Pyongyang executes finance officials over economic crisis

NORTH KOREA executed two senior finance officials last month after the impoverished communist country redenominated its won currency, a move that wiped out millions of residents’ savings and caused social unrest.

North Korea’s economy has been suffering from sanctions imposed by the UN over its nuclear weapons programme and inflation has become a problem. The redenomination also wiped out much of the value of the money used in the country’s growing market economy, which the government disapproves of but which is thriving nonetheless.

Pak Nam Gi, the party’s finance and planning department chief who spearheaded the reform, and a deputy chief of the state planning commission, were shot by firing squad last month at a stadium in the North Korean capital, Pyongyang. Mr Pak was called a “traitor that plunged the people’s life into distress” before he was shot, according to South Korean daily NK.

Originally it was believed just Mr Pak had been executed. The currency changes caused chaos, according to reports from inside the secretive enclave, as millions of people rushed to banks and government offices to find out what was going on.

There is speculation that the country’s leader Kim Jong-il may be about to visit China to discuss deepening economic aid in return for North Korea rejoining six-nation nuclear talks, hosted by China and including both Koreas, Russia, Japan and the US.

In a separate development, North Korea has threatened to abandon a search for the remains of US soldiers who went missing during the 1950-53 Korean War, saying Washington would be to blame for the loss.

North Korea is desperate to leverage cash from Washington, which has said it will not resume talks about finding the remains of missing US soldiers until Pyongyang resumes its role in negotiations aimed at ending its nuclear arms programme.

The State Department estimates that 8,100 servicemen remain missing in action.