Presenter: Bill Bainbridge
Speakers: Dr Bronwen Dalton, Korea specialist, University of Technology Sydney; Chun Hae-sung, South Korean Unification Ministry spokesman; Erica Kang, director, International Network for Good Friends
A senior North Korean finance official has been sacked, after overseeing the country’s disastrous currency revaluation. Under a decree issued last November, old banknotes were swapped for new ones, at a rate of 100 to one. But the amount which could be exchanged was restricted, effectively wiping out many people’s savings and causing widespread anger. South Korea’s intelligence agency says the senior official in charge, Pak Nam-Ki, has been absent from public activities since early January. It’s been reported the official will be put on trial amid a wave of recriminations over the policy.
BAINBRIDGE: It was part of Pak Nam-Ki’s job to keep the planned currency revaluation completely secret. But just before the decree was made official some well connected North Koreans engaged in a frenzy of currency exchange designed to pre-empt the loss in value of their savings. Bronwen Dalton, of the University of Technology Sydney, says that may be why the man responsible for implementing the policy has now fallen out of favour. Alternatively, she says, it may be designed to calm public fury over the policy.
DALTON: There’s been a great deal of social unrest following the currency revaluation and also the ban on the use of foreign currency and the redenomination-revaluation effectively wiped out many people’s savings.
BAINBRIDGE: The development has South Korea worried over the prospect of more unrest and division in the unstable north. Chun Hae-sung is a spokesman for the South Korean Unification Ministry.
CHUN: The South Korean government has a very deep interest in North Korea’s situation after the currency reform, and we are currently examining the situation thoroughly. However, we believe it is a little early to make an exact judgment about the result.
BAINBRIDGE: But it’s clear the policy has sparked rampant inflation and food shortages. Seoul-based human rights organisation Good Friends says prices of many staple foods like rice and corn are doubling on a weekly basis. Erica Kang the director of the International Network for Good Friends.
KANG: Because of very, very high inflation on goods and especially on food people are unable to access any food, and particularly there aren’t any markets, the real market activity going on, even if there is food it’s very, very hard to access it because it’s very dear indeed.
BAINBRIDGE: Bronwen Dalton says while the state once provided an alternative to markets it can no longer afford to supply its people with basic foods leaving ordinary North Koreans with few options.
DALTON: The latest reports are that 80 per cent of household income and at least half the calories of North Koreans now come from the market system and by banning the market system and wiping out savings you’ve effectively removed access to food for millions and millions of people.
BAINBRIDGE: Despite the dire situation the United Nation’s World Food Programme is struggling to raise relief funds for the North. Major donors — including South Korea and the United States — refused to help in protest at its second nuclear test in May last year. By the end of 2009 the WFP had only reached 18 percent of its target of 492 million dollars in relief funds for the communist North. Nonetheless Bronwen Dalton says the regime is determined to crack down on the presence of private markets.
DALTON: While we’ve seen countries like Vietnam and China experiment with a market economy, North Korea, I think correctly, sees the spread market relations as a real challenge to the capacity of the regime to continue. It’s simply too rigid a system to allow any independent economic activity. Even the slightest of independent decision making which involves movement of people and goods challenges the incredibly tight grip the regime to date has had on daily life.
BAINBRIDGE: Dr Dalton says food market have been forced to go underground and can only continue to operate by bribing officials to turn a blind eye. As for the hapless Mr Pak – she says he could well be heading for a public humiliation to pay for regime’s failed policy.
DALTON: The strategy might be to unite the public dissatisfaction with the move by uniting against this one figurehead and hopefully unloading the discontent upon that person – many hours of televised trials and humiliations.