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North Korea: Winning Popularity by Bashing the Rich?

Posted by: Ihlwan Moon on December 7, 2009

Despite reports of an outburst of anger over North Korea’s stunning redenomination of its currency last week, ordinary citizens in the communist country are not so severely affected by the move, according to a prominent defector from Pyongyang. Aimed directly at curbing the unofficial economy, North Korea on Nov. 30 began circulating new notes that lop off two zeros from the nominal value of the North Korean won. Cho Myungchul, a former professor on economics at Pyongyang’s Kim Il Sung University, told a seminar in Seoul today that North Korean leader Kim Jong Il’s regime is likely to win support from the vast majority of North Koreans for its crackdown on corruption and abuses by rich traders who benefitted the most from bustling activity in black markets.

Cho, who defected to South Korea in 1994 and now monitors Pyongyang’s policies in a state-funded think tank in Seoul, says the redenomination was a carefully calculated political move by Kim and his supporters who want to make sure the North Korean leader’s youngest son, Kim Jong Un, is successfully groomed as his successor. “This is a political maneuvering killing far less than 20% of the population to win support from more than 80%” who have not seen any improvement in their life despite burgeoning market activities. “This is a ploy to blame the market for the government’s failure to boost the economy.”

Although North Korea set a ceiling for the amount of old notes its citizens can exchange into new ones, most households don’t have enough cash kept at their homes to be affected. Those who have earned a lot of money and stashed cash under the mattresses or in the closets beyond the reported ceiling of 150,000 won in old notes are members of the new class of rich who have increasingly grown beyond the control of the Stalinist regime. Cho argues that the main purpose of the redenomination is to undermine the rich and redirect funds into state development projects.

Cho notes that in the previous redenomination of its currency in 1992, North Korea set a limit of 399 won for the amount people could exchange. That was less than six times the then-average wage of North Korean workers. “The latest ceiling is some 50 times the average wage of 3,000 won in the North and most households can’t afford to have that much money at home,” Cho added. Sure there might be an increase in the number of defectors fleeing North Korea among the rich, but for the repressive regime that places highest policy priority on its political security, that may be an acceptable loss of face.

Reader Comments

the beginning of the end

December 7, 2009 2:09 PM

Another amazing strategic move by Kim Jong. Lets penalize the most 20% productive citizens in favor of the 80% least productive. I'm sure that 20% are the scoundrels of society anyway, you know, surgeons, doctors, entrepreneurs. Sounds like Pol Pot Pt 2 soon coming to pass.

C. H. Ng

December 7, 2009 9:13 PM

This is a classic example of too much power vested in one man, whose with one decision can drastically change a nation's path to self destruction.

Even if the majority of 80% of the population have no objection with his currency redenomination decision, ultimately in the long run the whole country will suffer as the balance minority (20%) with "brain" might decided to leave as they see no future staying there. A nation w/o her cream of creative brain will never develop & soon become stagnant. Though the people will suffer, the despotic ruler & his cronies will bask in even more power & glory as there won't be anyone with brain to challenge them.

Same situation in any organisation or company where the authoritarian leader is always surrounded by only the "yes-man". Such organisation/company will never grow to greater height.

Wong Park

December 8, 2009 12:43 AM

If the top 20% could leave, don't you think they would have already left the country by now?


December 8, 2009 3:32 PM

When will that happen here?

C. H. Ng

December 9, 2009 10:37 PM

If we will to look at the past history and/or current happenings around this whole world, when a government/regime tried to stifle or suppress the creativeness of the minority rich people in order to please the poor mass,
it usually ended up messing up the whole country. It won't work becoz God have created us human beings as such...
very few of us are borned to be leaders; some of us are borned to be rich & become bosses; the rest of us (me included))are unfortunately borned to be ordinary men-in-the-street.

Without a leader, the country or organisation cannot run properly; w/o rich men with creative, innovative & enterprenual minds to do business successfully, there will be lesser jobs and/or opportunities for us ordinary folks to find works for a living. Not everyone of us can be a successful boss.
And not everyone of us can be rich no matter how hard we can try. So why blame the rich & successful people & started going after them, if they are not using unscrupulous ways to enrich themselves?

One typical example was the incident that happened in Indonesia not long ago when with government's backing, the poor local people started killing, looting & burning the rich minority Chinese's properties & interests as they blamed them for their failure, The afterpath is that there were mass flights of the rich Chinese & capital outflows that their currency (rupiah) was almost rendered worthless if not for the government's offer of very high bank interest to lure back the rich. That incident easily costed the country & her people years of lost time with backward economy.

Nonetheless I believe it's a government's duty to ensure the gap between the haves & have not is not too great & that everybody will not suffer from hunger & lack of basic necessity.

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