Author: Eui-Gak Hwang, Korea University and ICSEAD

Amid unconfirmed reports that China, North Korea’s chief ally, is preparing a contingency plan on the basis that the isolated North may collapse, Yonhap News reported [Korean] that Park Nam-ki, former head of Planning and Finance of the DPRK Workers Party, was executed last week as a scapegoat for the failed North Korean currency re-evaluation last October. The currency re-valuation (each 100 old North Korean won was exchanged for 1 unit of new currency) was aimed at recouping money hoarded by those families who have relatives abroad or access to foreign currency, and had a serious impact on the daily living standards of many people.

What is the overall significance of these two events, and how does economic fragility interact with military might? Read more…