N. Korea struggling in currency revaluation aftermath: scholars

By Yejin Lee
SEOUL, Feb. 18 (Yonhap) -- With North Korea's currency revaluation having
resulted in failure, the endurance of the communist country's system has been
greatly damaged, and whether or not the system can continue to exist depends upon
the political attitude of the North Korean people, analysts here said on
Thursday.
"The failure in North Korea's currency revaluation brought about severe damage to
the endurance of the North Korean system," said Baek Seung-joo, a North Korea
researcher from the Korea Institute for Defense Analyses, during a debate held in
the National Assembly under the title, "What is happening in North Korea?"
"They have not prepared detailed measures to take in case they face the
after-effect of a possible failure," he added in the debate, arranged by Rep.
Song Young-sun, who belongs to the National Assembly's foreign and unification
affairs committee.
Baek explained that because the revaluation failed, "the moral bond that
connected the North Korean leader to the people has been weakened." He also said
that "whether or not North Korea will be able to maintain its system depends
upon how North Koreans will change their political attitude."
North Korea conducted a currency revaluation in November, knocking out two zeros
off its bank notes. The reform was aimed at curbing inflation but ultimately
backfired, aggravating the situation, according to reports. Prices in North
Korea have jumped more than tenfold since the reform, causing widespread
economic distress, they said.
"North Korea is caught in a 'trap of poverty.' If they are to get out of the
trap, they need an annual economic growth rate of 8 to 10 percent for the next
five years," said Cho Myung-chul, a researcher at the Korea Institute for
International Economic Policy and a former economics professor at Kim Il Sung
University in Pyongyang.
Cho said that North Korea "is currently incapable of bringing about economic
growth without foreign help."
Park Young-ho, a researcher at the Korea Institute for National Unification,
said, "North Korean people's fatigue with the state system, the after-effect of
the currency revaluation and an inflow of information from the outside world will
weaken the effect of North Korean style of coercive rule."
karenlee@yna.co.kr
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