3 December 2009 (Updated)

THE GREAT CONFISCATION CONTINUES. The Wall Street Journal reports that in Pyongyang, the exchange has been “calm and orderly,” at least to the extent foreign observers have been able to tell. Meanwhile, the Daily NK explains who will be hurt most badly by this.

If markets are damaged as badly as I suspect they might be, there could be a new flood of food refugees into China this winter. Another effect will be the final collapse of confidence by the North Korean people in their government’s currency. Traders and households won’t want to hold large quantities of North Korean won, may refuse to accept it, and will soon start chasing dollars and yuan instead. With the black market looming ever larger over the official economy, the effect of this move will be to permanently depress the value of the North Korean won and ensure that hyperinflation accelerates as soon as the new currency is distributed. Suddenly, those dollar bills attached to balloons are more needed than ever.

Update: Must-reading from Marcus Noland, who places this event in the context of other recent examples of North Korea’s economically motivated brutality:

Surveys of defectors suggest that the repressive apparatus of the state is disproportionately targeting those involved in market-oriented activities. Participants in market activities are more than half again as likely to be detained as other citizens…. Prisoners enduring a typical-length incarceration in a low-level “labor training center” often used to house economic criminals observed horrific abuses at astonishing rates: execution (observed by 60%), forced starvation (90%) and death by torture or beating (20%).

I HAVEN’T PAID ENOUGH ATTENTION TO THIS up to now, but here’s more about the growing movement to indict Kim Jong Il before the International Criminal Court. One complication is that the United States doesn’t accept the ICC’s jurisdiction, and in light of what has happened to international institutions recently, I can understand why.

YOU DON’T SAY! “North Korea’s talk of a peace pact is aimed at buying time and continuing developing nuclear weapons so that it may be recognised as a nuclear state,” says South Korea’s Foreign Minister. So it took us 20 years to figure this out. But South Korea, having reverted to rational diplomacy and the protection of its national interests, also doesn’t want to be left on the sidelines of a U.S. peace treaty with North Korea, which is as understandable now as it was when Nguyen Van Thieu had the same fear.

QUESTIONS NO ONE ELSE IS ASKING: Maybe the point is academic now that the soldier in question is being softened up for the firing squad safely home again, but what the hell was a North Korean soldier doing out at sea alone in a small boat if he wasn’t trying to defect? I suppose in due course North Korean military intelligence will have the chance to fully explore its theories for that.