Angry 'aunties' could be Kim Jong-il's nemesis
The middle-aged 'aunties' who tend vendor stands - which are among the few things in the North Korean economy that work - are close to revolt against the regime of Kim Jong-il.
This month, the government did three things that have roused the normally docile vendors:
It called in all existing currency and replaced it with new money in which two zeros had been lopped off. What had been 1,000 won became 10 won. Supposedly, the new 10 won would buy the same amount of food as the old 1,000 won. Prices weren't supposed to rise, but whiffs of information seeping out suggest they have soared.
The government limited the amount of old won that could be exchanged for new won, first to 100,000, then relented and let each person exchange 500,000 won. At the official exchange rate, that would have been US$740 and US$3,700, respectively. Since the revaluation, the black rate for US dollars has soared to about 3,500 won.
Communist Party leaders, seeing widespread anger, especially among the vendors, and riots in several cities, called on the army to maintain order. Unconfirmed reports said soldiers were ordered to shoot anyone violating the new currency regulations that also forbade North Koreans from holding yuan, US dollars, Japanese yen, or other foreign currencies.
The purported intent was to streamline the currency so that people need not handle bills of large denomination. It was also intended to curb inflation, although how was not clear. The unspoken objective was to stifle the small but effective middle class of merchants who operate outside economic controls. But the exchange was done clumsily and turmoil ensued.
This chaos, coming atop a raft of other political and economic issues, raised an intriguing question: has the long-speculated implosion of the North Korean regime begun?
An economics professor at the University of Vienna, Rudiger Frank, wrote recently: 'The experience of other formerly socialist societies has shown that frustration and discontent silently accumulate until they reach a level that Lenin would call a 'revolutionary situation'.'
The existence of the private vendors has been, in itself, evidence of economic flaws; most North Koreans rely on them for food and daily necessities because the government's distribution system doesn't work. Even communist officials have been spotted shopping in the underground markets.
In what is probably the largest single marketplace, south of Pyongyang, there are some 5,000 vendors. Another market has about 1,500 stands, many selling second-hand goods smuggled from Japan. Guards meant to keep customers away are open to modest bribes.
These markets were closed for three days, and factories and business offices shut for a week, while the currencies were swapped. Meanwhile, the official Korean Central News Agency exhorted the people: 'Let us devotedly defend the party and the leader by winning a victory in the drive for effecting a great revolutionary surge.'
Richard Halloran is a former New York Times foreign correspondent in Asia and military correspondent in Washington
