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Cuban Barbers to Gain More Freedoms

The World — Fri, 18 Nov 2011 13:50:31 +0000

We’re taking a little off the top and trimming the sideburns for today’s Geo Quiz. Barbers in the Caribbean city we’re looking for will have a little more freedom come December 1st.

They won’t suddenly be coming out with new outlandish styles and coifs. No.

It’s a much more basic freedom: they’ll simply be able to run their own barber shops, and work outside of state control. It’s part of a trend in this city: more and more of this city’s residents are becoming self-employed.

The Communist government here is cash-strapped, and wants to slash a million jobs from its payrolls. We hope the answer to this Quiz is coming into focus now.

We’re going to turn to Ted Henken for the answer. He’s professor of Latin American Studies at Baruch College in New York. And he writes about Cuba on his blog El Yuma.

The answer to our Geo Quiz is Havana.

New sanctions against North Korea

The World — Wed, 21 Jul 2010 20:25:42 +0000

The US will impose new sanctions on North Korea, following the crisis over the sinking of a South Korean warship. The move was announced by Secretary of State Hillary Clinton during a visit to South Korea. An international inquiry blamed North Korea for sinking the Cheonan warship in March, with the loss of 46 lives, but Pyongyang has denied any involvement. Laura Lynch reports. Download MP3

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MARCO WERMAN: I’m Marco Werman. This is The World. The Obama administration is ramping up pressure on North Korea. Secretary of State Hillary Clinton today announced a new round of economic sanctions against the already isolated regime. The move comes just two months after an inquiry blamed a North Korean torpedo for sinking a South Korean warship. 46 sailors were killed. Tensions between the two Koreas have been high ever since. The World’s Laura Lynch reports.

LAURA LYNCH: In the gloom and the grey of a drizzly day, the camera shutters clicked as two high profile American visitors climbed to an observation post at the demilitarized zone. Secretary of State Hillary Clinton and Defense Secretary Robert Gates peered across the line with the help of binoculars, then toured a small building straddling the border. With North Korean soldiers staring them down from the other side, Clinton and Gates began piling on the pressure, urging the regime to change its ways.

HILLARY CLINTON: There is another way. There is a way that can benefit the people of the north.

ROBERT GATES: It’s stunning how little has changed in the north and yet how much South Korea has continued to grow and prosper.

LYNCH: Later, flanked by South Korea’s defense and foreign ministers Clinton took the show of solidarity a step further.

CLINTON: Today I’m announcing a series of measures to increase our ability to prevent North Korea’s proliferation, to halt their illicit activities that help fund their weapons program, and to discourage further provocative actions.

LYNCH: The sanctions target the trade in counterfeit cigarettes, liquor and luxury goods. Things most impoverished North Koreans cannot even dream of buying. The visit and the new measures come after the sinking of a South Korean naval vessel, the Cheonan in March. An international inquiry later blamed North Korea. That drew both a denial and an act of defiance, all read out on state television.

KOREAN SPEAKING

LYNCH: The newsreader announced North Korea’s response, scrapping an agreement intended to prevent accidental clashes with South Korean military vessels. Today, Clinton reiterated US demands for Pyongyang to stop stirring up trouble.

CLINTON: We do expect to see North Korea take certain steps that would acknowledge their responsibility for the sinking of the Cheonan which would demonstrate their commitment to the irreversible denuclearization of the peninsula, which would end the provocative and belligerent actions.

LYNCH: This joint trip by Clinton and Gates coincides with the 60^th anniversary of the start of the Korean War. Joint US-South Korean naval exercises will follow in the coming days, as both countries take to the seas to send a message to the North. Gates acknowledges that the declining health of North Korean dictator Kim Jong-Il and the sinking of the Cheonan are sparking concerns that the exercises themselves could trigger fresh confrontations.

GATES: By the same token, I think taking steps that further strengthen deterrence and also demonstrate our determination not to be intimidated are very important.

LYNCH: The pressure on North Korea and the military exercises aren’t helping to repair frayed relations with China. Gates admits he worries about that too. But not enough to put a halt to efforts to put the diplomatic, economic and military squeeze on Pyongyang. For the World, I’m Laura Lynch.

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North Korea’s agenda

The World — Wed, 26 May 2010 20:25:14 +0000

Secretary of State Hillary Clinton says the international community must respond in the growing crisis over the sinking of a South Korean warship. She said there was “overwhelming” evidence that North Korea was to blame, and urged Pyongyang to halt its “policy of belligerence”. But why would North Korea torpedo a South Korean ship and kill dozens of sailors? An international investigation has determined that’s just what happened in March. Matthew Bell is exploring Pyongyang’s agenda. Download MP3

BBC coverage
No easy options
North Korea discussed in US-China talks

MARCO WERMAN: I’m Marco Werman and this is The World. Hillary Clinton visited the South Korean capital, Seoul, today. She called on the world to respond to what she called North Korea’s unacceptable provocation. The Secretary of State was referring to an incident in March. International investigators say a North Korean torpedo sank a South Korean Navy ship killing 46 sailors. North Korea denies sinking the ship and it’s ratcheting up the rhetoric as The World’s Matthew Bell reports.

MATTHEW BELL: Speaking in the North Korean capital, Pyongyang, a veteran of the Korean War today denied that his country had anything to do with the sinking of South Korea’s ship, the Cheonan. General Pak Chan Su said the South’s president is manufacturing this crisis. General Pak implied that President Lee Myung Bak is a puppet of the United States. North Korea’s enemies are clamoring for sanctions, he said, but we will answer with all out war. North Korea is already one of the most isolated and sanctioned countries on earth. So if the investigation’s findings are accurate, and North Korea did sink that ship, what were its leaders thinking?

SUNG-YOON LEE: North Korea does such things because by exporting insecurity and by backing down, it can get away with not only murder, but it can actually get away with a lot of economic concessions.

BELL: Sung-Yoon Lee is an international relations expert at Tufts University. He says North Korea is threatening to cut off all ties with South Korea now because it’s holding out for a bigger payoff down the road.

LEE: For North Korea to survive and for North Korea to preserve its own regime, facing the constant existential threat of being absorbed by the richer, freer, South Korea, North Korea sees it to be in its best interests to resort to such acts of provocation from time to time, create tension, create crisis, and then say okay, let’s go back to negotiating and be rewarded.

BELL: North Korea is going through a political transition right now. Leader Kim Jong Il is thought to be ill and preparing to hand off power to one of his sons, the 20-something Kim Jong Un. Professor Lee says North Korean leaders do not earn legitimacy at the ballot box.

LEE: Their credentials, the source of their legitimacy come from being a so-called great General, military leader. Although the current leader never served a day in the military, so to have a strategic mind, to try to prove oneself as an able General or military leader that is able to engineer a military act like this against South Korea, this would boost up the credentials of this young man, the heir apparent, Kim Jong Un.

BELL: Experts say another thing North Korea would have been trying to do with an attack like the one against the Cheonan is to stir up a political reaction ahead of upcoming elections in South Korea. Stephan Haggard is a Korea expert at the University of California at San Diego. He says the left in South Korea is accusing the right leaning government of Yee Myung Bak of playing politics with the sinking of the Cheonan.

STEPHAN HAGGARD: It’s really become quite polarized and those who favored in engagement strategy have obviously been marginalized under the Yee Myung Bak administration. And so I think they want to taint the LMB administration, the Yee Myung Bak administration as partly response for this incident.

BELL: After months of stalled six party talks on North Korea’s nuclear program, a question on the minds of many experts right now is whether North Korea is looking for a fight. Mike Chinoy is the author of a book about the nuclear showdown with North Korea called “Meltdown”. He says the leadership in Pyongyang is not suicidal. However . . .

MIKE CHINOY: What’s worrying now is there aren’t any diplomatic channels and in the absence of that the danger of miscalculation or things getting worse certainly increases.

BELL: United Nations is expected to take up the issue of new sanctions against North Korea and all eyes will be on China. It holds a seat on the Security Council. China is also the closest thing North Korea has to a political ally. For The World, I’m Matthew Bell.

MIKE CHINOY: What’s worrying now is there aren’t any diplomatic channels and in the absence of that the danger of miscalculation or things getting worse certainly increases.

Clinton urges China on North Korea

The World — Mon, 24 May 2010 20:31:25 +0000

Download MP3 The Secretary of State Hillary Clinton says the US is working hard to avoid an escalation after a report blamed North Korea for the sinking of a South Korean warship. After talks in China, Clinton urged countries in the region to contain “the highly precarious situation created by North Korea”. Earlier, South Korean President Lee Myung-bak froze trade with Pyongyang, vowing to punish those who carried out the attack, which killed 46 sailors. North Korea says it will retaliate. China is the only country with any real leverage over North Korea and so far Beijing has refrained from criticizing its neighbor. Marco Werman talks with The World’s Mary Kay Magistad in Beijing.

BBC coverage
North Korea – secretive state
South Korean official blames North Korea

MARCO WERMAN: I’m Marco Werman and this is The World. Tensions on the Korean peninsula are about as high as they’ve been since the Korean War. The reason is the sinking of a South Korean warship, apparently by North Korean in March. South Korea today announced sanctions against the North, but the only country with leverage over North Korea is China and so far China has refrained from criticizing its neighbor. U.S. Secretary of State Hillary Clinton is seeking a tougher stance from Beijing. She’s in the Chinese capital and The World’s Mary Kay Magistad is following her mission. Mary Kay, what does the U.S. need from China to be able to get tough on North Korea?

MARY KAY MAGISTAD: Well at the very least the United States would like to hear rhetoric from China. Today President Hu Jintao did not even mention North Korea specifically. He said that the U.S. and China should strengthen coordination on regional hotspots and global issues, which doesn’t exactly get to the critical issue at hand. I think what the U.S. would like to see is for China to even consider its own sanctions against North Korea. It is North Korea’s main supplier of oil and one of its main suppliers of food aid. So if it were to decide to impose sanctions on North Korea, it would make an impact. However China doesn’t really want to do that because there would be implications for China as well in terms of possible refugee flows coming in and geopolitical considerations as well that might be against China’s own interests.

WERMAN: Secretary Clinton is in Beijing today. How would you assess her urgency at her meetings with the partners there?

MAGISTAD: Well she actually had some pointed things to say today about this issue.

SECRETARY OF STATE HILLARY CLINTON: Today we face another serious challenge provoked by the sinking of the South Korean ship. So we must work together again, to address this challenge and advance our shared objectives for peace and stability on the Korean peninsula. We asked North Korea to stop its provocative behavior, halt its policy of threats and belligerence toward its neighbors and take irreversible steps to fulfill its denuclearization commitments and comply with international law.

WERMAN: Mary Kay, are Secretary Clinton’s counterparts hearing this?

MAGISTAD: Well they’re certainly hearing it, but China has its own geopolitical concerns when it comes to North and South Korea. They do want to see a denuclearized Korean peninsula. They have hosted talks of six different countries including North and South Korea, the U.S., Russia, China and Japan over several years to try to get this to happen. They lose a little bit of diplomatic credibility in the sense that nothing really has happened that has had a lasting effect. But also, China doesn’t really want a unified Korea on its border. It neither wants North Korea to implode and to have a flow of refugees to China, but nor does it want a unified Korea that would be friendly to the U.S. on its border. So it’s playing a fairly complicated diplomatic game in how it’s dealing with North Korea and it’s not really prepared to cut off all assistance that it’s giving at this point.

WERMAN: What are some of the sticking points in the U.S.-China relationship right now that Secretary Clinton is presumably talking about with the Chinese in Beijing today that may get in the way of these North Korea talks with China?

MAGISTAD: Well from the U.S. side there’s concerned about increasing Chinese protectionism and how that’s affecting U.S. investment and U.S. trade. From the Chinese side, they say well we would like to see export controls lifted of high tech equipment that we would like. We want to have cutting edge equipment coming in; cutting edge technology and you’re not letting us get a hold of it. And in fact, at news conferences over the last week at gatherings where, for instance, U.S. Secretary of Commerce Gary Locke spoke, question after question after question about this specific issue. So it seems that this is a bit of a campaign that the Chinese government is doing. But then there’s also the point of just the bigger relationship and what it means as China continues to grow and China’s place in the world continues to grow and China feels that it has the right to challenge what has, for a long time, been the U.S. position in the world as being the predominant power. And there is a certain, aggressiveness would be perhaps a little too strong, but there is a certain assertiveness that China seems to be feeling these days that it has a right to question the U.S. position in the world and I think just sort of finding a new footing, finding a new balance in the relationship is a big part of what’s going on in this dialogue.

WERMAN: The World’s Mary Kay Magistad in Beijing. Mary Kay, many thanks.

MAGISTAD: Thank you.

North Korea’s Kim visits China

The World — Tue, 04 May 2010 20:38:23 +0000

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A train believed to be carrying North Korean leader Kim Jong-il has left the Chinese city of Dalian and is reportedly bound for Beijing. Neither North Korea or China has confirmed Kim’s presence in the country, but media reports suggest he will meet top Chinese leaders. He arrived in China on Monday, traveling on his special train. Mary Kay Magistad reports.

BBC coverage
North Korea: secretive state

MARCO WERMAN: I’m Marco Werman and this is The World. North Korean leader Kim Jong Il is on a rare visit to China. Despite tight security, South Korean journalists managed to get a few pictures of him yesterday in the northern city of Dalian. Still, Chinese state run media are ignoring the visit and Chinese officials aren’t saying much either. The World’s Mary Kay Magistad reports from Beijing.

MARY KAY MAGISTAD: It’s become something of a tradition in China that when Kim Jong Il comes to town, the Chinese government says nothing about it until his armored train is on its way back to Pyongyang. And so it was again today at the regularly scheduled Foreign Ministry briefing. Spokeswoman Jiang Yu kept saying in response to repeated questions about Kim’s trip, I don’t have any information on that. A BBC correspondent pointed out that there’s photographic evidence that Kim is in China.

MALE VOICE 1: We’re now in a farcical situation where everybody has seen the photographs, we know he’s here, but you’re saying nothing about it. Why is that? Surely that makes the Chinese government look a little bit ridiculous.

MAGISTAD: That sounds like an opinion rather than a question. Kim Jong Il is visiting China at a time of tense relations with South Korea, just weeks after a South Korean warship was blown up by what the South Korean military believes was a torpedo. They’re investigating to see whether it was North Korea’s. Meanwhile, North Korea’s already fragile economy has taken a hit from the government’s capricious revaluation of its currency earlier this year. And energy supplies are woefully short, says German aid worker Karin Janz, a long time resident of Pyongyang.

KARIN JANZ: I think the energy is a very, very big problem and last winter, including me, I was living in a cold apartment, in a cold office. We didn’t have any heating and this is in Pyongyang. The cities, they don’t have electricity for weeks in winter.

MAGISTAD: But worse than that, she says, North Korea’s model of agriculture depends heavily on equipment. And since fuel is in short supply, the harvest may be too this year. That’s usually when North Korea goes looking for international aid. And North Korean expert Andrei Lankov thinks it plays the game very well.

ANDREI LANKOV: I believe that North Korean government are the best Machiavellians still in business. They are smart. They are rational and they know what they want.

MAGISTAD: He says the North Koreans are great at using perceptions of them as erratic and dangerous to create a crisis, extract aid, and keep going until the next time. China has talked of trying to get the six party talks going again this summer; talks aimed at getting North Korea to give up its nuclear weapons in exchange for aid and other incentives. Some Chinese and South Korean analysts say it could well be that Kim on this trip gets aid in exchange for a promise to come back to the negotiating table. But Andrei Lankov doubts North Korea’s leadership is every going to give up its nukes because it’s all that keeps the money rolling in.

LANKOV: They understand that the world will pay enough, without asking too many questions about how the aid is used. And of course, a large part of aid goes to the politically valuable parts of population to ensure domestic stability.

MAGISTAD: But with an ailing leader and a failing economy, it’s unclear just how much domestic stability there is in North Korea these days. Aid worker Karin Janz says the obvious question North Koreans ask when Kim Jong Il visits China is why he doesn’t take a page from China’s highly successful playbook.

JANZ: All the Koreans have hope that oh please, now he goes to China again and let him learn something from the Chinese example we could apply this in our country.

MAGISTAD: Andrei Lankov believes the reason North Korea doesn’t give up on isolating its population and controlling the economy is because that would require opening up and that would let North Koreans see how far ahead of them South Koreans are, causing the regime to lose all credibility and collapse.

LANKOV: Such experiment is likely to bring not Chinese style economic boom, but German style collapse followed by unification.

MAGISTAD: And China’s leaders don’t want that, because it would put a U.S. backed Korea smack on their border. So, North Korea’s economy hobbles on, with China as its main benefactor, and Kim Jong Il has once again come to call for a trip of unknown length, and unknown purpose, except the ever-present purpose of doing what it takes to stay in power. For The World, I’m Mary Kay Magistad in Beijing.

Kim Jong Il, “fashion icon”

The World — Mon, 12 Apr 2010 20:56:36 +0000

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A North Korean website says the “Dear Leader” began a global fashion trend with his zippered jumpsuits. Many North Koreans apparently believe it. North Korea watcher and author Barbara Demick explains how authorities there have mastered the art of propaganda.

MARCO WERMAN: I’m Marco Werman, this is The World. North Korea is run by a secretive communist regime. So you never know if the stories that come out of there are quite as they appear. But this story out of North Korea caught our attention recently. It described leader Kim Jong Il as a global fashion icon thanks to his trademark zip up suit. The story came out of one of Kim’s state run websites. It even quoted an unidentified French fashion expert. Barbara Demick covers North Korea as Beijing Bureau Chief for the Los Angeles Times. Barbara, assess for us Kim Jong Il’s fashion sense. Have you seen his style in other parts of the world?

BARBARA DEMICK: I cannot say I’ve seen his style in other parts of the world and I haven’t even seen his style in North Korea. I don’t think North Koreans favor wearing these drab gray suits, not that they have such fantastic clothes. But it’s not like everybody is walking around like that. People tend to wear dark trousers, button down shirts, sweaters, or more typical Joe.

WERMAN: And if they’re five foot three inches like Kim Jong Il is they probably don’t go out and splurge on a pair of elevator shoes.

DEMICK: They probably don’t. They probably wear their height in pride, no matter what it is.

WERMAN: Now the story that Kim Jong Il is a fashion icon began perhaps not surprisingly at this North Korean government website called urimin zokiri. It doesn’t appear to be your typical single party government mouth piece. It focuses less on official policy and more on kind of culture, soft policy, is that right? Do you know what this website is?

DEMICK: It’s a fairly new website and I think it’s almost like a fan club for Kim Jong Il and for the regime. But they quote bits and pieces from the news service. This particular item that said Kim Jong Il’s trademark suit is now in fashion worldwide thanks to his greatness. That came from Rodov Shinman which is the workers’ daily and that’s the main North Korean paper.

WERMAN: This is also the same website that states incontrovertibly that Kim Jong Il was born in a log cabin on a countryside mountain and that the event was marked by a double rainbow and bright star in the sky. Now having followed North Korean citizens over a 15 year period, and you kind of talk about this in your book, “Nothing to Envy, Ordinary Lies in North Korea”., have you found that North Koreans really buy into the propaganda put forth by the government there?

DEMICK: Oh yes. Oh yes they do believe that and this is all they know. Children are taught from the time they go to school all these legends they have in the schools, Kim Jong Il rooms, little museums, they’re like shrines and they show the log cabin on Mount Pekdu and yes, they absolutely believe all that about the leadership.

WERMAN: And with stories like the one about Kim Jong Il’s zip up suit, how would North Koreans view that kind of story? Would they chuckle or is it like, him he is an international fashion icon.

DEMICK: Oh no, they would not chuckle. They don’t, in fact people who have made jokes saying gee wouldn’t it be great if our leader were a little bit taller? They can get taken away up to the gulag for that. So I think they would, if they read that they would just nod and say good for him.

WERMAN: So I’m just kind of curious what a notice in this Urimin Zokiri on Kim Jong Il being a fashion icon actually suggests about what’s going on in North Korea. What is the dynamic there between propaganda, both soft and hard propaganda, and current events, whether it’s nuclear proliferation or North Koreans facing starvation.

DEMICK: Well to us, a lot of this about North Korea is a joke. You know the bouffant hair, the sunglasses, the suit, this is just a great joke, but the North Koreans take Kim Jong Il very seriously and all their propaganda is designed to make it look like the rest of the world takes him seriously too. North Koreans can’t get any kind of external media there. They’re televisions are fixed to a single station. Their radios are fixed to a single station. They have no internet, and so this is the only voice that they know, the propaganda. And it’s so deeply inculcated in them; even North Koreans when they come out of North Korea can’t really say bad things about Kim Il Sun and Kim Jong Il because they are taught as little children if you say something bad about Kim Jong Il, you’re a bad person.

WERMAN: Barbara what’s your sense of the propaganda barometer in North Korea right now? Is North Korean facing high pressure or low pressure?

DEMICK: High pressure. Very, very high pressure because in the past North Koreans were always taught they have nothing to envy in the world, that’s the title of my book, but they are the greatest country, everybody else is suffering, everybody else is hungry and now little bits of information are creeping through. They get an occasional DVD smuggled across the border, an occasional magazine, and they know now, they know that the South Koreans and the Americans and the Chinese eat much better. So now the propaganda is telling them well, okay those guys might be richer, but they’re corrupt and they are the running dogs of the American Imperialists and all this kind of stuff and as North Korea becomes poorer and poorer and China becomes richer, they need more propaganda to convince people that they’re better off being in North Korea. That’s a really difficult thing to do.

WERMAN: So it has gone from nothing to envy in the world to something to envy in the world.

DEMICK: But we’re still better, we’re still better. We’re still better than them.

WERMAN: I understand a lot of North Koreans are hungry again right now. I mean how long can the government keep saying we’re still better? It’s going to be getting better?

DEMICK: It’s really tough. They did a revaluation of their currency in late November/early December. Basically invalidated all the old currency and issued new. Closed down the markets and it caused a lot of chaos in the economy and this one is really hard to blame on anybody else. This was pretty clearly their fault, so we’re all wondering how much longer they can get away with it.

WERMAN: Los Angeles Times Beijing Bureau Chief, Barbara Demick speaking to us about North Korea and its propaganda, good to speak with you Barbara, thanks a lot.

DEMICK: Okay, thanks so much.

Whatever happened to Elian Gonzalez?

The World — Tue, 06 Apr 2010 20:28:04 +0000

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For today’s Geo Quiz — we were wondering whatever happened to Elian Gonzalez? Ten years ago this month US authorities took Elian from his Miami relatives and returned him to his father’s custody in Cuba. He’s now 16 years old and some snapshots of him have been published on a Cuban government website. We speak with the BBC’s Michael Voss in Havana.

Elian Gonzalez holds a Cuban flag during the UJC, Union of Young Communists, congress in Havana Sunday April 4, 2010. Gonzalez, the Cuban boy at the center of an international custody battle 10 years ago in April 2000, attended Cuba's Young Communist Union wearing an olive green military school uniform. (AP Photo/Ismael Francisco, Prensa Latina)

Alan Diaz's Pulitzer Prize winning photograph

Geo Answer:
Ten years ago this month — US authorities returned him to his father’s custody in Cuba. He’s now 16 years old and some snapshots of him have been published on a Cuban government website. Listen to the interview and the answer:

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North Korea’s failing currency

The World — Thu, 04 Feb 2010 21:53:08 +0000

The North Korean government recently knocked two zeros off its currency, the won. And it ordered citizens to turn in their old cash savings. The move caused panic and riots among North Koreans. There were food shortages as well, as people scrambled to buy whatever they could before their money became worthless. Now the North Korean government has apparently fired the official who led the currency revaluation program. Katy Clark talks with Marcus Noland who is an expert on North Korea’s economy at the Peterson Institute for International Economics.

KATY CLARK: Next door to China in North Korea the economy is in chaos. The problem is a government program to change the value of the North Korean currency the won. Citizens were ordered to trade in a limited amount of old money in exchange for new bank notes. If they had extra savings in the form of old cash, that money was declared worthless. The move has reportedly caused panic, food shortages and even riots. Marcus Noland is Deputy Director and Senior Fellow at the Peterson Institute for International Economics. He says as usual, it’s hard to know exactly what’s going on in North Korea.

MARCUS NOLAND: The government has actually not made any official announcements at all about this currency reform. What happened was the government through its party apparatus announced that these changes were being made on November 30th and gave the populace one week to implement this reform. Foreign embassies were briefed verbally and then on New Year’s Day there is a very important editorial that is jointly issued by three publications. Interestingly enough the New Year’s editorial didn’t mention the currency reform. So it’s been a very strange episode all around.

CLARK: Can you talk a little bit about how North Korea’s currency revaluation and other recent moves caused the economic chaos there?

NOLAND: Well, North Korea is an extremely cash-oriented economy. The financial system is extremely under-developed, and the critical thing about this currency reform is not that they just knocked two zeros off the currency. Often times, good governments do this to signal that periods of high inflation in the past have come to an end, and there will be good economic policy in the future. What sets the North Korean case apart is there were very severe limits placed on how much currency you can convert. The effect of that was two-fold. One was to wipe out large amounts of household savings. Secondly, it had the effect of wiping out the working capital of private entrepreneurs which have developed over the last 15 years. And that really was the motivation for this policy to strike a blow at this burgeoning private economy. That makes the government very uncomfortable in that it offers an alternative pathway to wealth and prestige and possibly ultimately power that is beyond state control.

CLARK: Do you think that the government just didn’t think this through? I mean, it sounded like a good idea but they didn’t think about what this would actually mean when put into practice?

NOLAND: You know, Katy, that is an absolutely fantastic question that I’ve been wondering about myself since the very beginning. We know that someone at the Central Bank must have known the amount of currency in circulation, and when they put these confiscatory limits on it, how much of the money supply was effectively being destroyed. What we don’t know is if the people who actually made these decisions knew that information or even knew enough to ask the question and if they did, cared about the answer. What we’ve seen is this move has set off absolute chaos. The economy has really ground to a halt.

CLARK: There are reports of riots as a result of the currency revaluation. If those are true, how unusual is that for North Korea.

NOLAND: Well, I would underline for your listeners that it is very, very difficult to confirm these stories. There have been stories of people in effect engaging in civil obedience by burning their old currency. The old currency bears the likeness of the founder of the country, Kim Il Sung, and defacing anything with his likeness is treasonable. So there have been descriptions of acts like that as well as demonstrations and as you describe, riots. It’s very hard to tell really how wide spread these are and how large they are.

CLARK: So if I am a U.S. official in Washington watching what’s going on Pyongyang, what do I make of it?

NOLAND: If I were a U.S. official in Washington, I would be very concerned about this. There is an understandable tendency to focus on the nuclear issue when you think about Korea. As a consequence, speaking frankly, there has been a tendency in Washington to ignore what’s actually go on, on the ground. There has been an excessive focus on these sort of diplomatic negotiations. I would be concerned because North Korea is facing leadership transition. Kim Jong Il is old. He’s in poor health and what we could be looking at is the beginning of the end of this political regime in North Korea, and nobody has any idea how it’s going to end up. It could ultimately involve intervention by China and South Korea and the U.S. could be drawn in as well. The underlying political stability of that political regime I think is starting to be called into question.

CLARK: Marcus Noland, Deputy Director at the Peterson Institute for International Economics. Good to speak with you. Thank you.

NOLAND: My pleasure.

East German guesthouse nostalgia

The World — Fri, 06 Nov 2009 21:32:41 +0000

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The World’s Europe Correspondent, Gerry Hadden, is in Berlin working on stories for the 20th anniversary of the fall of the Berlin Wall. He spent last night in the Ostel hotel. It’s a hotel refurbished to resemble a guesthouse in 1970s communist East Germany. Gerry gives us a tour. (Photo: Gerry Hadden)

Ostel Hotel
OSTEL GbR – Wriezener Karree 5 – 10243 Berlin
Fon +49 30 25 76 86 60 – Fax +49 30 25 76 88 07
eMail contact@ostel.eu- Web ostel.eu