Food crisis worsened by North Korea's currency reform

Mobile phones are no longer novelty items in Pyongyang. There are around 100,000 mobile phone users in the North Korean capital alone. And on the streets, there are more than just old busses – now there are Mercedes, BMWs, Audis and even Porsches.

But these status symbols are only meant for the political elite. In the countryside, farmers are working extremely hard without machines after a long winter. "We can already see that the harvest this year will probably be less than last year’s", says Johan van der Kamp, director of the German famine relief organization, Welthungerhilfe, in North Korea. "On top of that, the food supplies have worsened since the currency reform."

Officials admit mistakes with currency reform

With regard to the currency devaluation at the end of last year, the regime has now started admitting mistakes. The General Secretary of the German-Korean Friendship Association in Pyongyang, Jin Myong O, does not see any reason to doubt the North Korean leader, though.

"I am going to be honest," Jin says. "We made this change because inflation was far too high by the end of last year. We want to protect our national currency and that is the reason we did it. And then it turned out some of the experts had made mistakes. So it was a bit chaotic but we could also see there was a tremendous amount of support for General Kim Jong Il."

Apparently the government official who was responsible for the chaos was put to death in March. Still, not much business has returned to Tongil Market in the North Korean capital. But just beyond the city limits, there are the occasional street merchants with folding tables and a few goods.

Trying to woo investors

People can buy nearly everything in Pyongyang for money, but the prices are sky-high. The country is in an extremely tight economic situation, which is why its leaders are putting more effort into attracting international investors.

"We have recently emphasized our wish to welcome investors here." As General Secretary of the German-Korean Friendship Association, Jin Myong O is especially interested in attracting investors from Germany, with which North Korea has had diplomatic relations now for almost a decade.

"In these almost 10 years, we have come very far with Germany and we would say that our relationship with Germany is a good example for other European countries."

North Korean officials are reluctant to talk about politics such as atomic bomb testing or the South Korean patrol boat that sank near the border just recently. But regarding the possible succession to Kim Jong Il, officials say that a special postage stamp honoring his youngest son Kim Jong Un, is being planned. According to rumors, the 28-year-old is slated to succeed the self-styled Great General, who has been experiencing health problems.

Author: Peter Kujath (Pyongyang) / sb
Editor: Grahame Lucas