North Korean Premier Apologizes Over Controversial Currency Revamp

February 10, 2010 - 10:27 PM
In a rare public apology, a North Korean leader has reportedly expressed regret after a dramatic currency revamp triggered social unrest and worsened economic difficulties.
Kim Jong-il

North Korean leader Kim Jong-il visits a complex in South Hamgyong province in this undated photo released by Korean Central News Agency on Wednesday, Feb. 10, 2010. (AP Photo/Korean Central News Agency via Korea News Service)

Seoul (AP) – North Korea's premier offered a rare public apology after the country's recent currency revamp triggered social unrest and starvation and worsened economic difficulties, a South Korean newspaper reported Thursday.

In late November, the North ordered citizens to turn in a limited number of old bills in exchange for new, redenominated currency in an apparent bid to reassert its control over a growing market economy.

However, the measure triggered frustration among many people left with worthless bills while inflation surged because state-run shops couldn't keep up with demand. Some people have recently started dying of hunger in the country's desolate, mountainous northeast where authorities suspended food rations, activists and analysts say.

On Friday, Premier Kim Yong-il apologized for the aftermath in a meeting with government officials and local village leaders, the mass-circulation Chosun Ilbo newspaper reported, citing an unidentified source in North Korea.

"Regarding the currency reform, I sincerely apologize as we pushed ahead with it without a sufficient preparation so that it caused a big pain to the people," Kim read a statement during the meeting at Pyongyang, according to the paper.

Kim said the government "will do its best to stabilize people's lives," saying it will ease its curb on markets and re-allow the use of foreign currency, the paper said.

North Korea has banned the use of foreign currency following the currency redenomination, a senior South Korean official said on condition of anonymity saying the information involves intelligence-gathering activities.

South Korea's National Intelligence Service and the Unification Ministry said they couldn't confirm the Chosun Ilbo report. But Unification Ministry spokeswoman Lee Jong-joo said it would be "very rare" for a top North Korean official to issue a public apology.

Kim is believed to be the North's No. 3 man in the country's power hierarchy after autocratic leader Kim Jong-il and Kim Yong-nam, president of the Presidium of the Supreme People's Assembly, according to South Korean media reports.

Last week, South Korean media reported that leader Kim Jong-il sacked a senior communist party official who spearheaded the currency reform, following arguments within the country's elite over who should take responsibility for the fiasco.

Communist North Korea has relied on outside food handouts since the mid-1990s, when the economy collapsed due to natural disasters and mismanagement, and aid from the former Soviet Union dried up after the bloc's collapse.

The regime introduced economic reforms in 2002, including street and farmers' markets. But the government backtracked in 2006 after the reforms failed to revive the economy and resulted in an influx of foreign goods.