章 615: Chapter 615: Don’t Reveal What You’re Doing
Currency reform.
In modern history, only a handful of countries have successfully achieved currency reform.
There are various reasons for the failures.
Countries that undertook currency reforms when inflation had significantly devalued their currencies managed to stabilize without much chaos. However, those that did so for political reasons fell into severe turmoil.
Just look at Korea as a prime example.
In 1961, the military regime also conducted a sudden currency reform in 1962.
But that was a currency reform carried out haphazardly and unprofessionally.
After realizing the empty coffers post-takeover, the military regime initiated the currency reform to reclaim the money circulating in the underground economy for economic development.
They exchanged a certain amount of cash for new bills, but restricted any excess funds by freezing deposits.
This policy caused severe turmoil, and ultimately, after a month of pressure from the U.S. and clamor from the business sector, they retreated with special measures.
Since then, Korea has developed a trauma surrounding currency reform, so much so that no one dares to bring it up.
Thankfully, Korea managed to recover swiftly, but countries in Africa and South America faced much worse situations.
They did not revoke the currency reforms that were enacted for the benefit of those in power, leading to further devaluation of their currencies despite the reforms.
Of course, I too believed that North Korea needed a currency reform.
However, my approach was completely different from Jang Seong-taek's perspective.
"Let me remind you, extreme currency reform was only a possibility during Kim Il-sung's and Kim Jong-il's regimes. Now, the planned economy is in complete ruins, and the people of North Korea survive relying on the black market due to rationing shortages. If their assets are seized under the pretext of currency reform, a civil uprising could occur. You can't suppress the people with force. You must show that you are different from Kim Jong-il. If that happens, even if you attempt an economic opening, foreign capital won't come to North Korea."
"Then what are we supposed to do? There's a lot of currency circulating in the market, yet almost none is entering the banks. Ultimately, money needs to be circulating for the economy to thrive, right?"
Jang Seong-taek lamented, sounding frustrated.
"You need to understand why this is happening. Is it the fault of the residents hoarding their money away? No, it's the fault of the North Korean government. The mindset of not getting anything back if you save money is widespread, which is why no one deposits it in banks."
"..."
"The economy can only thrive when money is circulating, that's true. It's the foundational principle of a market economy. But that requires trust. Right now, the people of North Korea distrust the banks and the government. Restoring that trust should be the priority."
Jang Seong-taek let out a deep sigh.
He was already aware that he had practically robbed the citizens' savings through the four previous currency reforms.
It was uncertain whether the people, having learned the absurdities, would willingly accept currency reform; that's presumably why he was seeking my advice.
"Boss Kim, how can we regain their trust? No matter how much I ponder, I can't come up with an answer. I feel lost about transitioning to a market economy. If we proceed as is, no one will approach the banks."
To fix the problems plaguing the North Korean economy, it would take more than just a few reforms.
Firstly, the biggest issue was that there was absolutely no trust in the state.
I contemplated Jang Seong-taek's question before responding.
'I never expected they would pull out the card of currency reform this early, no matter how urgent things are.'
However, since the topic had come up, it had to be done properly. The moment it faltered, there wouldn't be a second chance.
"I'm at a loss as to where to start. It's not just currency; there are numerous issues at play. But can you handle the backlash from the vested interests?"
"If they oppose, I can suppress them through force. But the people are different. If the citizens rise up, blood will inevitably be shed. I don't want that."
"Yes, that's right. If you suppress with force, everything we have discussed will come to a complete halt."
No matter how I thought about it, only the worst outcomes circled my mind.
Reading my expression, Jang Seong-taek exhaled another long sigh.
"It seems you are also in the same boat, Boss Kim. I can't come up with a sharp solution no matter how I think it through. Please provide some good advice."
"Huh… I'm not an expert in that area, so I can't make any promises. But if you genuinely plan to embark on currency reform, I will send an expert to Pyongyang."
If only it could be resolved with money, it wouldn't be this complicated.
Reluctantly, I found I had to look for solutions through experts in situations like this.
"Consult with the experts and make your decision. The goal cannot be to seize the people's money as I mentioned before. Can you promise me that?"
"Will a good solution even emerge?"
His face darkened at my suggestion to take the difficult path instead of the easier one.
"If you're asking my opinion, it's simple. Implement currency reform properly. Consulting with experts will minimize the shock, leading to a stable and successful currency reform."
Only then did Jang Seong-taek show a faint smile.
"Huh… I hope it turns out that way."
"At the same time, stop using dollars in places run by the party, such as restaurants and shops. It's absurd to ask the citizens to use North Korean currency while the government's own establishments are utilizing dollars."
There was no way to expect the success of the currency reform while even the state-run shops accepted dollars.
"The exchange rate system also needs adjustment. North Korea's currency must have a suitable system to be recognized on the international stage. That also needs reform."
"Is there a way?"
"That too would need consultation with experts. I believe it's impractical for North Korea to rapidly shift to a floating exchange rate system right now."
Jang Seong-taek nodded quickly, agreeing with my point. I continued to speak.
"Maintain the peg for now, but it should be strictly enforced. Authorities need to directly intervene to prevent the market rate from rising drastically above the basic rate, and ensure free trading of foreign currency. It cannot go on like this, with the problem ignored."
Countries with weak economic power often have to peg their currency to the currency of a stable nation to control inflation.
This was particularly common with countries that used to be European colonies pegging their currency to that of their former European rulers.
Additionally, many oil-producing nations have fixed their currency value to the dollar.
The main reason why countries adopt a pegged system is to eliminate uncertainties regarding exchange rate fluctuations, enabling smoother integration of imports, exports, and capital flows.
'Of course, a pegged system does not only have advantages…'
If the pegged system had only advantages, all countries would have adopted it.
Both the merits and the drawbacks are clear.
If the value of the pegged currency shifts dramatically, so too will the currency of the country in question.
Moreover, the currency's value becomes passively affected, failing to properly reflect the national economy or export competitiveness.
However, for now, North Korea had to maintain the pegged system at all costs.
What had to be resolved was the bizarre situation where the value difference between the basic exchange rate and the market rate was fiftyfold.
If only the market could lower the dollar's value, things would improve significantly. But as the state prevented currency trading, it was inevitable for the dollar's market value to rise.
"Chairman, can we capture the money changers operating in the black market?"
"That's something we can do if we set our minds to it. It's just that we haven't bothered to do so. To succeed in currency reform, we must capture all black market traders. You can't succeed in currency reform without tackling them first."
Jang Seong-taek nodded at my words.
"Alright. Everything should be meticulously prepared in consultation with experts. Also, you must not reveal what you are doing to your closest confidants. They can become the biggest variable."
"I will do just that."
"And…"
I continued to advise Jang Seong-taek on various matters.
He listened intently and we discussed well into the early morning.
I wasn't sure how much of what I said he would follow, but I shared everything I had to offer.
If he adhered to my advice, North Korea could solidify a market economy sooner than later.
It was only at dawn that I was able to exit through the underground parking lot.
"Please stop for a moment."
When I stepped out of the hotel onto the main road, I requested for the car to stop briefly.
The vehicle halted at the roadside, and I stepped out, taking a deep breath.
As the cold dawn air nipped at my nose, I turned my gaze towards the hotel where Jang Seong-taek was staying.
Perhaps lost in thought, I found myself muttering to myself.
"Is Jang Seong-taek the right leader, or is he just a dreamer lost in fantasy? I hope my decision to make him the supreme leader of North Korea wasn't a mistake?"
Then, Manager Ma, who had been quietly standing next to me, replied.
"The future is known to no one. But Boss, you have done what you can as Boss, and because of that, the supreme leader of North Korea is currently here in Seoul. That fact is an unchanging truth."
I couldn't help but smile at Manager Ma's firm voice reminding me only to focus on what I had done.
It seems the meeting today had put my thoughts into a whirlwind.
'I never expected Jang Seong-taek would pull out the card of currency reform, nor was I aware he was struggling with such concerns alone.'
I had only considered gaining economic advantages from North Korea.
Yet here I was, unexpectedly taking on the role of his economic advisor.
I took out my phone and pressed the speed-dial number.
A moment later, a familiar voice echoed through the receiver.
― Oh. Mu-hyeok.
"Hyung, are you busy? Did I call too late? It's already evening there, right?"
― No. I'm just winding down as the market is about to close. It's actually the evening that's busier, with parties going on every day. It's the presidential election season.
Han Gyeong-yeong replied smoothly.
"Have you set up a meeting with Senator Obama yet?"
― Yeah. But are you really thinking of meeting him? How about going to visit Hillary for support instead? After attending Democratic Party functions recently, I noticed that the mainstream of the Democratic Party is heavily aligning with Hillary. Even though the presidential election hasn't happened yet, they've already started preparing for Bush's re-election. It feels like they're just throwing in the towel for this election.
"That can't be right."
― I'm serious! You'll see for yourself if you come over.
In my past life, President Bush had struggled to win the election.
But unlike in my past life, this time he had high approval ratings. So, is the Democratic Party already conceding?
Regardless of what happened, it certainly wasn't Hillary.
"Even so, it's still not Hillary. The presidential election this year hasn't ended yet, and even if it were to conclude in a Democratic defeat, there's still a four-year window. Politicians can change in those four years in unpredictable ways. I feel a strong political vibe from Barack Obama. I haven't met him yet, but I plan to decide whether or not to support him after our meeting."
― You always think outside the box.
There was a note of admiration in Han Gyeong-yeong's voice after a long time. I couldn't help but smile and asked again.
"So, have you secured a time to meet?"
― Yeah. You'll be here in Korea for the National Assembly elections, right? I've arranged for a meeting after that. That should happen by the end of April.
"Great job. Let's grab a drink together since I haven't seen you in a while. But more importantly, can you discreetly find an expert in telecommunications to send to Pyongyang?"
― ······Telecommunications? Pyongyang?
"Yeah. I'm talking about someone who can advise Jang Seong-taek. Money isn't a concern, but I need someone capable and discreet. Can you manage?"
"― Hey, wait. You're not talking about what I think you're talking about, are you?"
He seemed to have caught on even before I finished explaining. He sure was sharp. I smirked slightly, replying,
"Yes, that's exactly what I'm talking about."
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