N. Korean economist says currency reform helped fill state coffers

SEOUL, Jan. 23 (Yonhap) -- A top North Korean economist said Saturday his
communist country secured a monetary base that will underpin efforts to raise
living standards when it carried out a currency reform last year.

Pyongyang said the currency redenomination, which knocked two zeros off its bank
notes, was aimed at curbing inflation, while analysts said the regime was trying
to emasculate a growing merchant class and reassert control over market
activities.
The revaluation, conducted in November, helped "implement socialist economic
principles better and create a monetary base that can bring about a leap in the
standard of living for people," Kim Chol-jun, chief economist at North Korea's
Academy of Social Sciences, said in an interview with Chosun Sinbo, a
pro-Pyongyang paper in Tokyo.
In its New Year's message, North Korea vowed to boost light industries and
agriculture and increase basic supplies in an apparent effort to bolster its new
currency.
Years of economic mismanagement have brought the North Korean economy to a near
halt, leading the regime to lure assistance by offering to dismantle its nuclear
ambitions under a six-nation deal.
The talks, which group the Koreas, the U.S., Japan, Russia and China, have
remained stalled for more than a year during which the North conducted its second
nuclear test and launched a long-range rocket that could be converted into a
ballistic missile.
A ranking Unification Ministry official in Seoul told reporters earlier this
month that the currency reform in the North "was still under way," suggesting the
regime was taking steps to empower its new currency and state-run shops and crack
down on unregistered trade.
On Wednesday, official media in Pyongyang reported that leader Kim Jong-il
ordered the establishment of a state bank dedicated to development projects. The
report came about two weeks after the North said it had upgraded the status of
Rason, a free trade zone near the border with China and Russia, to that of a
special city.
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