Top South official: Kim Jong-il in full control of North

Kim Sung-hwan, the senior Blue House secretary for foreign affairs and security, said yesterday North Korean leader Kim Jong-il’s health has improved to a point that he has tightened his grip on power.

Speaking at the Northeast Asia Future Forum, jointly hosted by the JoongAng Ilbo and the Hyundai Economic Research Institute, Kim said the North Korean regime won’t collapse anytime soon.

“Kim appears to be in full control of national affairs,” Kim Sung-hwan said. It was his first public speech since he was named to his current post in June 2008.

“The heir apparent [third son Kim Jong-un] also appears to be on a fast track to power,” the senior secretary added. “I’ve never heard anything about power struggles within North Korean leadership ranks.”

Kim also discussed the dire economic situation in the North. Several activists and sources in Seoul have said that last fall’s currency revaluation had led to inflation and that the angry public had staged riots in some places.

“In January and February, many shops in Pyongyang remained closed,” Kim said. “According to a European who recently visited North Korea, some stores have recently reopened but the exchange rate in the black market has shot up to 680 won per dollar, compared to the official rate of 140 won.

“Only the privileged class can afford food and other supplies,” Kim added.

Kim said the North failed to accomplish what it intended to with the currency revaluation, adding, “It appears to have opened up the market and is trying to secure materials from more countries than I had thought.”

Kim, however, expressed uncertainty over a recent report that the North’s investment company Daepung Group will form a $10 billion fund with the China Development Bank to help Chinese companies operating in North Korea.

“So far, they’ve just set a goal, and whether the investment will actually be made remains to be seen,” he said.

Kim also spoke about the South Korea-U.S. alliance, which he said remains strong.

“When I visited Washington last June to meet James Jones, the White House national security adviser, and Jeffrey Bader, senior director for Asian affairs on the National Security Council, they said they had no illusions about North Korea,” Kim explained.

Seoul-Washington cooperation on the nuclear standoff came under fire last September.

At the time, Kurt Campbell, the U.S. assistant secretary of state for East Asia, said he wasn’t aware of South Korea’s grand bargain proposal, under which President Lee Myung-bak offered the North security guarantees and economic aid in return for the dismantlement of core parts of its nuclear arsenal.

Kim said that Campbell was away when the South explained the idea through the U.S. embassy in Seoul and Campbell later apologized for his comments. “We and the United States are on the same page on [North Korea policy],” Kim said.

By Kang Chan-ho, Yoo Jee-ho [jeeho@joongang.co.kr]