North Korea has reportedly been suffering from aftershocks of a currency reform enacted late last year. Pyongyang implemented the currency revaluation on November 30th, 2009, exchanging the old won against the new won at the rate of 100 to 1. The economic measure was apparently aimed at overcoming economic difficulties and stabilizing the nation’s power transfer scheme. But the belated notification of state-set prices crippled the normal operations of stores, and the subsequent market closure resulted in skyrocketing commodity prices, worsening the livelihoods of ordinary citizens. A ban on the use of foreign currency, in particular, only deteriorated the already severe shortage of supply. According to Cho Bong-hyeon, researcher of the Economic Institute at the Industrial Bank of Korea, the North Korean economy is now in great turmoil.

It’s been three months since North Korea introduced its currency reform. The nation has since been plagued by serious side effects, rather than restoring stability. In the wake of the currency revaluation, North Korea strictly controlled the market despite the inadequate state-run supply channels. As a result, North Korean people found it increasingly difficult to obtain commodities, and the society plunged into utter chaos. The purpose of the currency reform was to curb inflation. Contrary to the expectations, however, the reform measure added more fuel to soaring prices. It seems that the capital city of Pyongyang is recovering from the aftermath little by little, but the situation is still serious in local provinces. The citizens’ smoldering discontent is finally exploding.

Citing the economic turmoil triggered by the currency reform, some suggest the possibility of a popular uprising inside North Korea. North Korea watchers say citizens’ loyalty to their dear leader Kim Jong-il and the Workers’ Party might be weakened and the North Korean leadership could be embroiled in political rivalry. Should the economic difficulty lead to riots, the military authorities may resort to military force for the sake of regime maintenance. If the crisis causes a regime change, the military could face internal conflict. Mr. Cho predicts the monetary reform will have a significant impact on North Korea’s prospective power succession to Kim Jong-il’s third son, Kim Jong-un.

The currency reform will almost certainly end up being a failure, and the process of the power transition to Kim Jong-un will be delayed to some extent. The issue of power transfer can be raised at the Workers’ Party or at the parliament only after the economy is stabilized. It may spawn severe public criticism to bring up the power succession issue now, with the economic problems still up in the air. If North Korea had supplied sufficient goods through a national rationing system or state-run stores after the currency reform, the citizens would not have been thrown into such chaos. Unfortunately, the nation pushed for the currency revaluation without sufficient preparation, causing a variety of aftereffects.

In the meantime, North Korean authorities are reportedly struggling to quell public unrest stemming from the botched currency revaluation. Sources say North Korean Premier Kim Yong-il apologized for the reform’s failure and the side effects of the market closure in a meeting with party officials at the People’s Palace of Culture in Pyongyang early this month. It is said Kim also asked them to faithfully follow additional measures. Experts say the unusual apology indicates the North’s urgent situation. Also, North Korean leader Kim Jong-il dismissed Park Nam-gi, head of planning and economy at the Workers’ Party, for his role in enforcing the revaluation. The move is also interpreted as a means to ease the worsening public sentiment. So then, how will the economic turmoil in North Korea affect relations with South Korea and inter-Korean economic cooperation?

In the course of stemming the ongoing social and economic confusion, the North Korean military and hard-liners may tighten their grip on the nation. If that happens, it may create tension in inter-Korean relations since they view bilateral ties solely from a political standpoint. On the flip side, however, North Korea might be willing to take Seoul’s hand for economic cooperation because it is keenly aware of the economic problems caused by the failed reform. I imagine North Korea will seek to maintain the Gaeseong Industrial Park on a stable basis to earn foreign currency through its laborers working at the joint industrial park. The North will also try to secure foreign currency by resuming the suspended South Korean tours to Mt. Geumgang and Gaeseong. For that purpose, North Korea may send a conciliatory gesture to the South.

Diplomatic experts stress that North Korea needs to closely cooperate with the outside world in order to overcome the economic difficulty derived from the unsuccessful reform. The communist nation has strained to resolve the shortage of goods of late, putting top priority on the development of the light industries and agriculture. Given the current economic conditions, however, it will be far from easy for North Korea to resolve the situation on its own. The nation must increase supply from the outside. Experts agree that the topmost task is, therefore, to improve relations with the United States, through finding a solution to the nuclear issue. Here again is Mr. Cho.

The international community imposes various sanctions against North Korea. The North should give up its nuclear development first before being freed from the sanctions. To this end, North Korea must return to the six-party talks and show its commitment to denuclearization. The international community will then provide more humanitarian aid and will be more positive about global cooperation for the development of the North. This is one of the answers to the problems of the North Korean economy. Once the U.S. lifts part of sanctions on North Korea and resumes investment in the communist nation, other nations in the international community will follow suit. At the moment, improving ties with the U.S. is the utmost priority for North Korea.

The ongoing economic tumult in North Korea is seen as a crisis but it may prove to be an opportunity at the same time. North Korea should not forget the important task of nuclear dismantlement in order to stabilize its economy as early as possible and strengthen relations with the international community.


[Interview] N. Korean Defector Practices Oriental Medicine in S. Korea
With the number of North Korean defectors arriving in South Korea ever increasing, more and more North Korean newcomers are seeking professional careers. One such defector is Park Su-hyeon, who runs the “Mt. Myohyang Oriental Medical Clinic” in Seongnam, Gyeonggi Province. He completed a doctoral dissertation on the effect of tangerine peels and the root skin of Chinese matrimony vines on easing stress, becoming the first North Korean defector to acquire a doctorate degree in Oriental medicine. He was awarded the degree at Kyungwon University on February 23. Let’s meet Dr. Park.

When I discovered my dissertation passed screening, I was so happy that it felt like I was flying in the sky. I had already worked as an Oriental medicine doctor and I had no problems treating patients and earning a living. But I thought my patients could trust me more deeply if I had a doctorate degree. Now that I have achieved recognition, I’m happy to return what I have to my patients as much as I can.

Park also became the first North Korean defector-turned-Oriental medicine doctor in 2001. He studied Oriental medicine at Cheongjin Medical School in North Korea before escaping his home country in 1993. At the time, he never really thought about becoming an Oriental medicine doctor in South Korea. One day, he bought herbs at the Gyeongdong Market to put together some medicine for a detective suffering from prostatitis. That’s how Park came to study Oriental medicine once again.

Upon arriving in South Korea, I was met by a detective who was supposed to monitor me. He was suffering from severe prostatitis. I went to the Gyeongdong Market with him and prepared for a medicine for him. After taking the medicine, he was completely cured of the disease! He urged me to study Oriental medicine and tried every means to admit me to a college. He consulted the Education Ministry and visited an office in charge of North Korean defectors. Owing to his gracious help, I was admitted to an Oriental medicine school.

Thanks to the continuous assistance from people around him and his own resolute will, Park graduated from the Oriental medicine curricula at Kyung Hee University. But it wasn’t easy at all to become what he is today. After graduating from the university, he completed a two-year master’s course. But the English exam, which is a prerequisite for a master’s thesis, was a major stumbling block. Unlike other classmates who easily passed the English exam, Park failed in the exam continuously as he had never received a proper education in English in North Korea. It took five years for him to receive a master’s degree. Three years later, he finally earned a doctorate degree. Park says it was also challenging for him to adjust to a different method of studying and perceiving Oriental medicine.

In North Korea, medical students collect herbs for two months in spring and one month in fall. From early in the morning, they climb up to the top of the mountains to gather medicinal herbs in a big gunnysack. After two months of herb-collecting, they come to learn almost all kinds of herbs. But South Korean students do not study the herbs in that way. In North Korea, hospitals and clinics have both Western and Oriental medicine departments. The Western medical sections lack medicines and equipment, and many patients come to Oriental medicine doctors. In contrast, South Koreans seem to prefer Western medicine. That is, South Korean patients depend on Western medicine for treatment, and Oriental medicine for health supplements.

Whenever the doctor was confronted with difficulties, he renewed his determination to take firm root in South Korean society, bearing in mind his dream and his fellow North Korean expatriates who would come to South Korea later. Now that he has obtained a doctorate degree, he remembers what it felt like to start practice as an Oriental medicine doctor ten years ago. He says he will never forget his original resolution.

I’m no longer a recipient but I’m in a position to give things to other people instead. I should use my skills to help people relieve their pain. I’m trying to be kind to my patients, using warm words, smiling and making them laugh, so they become stable psychologically and forget their pain, even if only for a short while. I’ll always remember the first aims and intensions I had. I hope to be a kind doctor.

Dr. Park has committed to opening the door of unification through his medical skills. His generous smile and kindness show his deep dedication to his humanitarian calling.