swedish ambassador, Erik Cornell, something of a celebrity. Not that it mattered. “It was an empty country. Snowy, windy, cold. And we came to Pyongyang. You know, you started from scratch when you came there,” says Cornell, who now lives outside Stockholm. “You couldn’t drop into a cafe or a restaurant because there were none,” he says. Sometimes, all he could do was go out for short drives in his Volvo. “That was the conditions of life.”

As promising as things looked at the outset, it didn’t last. Shortly after Sweden opened the embassy in Pyongyang, the country’s trade with the West came to a sudden halt, and it became clear North Korea wasn’t paying for the goods it had imported.

Forty years later, the country still hasn’t paid- and those thousand-off Volvo sedans, buses, and trucks are some of the only vehicles on the road. A testament to both Volvo longevity and the ingenuity of the North Korean mechanics who keep the running, sure- but also an example of Swedish diplomacy.

“The Swedes are very good at this,” says Jonathan Pollack of the Brookings Institution. “The Swedes have often played that kind of a role in diplomacy of various kinds. They are seen, in some measure, as an honest broker.” After the attack on Pearl Harbor, Sweden acted as the protecting power for Japanese nationals in Hawaii during World War II, and often acts in the interests of other Western nations when journalists or toursist are detained by North Korea.

One example is when Sweden acted as a Protecting Power for American journalist Laura Ling, who was detained in North Korea for 140 days in 2009. Ling describes the first time she met the Swedish ambassador emotionally, saying, “I just lost it. I was really overcome by emotion because I knew that he was the one person in North Korea who was working on my behalf … He was my lifeline.”

So, maybe, the price of a thousand old Volvos is a small one to pay. You know, in the grand scheme of things. I’m sure Laura Ling’s family sees it that way, at least.

Source | Images: Tanya Procyshyn, Roman Harak, via NPR.

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