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The E-Sylum: Volume 13, Number 12, March 21, 2010, Article 29

NORTH KOREAN OFFICIAL EXECUTED FOR BOTCHED CURRENCY REFORM

Loren Gatch writes:

Last December 6 you ran a little piece about North Korea's quixotic and self-defeating attempt to punish black-market 'speculators' by lopping two zeros off its currency. The effect of this policy instead was to throw into turmoil an already-impoverished economy.

The finance official responsible for this policy, Pak Nam-gi, was executed by firing squad last week for being "a son of a bourgeois conspiring to infiltrate the ranks of revolutionaries to destroy the national economy". Who knew?

While I don't advocate such flagrant abuses of due process, a little part of me has a sneaking admiration for such draconian standards of accountability. I can only imagine what the North Koreans would have done with, say, a central banker who had presided over a massive and destructive asset bubble in the housing market!

North Korea has executed a senior official blamed for currency reforms that damaged the already ailing economy and potentially affected the succession, a news agency in South Korea reported today.

Pak Nam-gi was killed by firing squad last week, said Yonhap, citing multiple sources. The Workers party chief for planning and the economy had not been seen in public since January.

The 77-year-old was put to death as "a son of a bourgeois conspiring to infiltrate the ranks of revolutionaries to destroy the national economy", the agency said.

But it reported that many North Koreans did not believe the explanation, citing one source who said: "The mood is the leadership has made Pak Nam-gi a scapegoat."

The International Crisis Group (ICG) described the currency revaluation as "disastrous" in a report released this week.

The reform appeared to be aimed at reasserting state control over the economy, curbing inflation and tackling corruption.

Although people were allowed to exchange currency at a rate of 100 to one only a small amount could be changed. That wiped out the savings of slightly better off North Koreans who had managed to put aside money through trading.

Food prices soared as uncertainty over contradictory policies led to hoarding, the ICG said. By mid-January there were reports of rising deaths from starvation, thought to have prompted the release of emergency food supplies.

To read the complete article, see: North Korean finance chief executed for botched currency reform (www.guardian.co.uk/world/2010/mar/18/north-korean-executed-currency-reform)

To read the earlier E-Sylum article, see: ANGRY NORTH KOREANS BURN BANKNOTES IN PROTEST (www.coinbooks.org/esylum_v12n49a16.html)

Wayne Homren, Editor

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