Skip to comments."N. Korea's Currency Reform Could End in Chaos" (Editorial from South Korea)
Posted on 12/07/2009 12:09:21 AM PST by AmericanInTokyo
N. Korea's Currency Reform Could End in Chaos
The North Korean military is on alert for a possible civil uprising following last week's sudden currency reform, according to a Russian business newspaper citing foreign diplomats in the communist country. The currency reform involved the exchange of only limited amounts of old bills at a rate of 100:1, with the state confiscating the remainder. People who are afraid of exposing the size of their wealth have no choice but to hide their old bills. It is difficult to ascertain the actual circumstances, but it is apparent the North Korean regime is virtually stealing money equivalent to two or three months' wages for the average worker. And public discontent is rising to the degree that the regime had to order the military on standby to quell riots.
The currency reform may seem illogical, but it appears to follow careful political considerations. Ever since the regime became unable to feed its own people, a primitive form of the market economy in the form of open-air markets emerged everywhere as North Koreans struggled to stay alive. A certain group of North Koreans were able to amass a little wealth that way, and when the gap between rich and poor began to widen in a country where such differences are acutely visible, the regime probably began to view them as a threat to the system.
In other words, the currency revaluation was probably aimed at destroying the middle class before it swells any further and becomes a real threat. Destitute North Koreans still outnumber the new middle class, which means the outcry from the currency revaluation will not be as widespread, assuring North Korean officials that any demonstration of discontent can be suppressed.
Dmitry Moshakov, a North Korea expert at the Institute of Oriental Studies of the Russian Academy of Sciences, said, "This currency reform targeted the middle class." Pavel Lesakov at Moscow State University, said, "There won't be many North Koreans who protest against or suffer from the latest steps." Others say that the privileged members of the ruling party and the truly wealthy merchants have already exchanged their money into foreign currency. As a result, the people who have been hit hardest by the latest measures are ordinary traders who were just keeping their heads above the water. They must be feeling tremendous anger at the state.
"Temporary discontent will be quelled and the North Korean regime will emerge victorious over the short term," said North Korea expert Rudiger Frank, an East German who studied at Kim Il Sung University. "But the experience of former socialist countries is that disappointment and discontent pile up silently and gradually lead to revolutionary circumstances." Frank said public discontent ends up erupting at times like a leader's death, famine, external shock or domestic unrest.
The North Korean government says it will pay wages to laborers as it has done so far even after implementing the 100:1 currency revaluation. That means monthly wages will increase 100 times, but prices of rice and corn will also rise as long as supply remains the same. That means the currency revaluation will make no difference whatsoever to them. Consumer prices have already skyrocketed. If things go as planned, North Koreans will be able to use the new currency starting tomorrow. But experts say that would be impossible. It is time for the South Korean government to consider precautionary measures, taking a close look at the mounting disappointment, discontent and chaos in North Korea. email@example.com / Dec. 07, 2009 13:22 KST
But of course, the distressed North Korean people already have two strikes against them.
A police state which is unparalleled in human history perhaps.
President Barack Hussein Obama (hmmm mmm MMM!) in the White House, who would do nothing to encourage their liberation from Communism IMHO, materially, morally or spiritually.
whats the point of copying the china model, north korea, if you’re going to cut it off whenever it becomes successful
good observation. in fact, north korea should try the SOUTH korean model for awhile. now, where is that night satellite view of the Korean peninsula picture that has been floating around for some time.....
communist are ALWAYS clueless about the price system and how demand/supply mechanic work. Whenever they impose prices, they create shortages. It happen in the US education and health system as well
the US won is next
thanks a lot, Mr Bush
Maybe Goldman Sachs could teach them all how to quietly buy handguns for “personal protection in case the masses rise up”.
North Korea. Absolutely the worst country on the face of the planet, specializing in starving their own people ....
Yet Clinton and Bush spent years kissing their collective asses ... and we still do.
Just look at NK to see what happens next in Iran.
I think the people of N. Korea are too beat down and hungry to raise up against their masters unless a military coup is in the cards.
Even then I would expect obamma to support the existing regeim.
You are correct. The NK people do not have the strength to overthrow their ‘Dear Leader’. One more missile threat from that little shit and we should put them all out of their misery.....but we won’t.
It is reported that Chia Head was very traumatized by the video of Romanian uprising and subsequent execution of Ceausescu's. His whole life since 1989 has been dedicated to avoiding the same fate. The fall of Eastern Europe and Soviet Union was a real life nightmare for Chia Head. This has been the backdrop of every major decision he made since that time. However, many in the West just don't get it.
For Chia Head, all these reformers went nice feely touchy and soften the system, which swiftly led to the total collapse. Further N. Korea is far more oppressive and closed than these former Warsaw block communist regimes. There is no way in hell N. Korean regime survives any real opening and loosening its grip on population.
The longer this regime stays, the uglier the eventual breakup will be. Unwinding of this regime cannot be done in orderly incremental manner. It is a pipe dream or comforting delusion by outsiders and some reality-challenged eggheads in academia and various think tanks.
Especially, China would pay for this. It has been instrumental in dragging this festering cancer along.
N. Korea shows the brutality of its regime, but also shows the brutality of Chicom regime under their smiling facade.
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