According to the South Korean spy agency, North Korea executed a forex trader as part of a crackdown on the foreign exchange markets after Supreme Leader Kim Jong Un had a tighter grip on the economy.
Kim Byung-kee, a member of the South Korean National Assembly's intelligence committee who was briefed by the intelligence service on Friday, said the execution was the last in a series of "unreasonable" actions taken by Mr. Kim as North Korea battles under the Covid. 19 Pandemic and International Sanctions.
The execution came after the North Korean won appreciated almost 20 percent against the US dollar in recent months. This is one of the biggest moves in years. This comes from prices published by Daily NK, a Seoul-based website that tracks market prices in various North Korean cities. The sudden change shows the growing instability of the economy and worries Pyongyang.
Analysts said the local currency appreciation was due to crackdown on dollar transactions as Pyongyang gains control of the economy after years of market liberalization.
Andrei Lankov, a North Korean expert at Kookmin University in Seoul, said there had been signs of "significant changes" in the currency situation since October after years of "remarkable financial stability".
“Under Kim Jong Un, they did not intervene at all in private companies for a long time. . . Not only did they tolerate decentralization, but they encouraged it and the shift to market relationships between industrial companies and individuals. Now they are trying to step back, ”he said.
Mr Lankov added that the execution would send a warning to the public to act against the regime's instructions regarding the use of foreign currency. After the catastrophic sudden appreciation of the currency in Pyongyang in 2009, foreign currencies have become widespread in border trade and private market transactions, particularly the US dollar and the Chinese renminbi.
There is uncertainty among North Korean observers about the extent of the pandemic in the isolated state. Pyongyang has not publicly confirmed any Covid-19 cases after its borders were swiftly locked outside most other countries in January. However, the claim to have no infections has been greeted with skepticism by international experts and officials.
The crackdown on forex traders and the tightening of control over the currency markets stem from Mr Kim's struggle against the economic fallout from the pandemic and the subsequent collapse in trade with China. Those challenges have been compounded this year by crippling economic sanctions, devastating typhoons, and flooding.
Go Myong-hyun, a research fellow at the Asan Institute for Policy Studies, a Seoul-based think tank, said the change in approach came as a blow to Mr. Kim, who has "claimed credit" for economic development since he came to power in 2011 .
"Between 2010 and 2017, North Korea's import levels increased, export levels increased and [Mr. Kim] presented major public projects in Pyongyang," he said. “Now he can't do that anymore because he's running out of money. That's why he's regaining control of the market. "
Mr. Go also noted that the North Korean state media are increasingly demanding self-reliance and replacing imports with domestic products.
"These are essentially expressions that North Koreans need to tighten their belts," he said.
The Kim regime has long been criticized for diverting funds from the impoverished public to develop weapons of mass destruction. Last month, Mr. Kim led the country's largest military parades in years, unveiling the world's largest mobile ICBM and emphasizing his continued focus on nuclear weapon development despite the deepening economic crisis.