North Korea Executes Head of Finance After Currency Reform Led to 50% Devaluation

Thursday, March 18, 2010

A botched currency reform that led to a 50% devaluation of the North Korean Won and ignited inflation cost the top official responsible for it his head.
The execution by firing squad in Pyongyang last week of Pak Nam-ki, Labour Party chief for planned economy, was for the crime of "a son of a bourgeois conspiring to infiltrate the ranks of revolutionaries to destroy the national economy", South Korea's Yonhap news agency said, quoting sources.
French website RFI has the details:
Pak had been purged in January and was executed for "deliberately ruining the national economy" as a "son of a big landowner", South Korean media say.

They believe that Pyongyang needed a scapegoat for the botched revaluation of the currency - the won - which fuelled inflation and worsened serious food shortages.
The crisis threatened the smooth succession of power from the country's leader Kimg Jong Il to his youngest son Kim Jonh Un.
South Korean media reports suggest that Pak had submitted a paper claiming that a revaluation would "improve the people's lives and secure the national budget".
This caused Kim Jong Il to revalue the won in November, with people having to swap old bank notes for new ones at a rate of 100 to one.
Soaring prices after the revaluation proved Pak wrong. He was then reportedly denounced as a traitor at a party convention in late January and arrested on the spot.
In the capital Pyongyang shops which trade in won remain closed until next week when the revaluation is expected to be completed...
The North's abrupt currency move was aimed at cutting into the power of a burgeoning merchant class. But it destabilised the North's won currency, sparked rare social unrest and slowed the flow of consumer goods from China to a trickle, reports said.
Other reports say the currency devaluation had let to protests in the capital Pyongyang. Regime change in North Korea may come the classic capitalist fiat money way. No political system has ever survived hyper inflation in the past. These developments show that the last communist dictatorship in the world may fail exactly the same way.
And, oh, there are no news about his succession...


Wikinvest Wire