Pro-NK Paper Reports Currency Revaluation
By Kang Hyun-kyung
Staff Reporter
A pro-North Korean newspaper published in Japan reported Friday that North Koreans have begun replacing old banknotes with new ones, confirming a report that the North revalued its currency early this week.
The Choson Sinbo reported that North Koreans began exchanging the old currency for the new one starting Monday.
The newspaper confirmed reports that the North Korean authorities had removed two digits from the nominal value of banknotes, the first revaluation in 17 years.
The North set the exchange rate as 100 to 1, indicating that the old denomination of 1,000 won has been replaced by the new 10 won.
The Ministry of Unification declined to confirm the North's revaluation of its currency, repeating that it is a matter that needs to be announced by Pyongyang.
Rep. Hwang Jin-ha of the governing Grand National Party (GNP) observed that the North's motive for the currency revaluation was to repress what he called ``market power'' in order to pave the way for the power transition to its next leader.
``The North has seen a new economic class of businessmen and women after it introduced some market economy elements earlier. Those who are in power considered the emergence of the new socio-economic class as a threat to their ruling of the hermetic nation,'' said the lawmaker.
Hwang concluded that the leadership has been determined to weaken the new class to bolster the power succession to Kim Jong-il's third son Jong-un.
Prof. Zang Hyoung-soo of Hanyang University called on policymakers to watch carefully how rank-and-file North Koreans react to the authorities' currency reform.
``It's going to be very interesting to follow-up North Koreans' responses to the authorities' currency reform,'' he told The Korea Times.
``If North Koreans resist vehemently against the top-down measure and do not cooperate with the government, this means that a market economy was considerably set in place in the North.
``I think chances for this are low, but if it has happened, the North Korean authorities will be pressed to make its economy open and seek economic reform, which was the case of Vietnam back in the 1980s.''