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In N. Korea, a strong movement recoils at Kim Jong Il's attempt to limit wealth

Kim's battle over currency is seen by some as an attempt to buy time as he hands over power to his son.
Kim's battle over currency is seen by some as an attempt to buy time as he hands over power to his son. (Chung Sung-jun/Getty Images)

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By Blaine Harden
Washington Post Foreign Service
Sunday, December 27, 2009

SEOUL -- North Korean leader Kim Jong Il moved early this month to wipe out much of the wealth earned in the past decade in his country's private markets. As part of a surprise currency revaluation, the government sharply restricted the amount of old bills that could be traded for new and made it illegal for citizens to have more than $40 worth of local currency.

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It was an unexplained decision -- the kind of command that for more than six decades has been obeyed without question in North Korea. But this time, in a highly unusual challenge to Kim's near-absolute authority, the markets and the people who depend on them pushed back.

Grass-roots anger and a reported riot in an eastern coastal city pressured the government to amend its confiscatory policy. Exchange limits have been eased, allowing individuals to possess more cash.

The currency episode reveals new constraints on Kim's power and may signal a fundamental change in the operation of what is often called the world's most repressive state. The change is driven by private markets that now feed and employ half the country's 23.5 million people, and appear to have grown too big and too important to be crushed, even by a leader who loathes them.

The currency episode seems far from over, and there have been indications that Kim still has the stomach for using deadly force.

There have been public executions and reinforcements have been dispatched to the Chinese border to stop possible mass defections, according to reports in Seoul-based newspapers and aid groups with informants in the North.

Still, analysts say there has also been evidence of unexpected shifts in the limits of Kim's authority.

"The private markets have created a new power elite," said Koh Yu-whan, a professor of North Korean studies at Dongguk University in Seoul. "They pay bribes to bureaucrats in Kim's government, and they are a threat that is not going away."

The third generation

The threat comes at a time of transition in North Korea. Kim Jong Il, 67, suffered a stroke last year. While he appears to have recovered, at least enough to maintain control, he has begun a murky process of handing power over to a third generation, in the person of his youngest son, Kim Jong Eun, 26.

The Kim family dynasty built and presides over a totalitarian state that has lasted more than six decades, far longer than its mentors, Stalin's Soviet Union and Mao's China. It is the only such state to have survived the death of the leader around whom a cult of personality had been built. Kim Jong Il assumed power in 1994, after the death of his father, Kim Il Sung, the state's founding dictator.

It was an exceedingly bumpy transition: Famine killed a million people, the state-run economy imploded and private markets began an inexorable spread across the country. Still, it was a transition that had been in the works for more than a decade and was elaborately rolled out to the North Korean people, unlike the current succession.

"It would seem to an outsider that much less care has been taken to ensure a smooth dynastic transition this time around," said Nicholas Eberstadt, author of several books on North Korea.


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