North Korean official executed for botched currency reform

Mar 18, 2010, 10:50 GMT

Seoul - North Korea executed the finance official in charge of November's disastrous currency redenomination, a news report said Thursday.

Pak Nam Gi, the fired finance and planning department head of the ruling Worker's Party, was executed by firing squad last week in Pyongyang for 'deliberately ruining the national economy,' South Korea's Yonhap News Agency reported, citing multiple unnamed sources.

Pak spearheaded the initiative that ended up triggering unrest and worsening food shortages in the isolated communist country, Yonhap said. It was aimed at taming inflation and keeping private markets in check, but the reform reportedly backfired, causing massive inflation and endangering leader Kim Jong Il's plan to hand power to his youngest son.

'The mood in the leadership has made Pak Nam Ki a scapegoat,' Yonhap quoted an anonymous source as saying.

Pak was relieved of his duties in January, South Korea's Chosun Ilbo newspaper reported last month.

Neither South Korea's Unification Ministry nor its National Intelligence Service could confirm reports of Pak's execution.

In the currency reform, the first in 17 years, North Korea's government knocked two zeros off the value of its banknotes. Sources in Pyongyang told local media that the country's central bank also limited the amount North Koreans could exchange for the new currency to 100,000 won (about 690 dollars at the official exchange rate) per family, leaving citizens with stashes of worthless bills.

The communist regime then banned the use of all foreign currency and demanded that its people exchange that money for North Korean won within 24 hours, the South Korean website Daily NK reported in late December.

But since then, Pyongyang has given in to public dissatisfaction over the reforms, allowing citizens to own foreign currency and to buy and sell produce in private markets, the Seoul-based JoongAng Ilbo newspaper reported this week.