New North Korean monetary policy leaves two dead, markets in uproar

According to Open Radio for North Korea, a shortwave service based in Seoul and broadcasting to the DPRK, two men were killed by police in Pyongsong, a market outside Pyongyang. The response was triggered when the men divided their cash among a large group of people as a way to bypass caps set by the government on the exchange of old currency for new.

Protests occurred in several major cities, and sources in North Korea tell Chosun Ilbo, a newspaper in South Korea, that the women working in informal markets across North Korea "openly curse government authorities despite the risk of being arrested."

Since the death of Kim Il Sung, Pyongyang is said to have lost the control over the country that it once enjoyed, as Kim Jong Il lacks his father's charisma, back-story and (supposedly) wartime chops.

The authorities have long turned a blind eye toward these local attempts at capitalism, as it has become a necessary measure for addressing the rampant food shortages up north. The new monetary policy is being used as a way to control the expansion of private wealth in the communist country, but it appears that capitalism is a genie that can't be squeezed back into the bottle easily.

According to Shaun Cochran, head of Korea research at CLSA Asia-Pacific Markets, "They've tried to wind back the system, but they're potentially teaching the people that markets can't be controlled." Cochran considers this development more profound than the nuclear weapons program, telling the Wall Street Journal it "could be the single most important event in defining North Korea over the next decade."

The reports from North Korea coincided with the arrival of Stephen Bosworth, the top U.S. envoy to the reclusive state. His mission is to discuss a return to aid-for-disarmament talks within the six-party structure, which includes South Korea, Russia, China and Japan.