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N. Korea shows signs of monetary reform: experts

All Headlines 16:33 August 28, 2012

SEOUL, Aug. 28 (Yonhap) -- North Korea may be preparing monetary reform as a way to fix its moribund economy, analysts said Tuesday, citing increasing academic publications and reports in the communist nation about the need for such reforms.

Experts say the latest signs seem to be aimed at stabilizing prices and currency value to gear up the economic reform envisioned by Kim Jong-un, a Swiss-educated leader who inherited a centrally-controlled economy in December of last year.

The Japan-based pro-North Korea newspaper Chosun Sinbo recently published a dissertation by an economics professor at Kim Ilsung University, in which he suggested Pyongyang should tighten its reins over the financial sector.

"By strengthening the state control of the financial sector, (the North) should achieve stable economic growth," wrote Prof. Kim Eun-chul, who teaches at the prestigious university named after North Korea's founder and grandfather of the current leader Kim Jong-un.

A business magazine based in the North also published a thesis stressing the importance of controlling the money in circulation.

In the latest edition published on July 30, the magazine carried a research paper that advised the central bank to recollect currencies circulated among North Korean residents "on time" to establish a stable monetary system.

The reports are in line with the latest changes reported by several media outlets, including wage hikes for workers, easing tight controls over output and letting production units become self-supporting.

North Korea watchers gave a similar assessment about the communist state's latest move.

"North Korea is reinforcing the status of its central bank, while working on weakening the power of banks controlled by the military and the Workers' Party of Korea," a source familiar with the North told Yonhap News.

NK Intellectual Solidarity, a Seoul-based defectors' group, last week reported Pyongyang is preparing a new economic organization with finance and accountant experts driven by the Cabinet, from earlier this month.

Pyongyang in 2002 introduced limited reforms but lost momentum three years later, apparently fearful of loosening the regime's grip. Most recently, it unsuccessfully pushed for the redenomination of the currency in 2009, but the botched attempt caused massive inflation and worsened food shortages.


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