Category: NK Economics

Speaking on the failure of North Korea’s attempt to reconsolidate state control over the economy, Noland concludes with this: The underlying political stability of that regime, I think, is starting to be called into question. Noland emphasizes how difficult it is to confirm reports of civil unrest in North Korea, but I think there’s sufficient evidence for us to conclude that North Koreans are questioning and challenging their government more openly than ever.

[Update: Kushibo notes that North Korea has started lifting market restrictions. Rice prices and exchange rates have begun to stabilize. The confiscation is done, but does this mean the regime is backing down? That would mean that change is irreversible, and that the regime has just surrendered much of its control over the economy. And just to thank Kushibo for re-posting his comment after I stupidly deleted it, I’ll recommend you read his post on the sacking of Pak Nam-Ki....

Why did North Korea believe that it could reestablish a socialist economy despite international sanctions? According to Open News, the men in the palace were expecting a substantial infusion of sanctions-busting cash from the Chinese: North Korea expected to receive a financial aid of more than a hundred million yuans from china once the currency reform was in place, so that it provides better supply of goods. And, this is why North Korea had informed China of how and when...

The wire services continue to report that conditions just keep getting worse for North Koreans, but the latest dispatch from Good Friends adds extensive detail to the hyperinflation story, and how it’s affecting the ability of people to get food: This is the sort of reporting that Good Friends typically does well. We’re used to seeing North Korea’s corn-eaters going hungry, but I always watch for signs that the elite, the military, and other rice-eaters are sharing in the misery:...

Even for North Korea, this idea sounds too strange to be true: Therefore, Japanese cars are no where to be seen in North Korea. According to the source, Japanese cars are now supposed to be destroyed. Except, cars over 20 thousand tons, graters, and other weighty mechines will not be destroyed. These machines, however, willl only be operated at nights. [Open Radio] No doubt, this would do wonders for that “great and powerful socialist economy” the North Koreans are on...

[Update:   Blaine Harden has a must-read story in the Washington Post:  “[T]he government’s action appears to have backfired, with potentially disastrous consequences in a country that is chronically short of food.  The black-market value of “new” won has reportedly plummeted against Chinese currency, spooking private traders who have pulled their goods out of markets. Outside economists say suspicion about the value of the won has made residents wary, increasing economic stagnation and worsening food shortages.”] In my in-box today...

Reading of North Korea’s new plans for yet another trade zone, just as the Kaesong experiment collapses, must make some observers wonder what Kim Jong Il could be thinking: who could possibly expect to attract significant foreign investment with such uneven policies toward investment? My response: they don’t want to attract significant foreign investment. That would require some significant opening of their economy and the lowering of the state’s vigilance against the subversive power of ChocoPies. North Korea’s foreign investment...

The Seoul-based Open Radio for North Korea (ORNK), citing unidentified sources along the Sino-North Korean border, said that merchants were exchanging one yuan for 1,000 new North Korean won as of late last month, plummeting from the 50 won traded for every yuan on Dec. 3, right after Pyongyang introduced the new currency. [Yonhap] If my math is right, that’s 1,000 percent in less than a month. Under the move, the communist country knocked two zeros off its currency without...