North Koreans who recently fled to China say many of their fellow citizens are losing faith in the regime of Kim Jong Il after a disastrous currency revaluation that wiped out savings and left food scarcer than at any time since the famine of the mid-1990s, when up to 2 million people died.
“People are outspoken. They complain,” said a 56-year-old woman from the border city of Musan who gave her name as Li Mi Hee.
Lowering her voice to a whisper, she added: “My son thinks that something might happen. I don’t know what, but I can tell you this -- people have opinions. . . . It is not like the 1990s when people just died without saying what they thought.”
Li was one of five North Koreans from different parts of the country interviewed this month near the border with China. Using pseudonyms, as many North Koreans even outside their country do to protect family members from retaliation, they told of panic in the wake of the bungled economic move, which left even a staple such as rice in the hands of black marketeers and sent the communist government scrambling to repair the damage.
“The whole economic structure has collapsed because of the currency reform,” said James Kim, a Korean American educator and president of the Yanbian University of Science and Technology in Yanji, China, who is in the process of setting up a similar school in Pyongyang, the North Korean capital. “It is a very difficult situation for them. . . . It might end up being worse than the 1990s.”
The economic disarray comes at a delicate time for North Korea as the 68-year-old Kim Jong Il, suffering the effects of a reported stroke, tries to pass the reins of power to his youngest son, Kim Jong Un, a little-known figure who is in his 20s.
In the last few months, officials of the ruling Korean Workers’ Party have been quietly told that the younger Kim is the designated successor; and many expect that his photograph will soon be hung next to the mandatory portraits of Kim Jong Il and his father, Kim Il Sung.
“If his father is doing such a bad job, what can we expect of his son?” Li said.
Trying to deflect public anger, the government reportedly executed the senior bureaucrat who was the architect of the currency revaluation. South Korea’s Yonhap news service reported last week that Pak Nam Ki, 77, chief of planning and finance for the Korean Workers’ Party, had been shot by a firing squad in Pyongyang after being charged with “deliberately ruining the national economy.”
Party officials have also issued rare public apologies over the mishandling of the currency, North Koreans say.
“They apologized, but it didn’t do us any good. People already had lost all their money,” said Song Hee, a 17-year-old from Musan. She said party officials in Musan went door to door, speaking to neighborhood leaders of the inminban, or “people’s committee,” about the economic mistakes.
The teenager fled last month after the revaluation wiped out the cash her parents had been saving in hopes of sending her to college.
“My friends would leave too if they could. They see no future in North Korea,” Song Hee said nervously, her bangs slick with sweat across her forehead.
Before the revaluation, Song Hee said, her mother had been eking out a modest living selling cheap socks, keeping the family reasonably well fed.
North Korea announced Nov. 30 that it was issuing new currency and that the old currency would become invalid. People were permitted to trade in their old money for new, but only what would be worth about $30 on the black market. (The limit was later raised.)
Unlike in Pyongyang, where people had seven days’ notice, the switch-over of the currency took place within 48 hours in Musan, Song Hee said.
“People were in shock. Our money was becoming like water. With the psychological stress, many people had to go to the hospital,” she said.
As far as she knew, nobody dared to disobey the order for fear of punishment.
“We were told that somebody decided he would burn the money instead of giving it to the government. The money had the picture of Kim Il Sung, and because he burned it he was shot to death for treason,” Song Hee said.
The idea behind the currency exchange, economists say, was to confiscate the cash of people who had become relatively rich selling on the private market and to restore the equality espoused by the communist system.
“They wanted to make everybody the same,” said Choi Kum Ok, a 54-year-old member of the Korean Workers’ Party who left North Korea’s Yanggang province in mid-December to work in China. Choi, who said she remains loyal to the regime, nonetheless acknowledged that the economic reform had backfired.
“There is no food and what there is has become unaffordable,” Choi said.
Immediately after the currency revaluation was announced, police shut down the markets where people had been buying most of their food. In theory, people were supposed to be now buying it from state stores at subsidized prices. But the state stores had no food and people were forced to scrounge for whatever they could purchase at exorbitant prices from black marketeers.
By the end of December, North Korean authorities had retracted the ban on markets. But the merchants had lost all their cash and couldn’t restock their merchandise. Meanwhile, the Chinese traders who had previously supplied markets didn’t want to come into the country because of bans imposed on the use of foreign currency and the wildly fluctuating exchange rates.
Food remains in such short supply that a single egg costs a full week’s salary. Rice remains largely unavailable at state stores and can be purchased only illegally at about the equivalent of more than two weeks’ salary. One North Korean woman interviewed said common laborers under the new system were making about 2,500 won per month, barely more than $1 at the new exchange rates prevailing on the black market. Cooking oil is a luxury, so unaffordable that people buy only a few grams at a time in small plastic bags.
Markets are said to have less than one-third of the merchandise they stocked before the reform.
The economic misstep comes on the heels of a disappointing 2009 harvest and ahead of a 2010 one that is also shaping up to be lean because of declining donations of fertilizer and seeds from South Korea.
The scarcities are spreading to the more privileged in North Korea. An aid worker who visits regularly said that on a trip this month, officials begged him to bring in food the next time.
“I usually bring a bottle of Scotch as a gift -- they really enjoy it -- but this time they said, ‘Why didn’t you bring in rice instead?’ ” said the aid worker, who asked not to be identified.
Even the relatively privileged capital has been affected.
“We live in one of the richer parts of the country. Things were OK for us around 2004, but now they’ve gotten bad again, maybe worse than before . . . people are starving to death,” said Su Jong, 28, who is from Pyongsong. The city, on the northern outskirts of Pyongyang, is home to many of North Korea’s top science institutes and to the largest wholesale market.
Although Su Jong held North Korea’s own economic policies at fault, she said she had not lost her love for Kim Jong Il.
“If [Kim] was a good leader, we wouldn’t see children starving, people wandering the streets in rags, the markets with no food,” she said. “But I don’t doubt his good intentions. It is the people under him who are corrupt.”
It was a common sentiment among the North Koreans interviewed in China, several of whom said they weren’t defectors and hoped to return to their country.
North Koreans live under a cult of personality in which members of the Kim family are demigods with unsurpassed skills at everything from golf to metallurgy and, of course, economic management. During the 1990s famine, North Koreans were largely persuaded by propagandists that U.S. sanctions were to blame for their troubles.
“In China, people use bad words to criticize the government,” said Jeong Hee Ok, 50, who left the east coast city of Hamhung in mid-December to work as a maid in China. “But I come from North Korea -- even little children know you are a bad person if you talk that way about the leadership. It is hard to change that mind-set.”