That morning, Russia called China with some juicy gossip. Except, it wasn’t exactly gossip as much as it was news about something that would likely bring an awful fate to their dear friend. Still, she was excited about it.
“So,” she started, “I heard from a certain someone that North Korea just launched a very daring currency reform.”
“Yes, yes. You see, on top of changing the value of his currency, he’s implementing a, hmm, strange new rule.”
“Well, he’s increasing workers’ wages one hundred fold!”
“Oh, yes! He’s changing the value of the won from 100,000 to 1,000, but he’s not adjusting the wages. People will still make 350,000 when, really, they should make just 3,500. That’s funny, isn’t it? I imagine it will cause much inflation.”
China mashed his cigarette into the ashtray on his desk. “Should someone… warn him?”
“Let’s let him figure this out on his own.”
“That’s easy for you to say, isn’t it? If something goes terribly wrong, I’ll be the one who has to deal with it.”
“Isn’t that what you said in 1950?” His jaw tightened as he pictured her sly smile. “You handled it well then, didn’t you? I’m sure you could do the same now.”
In 2009, North Korea implemented a currency reform that failed for several reasons. Not only did it try to restrict (and kill) the greatly beloved private markets, it also caused massive inflation because it didn’t adjust the working wages, like, at all.
In 1950, North Korea invaded the South and officially began the Korean War. China was hesitant about the war to begin with, and this proved to be a very smart reservation; when shit hit the fan (i.e., when South Korea fought back with the massive help of UN forces), China–not Russia–was the one who did the most in helping North Korea turn the tides on what had become a losing battle. This was because the UN forces were approaching the North Korean-Chinese border, and China wasn’t having none of that.
Basically, Russia, who gave Kim Il-sung the “OK” to go to war, had less to lose in said war than did North Korea or even China.
Thanks to Andrei Lankov’s The Real North Korea for inspiring this and providing statics on the currency reform.