North Korean Premier Apologizes for Currency Change

11 02 2010

By Bomi Lim, Businessweek (February 10, 2010)

Feb. 10 (Bloomberg) — North Korean Premier Kim Yong Il has apologized for inflation caused by last year’s currency revaluation and vowed to better feed the country’s 24 million population, a Seoul-based rights group said.

Kim acknowledged the state prices for goods were wrongly set after the currency revaluation in December, causing “confusion and unrest,” Good Friends said yesterday on its Web site. Kim’s comments were made at a recent meeting with key officials in Pyongyang, said the group, which says it obtains information by contacting people in North Korea.

The report is the latest to suggest unintended fallout from the totalitarian regime’s currency revaluation, which reportedly stoked inflation and caused shortages of goods. North Korean leader Kim Jong Il fired Pak Nam Gi, head of finance and planning for the Workers’ Party earlier this month, holding him responsible for the failures, South Korea’s Chosun Ilbo newspaper reported last week…

(Chosun Ilbo, 11 Feb. 2010) A North Korean source has shed more light on an apology by Premier Kim Yong-il on Feb. 5 which apparently acknowledged that the currency reform in late December went disastrously wrong.  The source said Kim (not to be confused with leader Kim Jong-il) read out an hour-long statement before village chiefs and other party officials at the People’s Palace of Culture in Pyongyang on Monday morning. “I sincerely apologize for having caused great pain to the people by recklessly enforcing the latest currency reform without making sufficient preparations or considering the circumstances,” the source quoted him as saying.

Kim also pledged to rectify the mistakes, saying he would do “my best” to stabilize people’s financial circumstances. The revaluation of the won, instead of curbing inflation, led to skyrocketing prices of daily necessities. He indicated that the regime will allow people to use foreign currency, which has been banned since the reform, and permit open-air markets to return to normal after a crackdown that seemed aimed at strangling a nascent market economy. But Kim at the same time stressed the need to stick to state-set prices, adding that the government will strictly crack down on the hoarding of goods.

Some experts say the situation in the North has returned to almost the state before the currency reform. A South Korean official said North Korean authorities loosened their control of the markets since there has been unprecedented resistance from ordinary people. This seems to have forced Kim’s hand. After Kim’s apology, most money changers and illegal traders who had been arrested were reportedly freed. The number of people leaving for China has grown noticeably as offices of state agencies or state-run corporations involved in earning dollars, which suspended business due to the ban on use of foreign currency, have resumed business…

ANU Ph.D student, Danielle Chubb, spoke to 702 ABC Sydney Radio’s Deborah Cameron about how a currency devaluation in North Korea might destabilize one of the world’s most closed nations. Download as MP3 file here…



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