North Korea removes finance minister, central bank governor

October 5, 2000
Web posted at: 1:33 PM HKT (0533 GMT)

TOKYO, Japan (Reuters) -- North Korea has dismissed its finance minister and central bank governor in a move that could signal a shakeup in the communist state's rigidly centralised financial system, analysts said on Thursday.

The official Korean Central News Agency, or KCNA, in a dispatch issued late on Wednesday, gave no reason for the dismissal of Finance Minister Rim Kyong-suk and Central Bank President Jong Song-thaek.

The agency, monitored in Tokyo, said Mun Il-bong -- a member of the Supreme People's Assembly -- had been appointed finance minister and that Deputy Finance Minister Kim Wan-su had been appointed top central banker.

MESSAGE BOARD North and South Korea

"Often, when there are personnel changes in North Korea, it's for something like a personal misdoing. There have been a number of examples of trade personnel being sacked for, say, corruption," said Noriyuki Suzuki, chief analyst at the Tokyo-based Radiopress news agency, which monitors events in secretive North Korea.

"But to sack both the finance minister and central bank governor at once is highly unusual and suggests they may be trying to reform their entire public finance system," Suzuki said.

"Of course, we have no idea of what the direction of that reform might be," he said, adding the two top figures might also have been dismissed due to the poor state of North Korean public finances.

North Korea is one of the world's most impoverished countries, with a per capita income of about $1.50 a day. Its economy is the equivalent of less than 0.2 percent of U.S. gross domestic product.

Takashi Nobehara, at the Japan Research Institute, said that the significance of the personnel change depended on the background of the new ministers, still much of a mystery.

"It is obvious that North Korea is clearly trying to change direction in some areas," he said, referring to Pyongyang's recent push towards diplomatic engagement with the West.

"In that case, reform of the financial system is one of the first things that comes to mind."

North Korea, strapped for cash and hard-hit by food shortages that look set to continue after severe droughts and flooding this summer, has been reaching out to the West. Ties with South Korea are also warming after an historic North-South summit in June.

"Although the financial ministers have not been much in evidence during recent talks with South Korea and Japan, it is certainly true that if you look towards the future -- and possible investment from South Korea -- the financial system will definitely need reforming," Nobehara said.

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