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Inflation-hit North Korea has fired top economic officials, South's media report

By Blaine Harden
Washington Post Staff Writer
Friday, February 5, 2010; A08

SEOUL -- Amid accounts of starvation, food shortages in the army and runaway inflation, senior economic officials in North Korea have been fired in recent days, according to reports in the South Korean media.

The dismissals were reported during a week in which North Korean leader Kim Jong Il made a rare acknowledgment of his state's failure to provide its citizens with an acceptable standard of living.

"I am most heartbroken by the fact that our people are living on corn," Kim said in a report monitored by South Korea's Yonhap news agency. "What I must do now is feed them white rice, bread and noodles generously."

Kim made a similar statement in January, mentioning white rice and meat soup. But the likelihood of his being able to improve nutrition in his country in the short term seems small.

South Korean officials have said that North Korea could face severe food shortages this spring because of a poor harvest last fall.

Last year, North Korea unilaterally canceled an aid agreement with the United States under which 500,000 tons of food would have been delivered. For two years, South Korea has refused to deliver large amounts of free food and fertilizer to its neighbor, pending a move by the North to get rid of its nuclear weapons.

These actions have left the U.N. World Food Program and other aid operations in North Korea short of food and have put millions of children and elderly people at risk, U.N. officials said.

The capacity of private markets to supply food in the North also has taken a major hit because of a government-ordered currency revaluation in December. It disrupted market trading, while driving up the price of rice and nearly every other commodity.

Two people a day have been dying of hunger in South Hamgyong province, according to a report by Good Friends, a Seoul-based aid and human rights group with informants inside the North. It also said that North Korean army commanders met with government officials Jan. 20 to discuss how to obtain more food for troops.

The army, with 1.2 million men and women in uniform, normally has first dibs on food grown in state-owned cooperative farms -- and takes as much as a quarter of the crop before distribution to civilians.

The apparent scapegoat for the disastrous currency revaluation is Pak Nam Gi, head of planning and economy for the Workers' Party. He has been fired, according to the Chosun Ilbo, a newspaper in Seoul, which cited sources based in China.

South Korea's National Intelligence Service said Thursday that North Korea has now recognized the social upheaval caused by the currency revaluation and is easing curbs on black-market trading, Reuters reported.

"To quell public discontent, controls and the crackdown on marketplaces have been eased," an intelligence official told the news agency. "Discontent is high."

The head of "Room 39," the government bureaucracy that focuses on making money for the Kim family, also has been fired, according to Yonhap, which cited an unidentified source. It said Kim Dong Un, head of the department that controls a variety of operations, including state-sponsored insurance fraud and legitimate trading operations, had been replaced by his deputy.

Last year, the United Nations beefed up sanctions intended to disrupt North Korea's arms and smuggling operations after the country detonated a nuclear device.

The chief of Room 39 might have lost his job because the European Union had blacklisted him and he could no longer travel freely in Europe, Yonhap said.

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