Kim Jong-il's Great Currency Confiscation: Update
Some readers may recall a few of my posts on this issue back when the North Korean currency confiscation was more current, but its effects are still being felt today.
Sharon LaFraniere, writing for The New York Times, tells us more details about that 'reform' in her lengthy, fascinating article, "Views of North Korea Show How a Policy Spread Misery" (June 9, 2010). Among other anecdotal reports, she details the life of a construction worker who lived in poverty but had managed, by selling small bags of detergent on the black market, to scrape together a small nest egg over the years, more than 1,500 dollars . . . until that fateful day:
It hardly seemed that life could get worse. And then, one Saturday afternoon last November, his sister burst into his apartment in Chongjin with shocking news: the North Korean government had decided to drastically devalue the nation's currency. The family’s life savings, about $1,560, had been reduced to about $30.Quick-witted, the man instantly realized what had to be done:
For the construction worker, his sister's news of the coming devaluation unleashed a furious scramble to salvage the family nest egg. He emptied the living-room cabinet drawer that held their savings and split it with his wife and daughter, telling them, "Buy whatever you can, as fast as you can." The three bicycled furiously to Chongjin's market.Unfortunately for his family, he wasn't the only quick-witted North Korean:
"It was like a battlefield," he said.But money wasn't the only thing lost in the disastrous devaluation:
Thousands of people frantically tried to outbid one another to convert soon-to-be worthless money into something tangible. Some prices rose 10,000 percent, he said, before traders shut down, realizing that their profits soon would be worthless, too.
The three said they returned home with 66 pounds of rice, a pig's head and 220 pounds of bean curd. The construction worker's daughter had managed to purchase a small cutting board and a used pair of khaki pants. Together, he said, they spent the equivalent of $860 for items that would have cost less than $20 the day before.
"Now, if you go to the market, people will say anything," the construction worker said. "They will say the government is a thief -- even in broad daylight."Even the small remaining modicum of trust in the North Korean government was lost in the monetary debacle, and not just for the construction worker's family. I suppose that this could be considered a silver lining, not that it offers any coin to bank on. We'll have to see how things pan out.
I ought to mention that the NYT credits Ms. Su-Hyun Lee for contributing research from Seoul, South Korea for this story by Sharon LaFraniere. I don't know Ms. Lee personally, of course, but she often contributes to NYT reports on Korea, and I hope that she continues such investigations as this one.
Labels: North Korea