October 31, 2011 09:57
The North Korean regime is apparently stoking inflation to get people to give up their U.S. dollars and gold. According to a source familiar with North Korean affairs, the North Korean Trade Bank is trying to get people to trade their dollars at a black market rate of 2,800 won per dollar, 30 times higher than the official exchange rate.
Other government entities are collecting gold directly from mines in Pyongan Province or buying gold at above market rates. A source said, "At first sight that may look like generosity, but the aim is to take dollars and gold away from people by artificially hiking inflation."
The price of rice, which usually drops after the harvest season, has instead risen from 2,200 won per kilogram in August to 3,000 won this month.
To get more dollars, the regime is even promoting the sale of mobile phones, which are otherwise seen as a threat to public order. The Ministry of Posts and Telecommunications is selling imported Chinese mobile phones for US$300 after importing them for just $80.
"Since some 700,000 phones have been sold and a registration fee is $140, the regime has pocketed around $250 million in the business," a source said. It aims for 1 million subscribers by the end of this year and has allocated quotas to each district post and telecommunications branch.
The moves are aimed at retrieving the cash people have made from trading in the markets.
The regime is also demanding hefty dollar payments by arranging reunions for families who have relatives in the U.S. Once the reunions have taken place, it then forces the families to keep sending letters to their American relatives begging for cash.
The source said the regime is also trying to entice Japanese pensioners of North Korean descent to move back to the North, telling them they can live comfortably in North Korea for just 30,000 yen a month. When the pensioners die, the regime fails to inform the Japanese government and keeps collecting their Japanese pensions of some 120,000 yen per person.
The source said the North is resorting to any means at all to pay for a planned extravaganza next year celebrating the 100th birthday of nation founder Kim Il-sung, by which time it has vowed to become "a prosperous and powerful nation." But stoking inflation and ensuring the spread of mobile phones could well backfire, the source added.
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