Excerpted from:

Wall Street Journal

Wednesday, December 9, 2009

North Korea Money Policy Spurs Protests

By Evan Ranstad

Seoul ? New reports emerged Tuesday of protests and deadly violence in North Korea and the country?s authoritarian regime over the past week seized most of its citizens? money and savings via a new-currency issue.

Open Radio for north Korea, a Seoul-based shortwave radio station that broadcasts news to the North, said police killed two men in Pyongsong, a market center outside of Pyongyang, on Friday after they divided their savings among a large group of people and urged them to exchange the money for them, attempting to get around the government?s limit. 

Choson Ilbo, a South Korean newspaper, cited informants in the North in reporting that women working in the goods and produce markets of some towns ?openly curse government authorities despite the risk of being arrested.?

Those reports, and scrutiny of Pyongyang?s human-rights violations, coincided with the arrival of an American envoy for a meeting with North Korean officials.

The reports suggest that North Korean officials may be experiencing more difficulty than expected in using the currency issuance to collar the expansion of private wealth in the country.

?They?ve tried to wind back the system, but they?re potentially teaching the people that markets can?t be controlled,? says Shaun Cochran, head of Korea research at CLSA Asia-Pacific Markets, who published a report on North Korea?s move.

Pyongyang announced Nov. 30 its decision to issue new currency and limit the amount of the old currency that could be exchanged to the equivalent of about $40, based on unofficial exchange rates, at step that essentially scrapped all other private