March 18th, 2010
10:28 AM ET

Report: N. Korea executes official over currency reform

A former top finance official in North Korea was executed over a currency reform that caused a number of problems in the secretive Communist nation, according to South Korea's official Yonhap news agency.

Pak Nam-gi was executed last week at a shooting range in Pyongyang, Yonhap reported Thursday, citing multiple sources. He was held responsible for "the country's currency reform fiasco that has caused massive inflation, worsened food shortages and dented leader Kim Jong Il's efforts to transfer power to a son," the news agency said.

Pak was chief of the planning and finance department of the ruling Workers' Party, Yonhap said. He was fired in January.

In December, North Korea revalued its currency, called the won, at a rate of 100 to 1, according to the U.S. State Department - the equivalent of lopping off two zeros, according to Time magazine.

In addition, according to the State Department, new laws were implemented including regulating consumption, tightening state control on the market and banning possession or use of foreign currencies. "The redenomination appears to have resulted in increased inflation and confiscation of wealth earned by private traders and others working outside state-controlled sectors of the economy," according to the department.

According to Time, the North Korean government gave citizens less than a week to exchange their old currency notes for new ones, and limited the amount they could exchange to 100,000 won, or less than $40 at black-market exchange rates, declaring that any amount above that would be worthless.

Following an outcry, the magazine reported in December, the limit was raised to 150,000 won in cash and 500,000 won in bank notes.
But, Time said, the reform stripped those who run small private food markets from the cash they need to run their businesses. Those private
markets developed across North Korea since a famine there a decade ago, the magazine said, and enable "an increasing number of North Koreans to feed themselves and earn a basic living by trading."

North Korea watchers in South Korea believe the change was implemented because of "a widening gap between the haves and the have-nots" in North Korea, and also to allow the Communist regime to regain control.

"Small traders and black markets existed outside of government control, and by definition at some point the regime was not going to tolerate that," Time magazine quoted analysts as saying.

A 2005 human rights report from the State Department said the North Korean regime had executed several "political prisoners, opponents of the regime, some repatriated defectors and others, including military officers suspected of espionage or plotting against Kim Jong Il" in recent years.

In April 2004, the government enacted a new code that provided for execution for only the "serious" or "grave" cases of four "anti-state" or
"anti-nation" crimes, the report said. Those crimes included participating in a coup aimed at overthrowing the government; acts of terrorism "for an anti-state purpose"; treason, which included defection or giving state secrets; and "suppressing the People's Movement for national liberation."

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Filed under: North Korea
soundoff (114 Responses)
  1. Scott in NH

    North Korea is by far the most different country on earth. Nothing else is like it. No other nation in the world is even 1/1000th as closed off as North Korea. So... the people don't know that in other countries the electricity stays on at night, or that there is enough food. They have no idea that such things as the Internet and texting exits because they get no outside news or information. You need papers to travel between towns and most people can't afford a bicycle.

    There are two exceptions to this. The people who live in SinÅ­iju can look right across the Yalu river and see Dandong China. They can see people strolling from restaurant to restaurant, street performers, lights at night. They cal also see a whole lot of guards who will shoot them if they go for it. Many do try and make it into China.

    The other exception is the southernmost part of NK where there have been economic reforms and factories opened by South Korea in Special Economic Zones like Kaosong. They have some new things there that the rest of North Korea doesn't, like convenience stores, and enough food.

    March 18, 2010 at 10:11 pm | Report abuse |
  2. james

    China is also a problem. The Chinese government helps North Korean government to round up people exited from NK. When they are back to NK, punishment up to death sentence is waiting for them.

    March 18, 2010 at 10:14 pm | Report abuse |
  3. Scott in NH

    American tourists who have been recently (yes, Americans can go to NK and a few do) report that the soldiers look as gaunt as the rest of the people, that they are paid almost nothing and only have food because part of being a soldier is the requirement to grow your own food.

    I don't think it is a case of they give everything they have to the military and therefore the rest of the country is poor. I think their economy is on the verge of collapse and everyone there is poor, even party hacks in Pyongyang.

    March 18, 2010 at 10:16 pm | Report abuse |
  4. Mike

    makeme, you obviously have no clue what real struggle is. Live in a 3rd world country for a day and then talk about how hard we have it in the US.

    March 18, 2010 at 10:29 pm | Report abuse |
  5. orin

    Well, it's a pressure cooker with the lid on. When it blows it'll be a doozy. Think "The National Razor"

    March 18, 2010 at 10:44 pm | Report abuse |
  6. Shocked

    Why have all of you answered Norm's question? Was his question not answered within the first 10 replies? I mean it's great that so many people have replied, but come on now. I'm reading the same answer about 20 times. Oh and BTW The Vice Guide to North Korea was great 🙂 Shocking at how these people actually live.

    March 19, 2010 at 12:49 am | Report abuse |
  7. Bart

    The really sad thing is that 40 years from now college students and liberal professors will be wearing Kim Jong II t-shirts.

    March 19, 2010 at 8:31 am | Report abuse |
  8. Boer

    I don't think this report has been confirmed. At best, it's just rumor.

    April 12, 2010 at 4:41 pm | Report abuse |
  9. Paul

    For anyone interested, there's a book on the web called 'A Year in Pyongyang'. It details the life of an Englishman I North Korea around the end of the 80s before things really went to hell (but there were signs of the coming collapse in the 90s). Very readable considering how disturbing some of the things he says are.

    May 2, 2010 at 6:10 am | Report abuse |
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