The DPRK's [Democratic People's Republic of Korea aka North Korea] is backstepping from its demonetarization of the won. The move has proven ill advised but not without warning. An article in a North Korean economic review, under the signature of Kim Jong il's sister, in September, gave warning that monetary reform was coming on close heels.
The Korean Workers' Party and possibly high ranking military had an 'early warning' that change was imminent, to the extent that Pyongyang wanted to swiftly regain control of its money supply, including foreign currency, and with a sharp blow, knock the wind out of loosening of control on the market.
It did not count on limited scenes of riots in the market place, an unreported backlash among the 'core' group that forms the backbone of support of the DPRK, which the reevaluation of the currency hit hard.
As immediately proclaimed, Kim Jong il's government modified the decree, weakening it to what extent outsiders might ever know. And a scape goat was found in the person of Pak Nam gi chief of the finance and planning department of the Workers' party. He was blamed for the sharp increase of food prices in a country which is still suffering from years of bad harvests, and of course, instances of social unrest in a society which boasts of law and orderliness.
We know very little of the inner workings in the DPRK, but one thing, we do know is that decisions are never made by a single authority, collectivism reigns although the 'Dear Leader' can and does modify or overrule them, depending on the occasion.
Rumour has it that after Mr. Pak's disgrace, in the higher echelons of the nomenklatura, some, albeit unnamed, found themselves out of a job, downgraded, or shifted to the provinces, and others, also unnamed, came into favour to stem the fallout of the monetary reform.
GuamDiary has already reported on the Petersen Institute's senior economist Marcus Norland's talk at the New York Korea Society. Dr. Norland hit the right notes on the reform's immediate consequences, on the hardships encurred, and took too task Pyongyang's unwillingness to embrace 'free market reforms' which China and Vietnam had done.
The DPRK is not China, nor is it Vietnam. Furthermore, one thing is crystal clear, the DPRK is got trashing the mechanisms of a planned economy. Still, as even Mr. Norland observed in the provinces of North Korea, thanks to a relaxation of Pyongyang's central control, experimentation in 'liberalising the market' has taken place. More on the order of a cooperative nature than as critics of North Korea would like to describe it, for they almost to a man, see hope only in laissez faire, free market capitalism.
Pyongyang's rude awakening and swift rush to remedy the situation, does indicate that willy nilly, like it or not, market reform continues taking place in the DPRK, no matter what.
It goes without saying that the central government in pursuit of its own interests wants to appropriate it, However, here's the rub, to the outside world, no one really knows of internal debates, the clash of ideas for or against reform, etc. etc.
Nonetheless, this has not stopped economists formed in the old Peoples' Democracies of eastern Europe, who pursued graduate studies in Pyongyang, from writing, as they follow North Korea's political economy, from discerning, even 15 years ago, a slow, gradual evolution in the mechanics of the market in the DPRK.
Western critics take vicarious pleasure in stereotyping North Korean economists or political economy. And yet, Pyongyang is not unaware of 'bourgeois' economics. Remember they have a Swiss funded School of Business in the North Korean capital, which does teach capitalist economics, so on and on.
It is foolhardy to assume, yea presume, that somehow the DPRK is a fossil of another age, and klewless.
The Workers' party is binding its wounds, girding its loins for tomorrow's battle, to direct and lead the economy of the DPRK, in the direction that it sees the best for the country.
For outsiders, the difficulty lies in the opaqueness of the process which lends itself to wishful thinking, wild eyed speculation, and not necessarily to the patient work of reading material from the DPRK itself, and then trying to make good sense of it.