North Korea: 'Stalled' Currency Reform

Market Stall in North Korea

(Image from Times Online)

Readers will recall the currency 'reform' enacted by the North Korean regime late last year that forced North Korean citizens to exchange their won notes for newly issued ones at the rate of one hundred old won to one new won, supposedly to control inflation but actually to confiscate wealth since only 100,000 old won (raised to 150,000 after protests) could be exchanged, a relatively small amount in the North's currency. Market stalls were closed, like the one in the image above, which comes from an older issue of the Times Online (December 3, 2009), accompanying an article by Richard Lloyd Parry titled "North Koreans in misery as cash is culled." The caption beneath the photo at the linked site says:

"Street stalls usually offer one of the few glimpses of fiscal activity in Pyongyang -- but even they were closed for business by yesterday's currency revaluation"

The photo of the stall apparently shows an image from before the currency 'reform', for this market stall is open and seems to depict a scene from early autumn rather than December. But go, anyway, and read the article to recall the reactions of ordinary North Koreans at the time that the currency 'reform' was abruptly enacted.

However, what I really want to call your attention to this fine morning is an article that I received by email yesterday from the USFK J2 (United States Forces Korea, J2):

"Japanese Journalist Reports DPRK Citizens Angry Over Currency Revaluation," Korea Open Source Digest (Volume 3, Issue 18, Saturday, 30 January - Monday, 01 February 2010)

This is a translation of a Japanese article in the Sande Mainichi (01/31/10 ), but I didn't find the journalist's name (and no link was provided). Perhaps he wished anonymity? Whatever the reason for the missing name, the report is well worth reading for what it says about the rising anger on the part of the average North Korean, so I'm posting the entire article below:

Until mid January, I was on an information gathering trip to the DPRK-China border region. It has now been 17 years since I first started gathering information in that region: I have made nearly 70 visits. To learn about the DPRK internal situation, one can gather a much greater amount of information more quickly and more accurately these days in the DPRK-China border region than inside the DPRK, where there is heavy surveillance and tight regulation. That is because one can make contact with ordinary people, the best source of information.

On this occasion too, I met with a number of North Koreans who came to China, either legally or illegally. The people who can leave the country legally are those who are going to visit relatives or who are engaged in international trade. As for visiting relatives, however, one cannot simply receive a permit. First, one has to undergo a detailed investigation to determine whether or not one really has relatives in China, and whether or not there are any political issues involved with one's behavior and past history. About 300 dollars, which is equivalent to 10 months income for ordinary people, is required to obtain a passport. This includes bribes to the Security Agency (intelligence organization). One can say that those who can get out [of the DPRK] have strong loyalty to the regime and are affluent.

It is said that, prior to visiting China, people always receive ideological education. They receive a lecture: you should absolutely never make contact with South Koreans, foreigners, or people involved with a church; when you go out, you must always wear a Kim Il-so'ng badge; because China is swarming with robbers, South Korean operatives, and swindlers, you should avoid going out as much as possible; and in the event it is unavoidable, you should go out with relatives, and so on. The lecture is said to conclude with a warning, which borders on a threat, that "You must not forget that, even in China, there are many people from our country, so everything you do there will be reported."

Perhaps as a result of that [in the past], people who came to China to visit relatives did not readily share their candid opinions with me. Our conversations were as if we were speaking inside the DPRK. They said things such as, "Our life is hard now, but since we have succeeded with a nuclear test, we will become a great economic power" and "Everyone lives without worry because the people all believe in General Kim Jong Il and are firmly united."

But, surprisingly, what I heard this time from people who came to China legally to visit their relatives was a litany of complaints. Many also plainly criticized the regime: "It does not provide rations nor pay, yet it prohibits us from engaging in trade. How do they want us to live?" and "People with power live well from corruption, but common people become more and more impoverished" and "The 15 years of Kim Jong Il era have been a great failure. Everything is increasingly getting worse. I surely hope someone will rise up."

Those who came to visit their relatives, who [in the past], even when they spoke about the difficulty of living, strictly refrained from criticizing the regime itself, [now] speak ill of General Secretary Kim. Probably, unhappiness has been pent up to such an extent, but behind that, there is the currency revaluation through which, at the end of last November, the DPRK lowered its currency, the won, to one hundredth of its former value. As the result of the revaluation, which was carried out in the name of eradicating inflation, the economy has been thrown into a great chaos; the price of food has risen about four times in the past two months. Public estrangement from the Kim Jong Il regime did not just begin. But I felt that because of the unreasonable revaluation it is spreading in the DPRK as if a dam has broken.

I take it that the currency revaluation is leading to a current re-evaluation of General Secretary Kim Jong-il's 'beloved' leadership. If this journalist is right, the collapse of the North Korean regime may be drawing near -- though I'd be a fool if I tried to predict anything, such as putting a date on collapse. I'll limit myself merely to observing that there appears to be a sea change in the mood of people who previously would have been loyal to the regime.

Perhaps my ten-year-old son's depiction of a skeletal Kim Jong-il will turn out rather prescient -- the great, 'beloved leader' looking at us with that now familiar, deer-in-the-headlights, shocked Ceausescu look.