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N.K. sells gold to China in sign of economic crisis

N.K. sells gold to China in sign of economic crisis

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Published : 2013-12-11 20:19
Updated : 2013-12-11 20:19

North Korea has begun to sell large amounts of gold to China in a bid to tide over its economic crisis, multiple sources familiar with North Korea affairs said Wednesday.

The disposal could be an indication of an imminent economic collapse as it goes against founding leader Kim Il-sung’s order to never sell the country’s gold, according to the sources.

“Since several months ago, North Korea has begun to sell even its gold,” one source said, asking that he not be identified.

“Overseas sales of gold are a barometer of whether the North Korean economy is in a crisis or not.”

It is the first time that North Korea has sold gold since its leader Kim Jong-un took power in late 2011 following the death of his father Kim Jong-il, the sources added. Kim Il-sung is the current leader’s grandfather. According to South Korean government data, North Korea holds about 2,000 tons of gold reserves worth at least $8 billion.

North Korea’s economic situation is expected to worsen following the recent purge of Jang Song-thaek ― Kim Jong-un’s once-powerful uncle and guardian ― as he had handled all economic projects with foreign countries, another source said.

An economic collapse in North Korea could lead to greater economic cooperation with South Korea but also increase the risk of a military provocation against the South, experts said.

Meanwhile, South Korea started building a new data transfer system at a jointly run factory park in North Korea on Wednesday, a sign that the cross-border project may not be affected by a political upheaval in Pyongyang.

Three South Korean technicians and 11 North Korean counterparts are working to install the radio frequency identification system at the factory park in the western border city of Gaeseong, an official of the Unification Ministry said.

The system is designed to facilitate travel to and from the factory park ― the only remaining symbol of inter-Korean cooperation that combines South Korea’s capital and technology with the North’s cheap labor. South Korea plans to build the data system by the end of this year, though it could be delayed due to technical reasons, the official said.

The system, when completed, would allow South Korean factory managers to visit the park and return home anytime they want during days when they are permitted to cross the border, he said.

Currently, South Korea faxes North Korea a list of its people who hope to visit the park one day before their trip, and the North permits South Koreans to travel to and from the park only at a previously designated time.

Any trip to the North requires the South Korean government’s approval as well as the North’s consent. The Koreas still technically remain in a state of war since the 1950-53 Korean War ended in a truce, not a peace treaty. (Yonhap News)

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