Inside Asia
Pyongyang Losing Grip on Economy
By JOHN RUWITCH and JU-MIN PARK | REUTERS
Published: June 3, 2013
CHANGBAI, China — Chinese renminbi and U.S. dollars are being used more
widely than ever in North Korea instead of the country’s own money, a
stark illustration of the extent to which the North Korean leadership
under Kim Jong-un has lost control of the country’s economy.
The use of dollars and renminbi has accelerated since a disastrous
revaluation of the North Korean currency, the won, in 2009 wiped out the
savings of millions, according to experts on the country, defectors and
Chinese border traders.
On the black market, the won has shed more than 99 percent of its value
against the dollar since the revaluation, according to exchange rates
tracked by Daily NK, a Seoul-based news and information Web site focused
on North Korea.
North Korea is one of the most closed countries in the world, so it is
difficult to determine what effect this could ultimately have on Mr.
Kim’s regime.
But experts say the growing use of foreign currency is making it
increasingly difficult for Pyongyang to implement economic policy,
resulting in the creation of a private economy outside the reach of the
state, which may be able to rein it in only with draconian measures.
For now, Pyongyang appears to be capitulating, rather than trying to stamp out foreign currency use, they said.Read more »»»
