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N Korea Cracks Down On Free Enterprise

From the UK’s Times:

North Koreans in misery as cash is culled

December 2, 2009

Shops and markets in North Korea have been closed and all cash transactions frozen after the Government’s shock announcement of a devaluation of its currency in an effort to crack down on the country’s burgeoning free-market economy.

In the capital, Pyongyang, yesterday only the few shops and restaurants permitted to trade in foreign currencies — patronised by the privileged elite and the city’s small foreign population — were open for business. All other enterprises and services based on cash, including markets, long-distance bus services, barbers’ shops, saunas and bath houses, were suspended until the revaluation of the won is completed next week.

There were reports of public outrage and confusion after the announcement of the measure, which requires North Koreans to swap existing won notes for new ones at an exchange rate of one to 100 — effectively knocking two zeroes off their value. Because of a cap of 100,000 won per family (£475 at the official exchange rate), anyone with significant holdings of cash will have their savings wiped out.

“Loud sounds of weeping in every house have not ceased since the news was released,” a South Korean website quoted an inhabitant of Sinuiju, a city on the border with China, as saying. “Weeping and fighting between couples has not stopped anywhere. The atmosphere of the city is terrible now.”

The website, dailynk.com, said that one elderly couple had killed themselves in North Hamgyong, a province adjacent to the Chinese border across which much illegal trading is carried out. It also reported anxiety among local officials that the currency revaluation would provoke civil unrest…

The announcement was made on Monday via a closed-cable broadcasting system that is piped into all North Korean homes. It was not reported in the state media but was confirmed the following day in briefings to foreign diplomats in Pyongyang, who were summoned to the Foreign Ministry at 20 minutes’ notice.

“It came as a great surprise to everyone,” one Western diplomat in Pyongyang told The Times. “Everything closed — no notice given. When we made inquiries we discovered it was because the currency was no longer valid. It’s really quite dramatic.”

Households have been told that if they surrender their cash holdings this week, they will be given the new notes from Monday. Some reports suggested that, after protests from members of the elite, the limit on cash exchange had been raised to 150,000 won, and 300,000 won in bank deposits that would be made available after investigation into their source.

“One of the worries our North Korean staff have is whether they will have enough food to get through to next week,” the manager of a foreign organisation in Pyongyang said. “Our employees have access to foreign currency but most people don’t and they could be in trouble.”

The absence of commerce and its attendant clutter is one of the things that makes Pyongyang so unique among national capitals. Despite free-market reforms, most people still receive their basic food allowances from their workplace and, although there are shops and markets, they do not dominate, as they do in most modern cities.

The biggest shops, such as the No 1 Department Store, appear to be little more than showcases, intended to create a false impression of plenty and choice for the benefit of foreign visitors. The few examples of advertising to be seen in the city emphasise the absence of real capitalist activity. There are a handful of billboards for a car; a Fiat assembled under North Korean licence and never actually seen on the empty roads…

The last time North Korea revalued its currency was in 1959. It changed its bank notes in 1992 but at a rate of one to one. As much as 300 won per person could be changed, with as much as 20,000 won accepted as savings deposits. In the end, though, much of that money was reportedly kept by the state-run banks.

This effort to stamp out free enterprise sounds vaguely familiar.

Speaking of which, notice the name of the North Korean currency.

Something tells us we are going to have our own re-evaluation of ‘The Won’ pretty soon.

(Thanks to BillK for the heads up.)

This article was posted by Steve on Thursday, December 3rd, 2009. Comments are currently closed.

8 Responses to “N Korea Cracks Down On Free Enterprise”

  1. BillK says:

    Democrats must be drooling at the prospects.

    From the Times of London:

    North Koreans in misery as cash is culled

    By Richard Lloyd Parry

    All cash transactions in North Korea have been frozen after the Government’s shock decision to revalue the won currency in an effort to crack down on the country’s burgeoning free-market economy…

    http://www.timesonline.co.uk/tol/news/world/asia/article6940482.ece

    See, that’s one way to get prices down!

    Gotta nip that free market economy in the bud – look how much damage Obama says it’s caused the United States!

  2. BannedbytheTaliban says:

    The democrats are a little more subtle in the confiscation of money in America. They call it taxes.

  3. Liberals Demise says:

    Don’t tell me that Barry doesn’t have a direct commie “TIP” line set up.

  4. Petronius says:

    “Weeping and fighting between couples has not stopped anywhere. The atmosphere of the city is terrible now. . . . one elderly couple had killed themselves in North Hamgyong . . . . anxiety among local officials that the currency revaluation would provoke civil unrest.”

    Who is John Galt?

    This story is truly shocking. Absolutely bone chilling. A nightmare world become real, factual, and final . . . like a strong, real-life dose of “Atlas Shrugged.”

    Terrifying. Confiscating private wealth across the board, on a national scale. In one fell swoop. As wicked as any redistributionist scheme concocted by Saul Alinsky and other Liberal heroes. More wicked even than their schemes to ration health care to seniors.

    It also serves as a timely reminder of the risk inherent in all paper assets. As we watch the US dollar sinking like a stone on world markets. As we see the price of gold soaring over US$1,200 an ounce. Because this nightmare is revealed truth.

    Petronius learned long ago: When Liberals come to power, there are few things you can count on in the New Normal. But chief among those things that prosper under Democrat regimes (aside from the robber gangs themselves) are precious metals, commodities, Swiss francs, and Swiss bonds.

    Note that one of the very first measures undertaken by Nerobama and Tigellinus-Holder was the crack down on foreign bank accounts.

    • beautyofreason says:

      North Korea also ran a bone – chilling government campaign to encourage the people to eat grass for nutrition, because people were starving to death. Several human rights activists who escaped into other countries claim that North Korean vendors used to sell human cadaver parts in the market to cope with starvation but I cannot verify that claim.

      In any case, comparing the North Korean slaves to their taller, yet genetically identical neighbors in South Korea should provide enough proof that capitalism works wonders but too much government control over the marketplace and paychecks creates a new sort of hell.

      If only our elected representatives would get it, rather than drive us down the socialist road. We won’t end up like North Korea but I don’t want to become the tax happy, politically correct, nationalized Britain any time soon.

  5. proreason says:

    The wee despot is reading the Obamy playbook.

  6. Tater Salad says:

    North Korea is no different than the Obama adminstration:

    http://therealrevo.com/blog/?p=16267#comment-20615

  7. Right of the People says:

    Steve,

    I’d love to see The Won™ on our money. They don’t call them “Dead Presidents” for nothing you know.


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