Pyongyang promoting credit cards

North Korea is promoting financial reform and will encourage its people to both save more and spend money on credit cards, the head of the communist country’s central bank said.

In an interview with the Chosun Sinbo, a newspaper published in Japan by the pro-Pyongyang General Association of Korean Residents, Kim Chon-gyun, the president of the North’s Central Bank, discussed the country’s efforts to overhaul its financial system.

The report was published on Tuesday.

“Our main mission is providing the capital to build the country’s economy through means of smoothly circulating domestic funds,” Kim said. “As a part of the effort, we are developing new financial products and promoting credit card usage by the public.”

Kim said the bank is preparing financial measures to support the creative and self-regulated businesses of economic institutions and companies as the country introduced a new economic management system, indicating that the North will expand loans to companies and stores.

On May 30, 2014, Pyongyang announced an economic reform measure offering more autonomy to farmers, factories and companies, while allowing workers to keep a portion of whatever they produce.

At the end of 2010, the North’s Foreign Trade Bank issued a debit card and Kyoro Bank followed suit, but transactions were rare. But more use is being seen in hotels in Pyongyang, North Korea experts have said.

“Starting four years ago, the North prepared for financial reform by sending officials to Singapore for education,” said Cho Bong-hyun, a senior analyst at the IBK institute.

“Since the North deeply studied credit cards, savings accounts and loans, a specific action plan will soon be announced.”

In his interview, Kim also said Pyongyang has established a new national organization to fight money laundering and terrorist financing.

The National Coordination Committee will be in charge of the mission, he said.

The committee is chaired by a deputy premier and composed of officials from the central bank, Foreign and Finance Ministries and law-enforcement authorities.

The North has been criticized for money laundering for years. Its illicit financial activities invited international sanctions including measures by the U.S. Treasury.

In a move to dodge criticism last year, the North joined the Asia/Pacific Group on Money Laundering, the regional arm of the Financial Action Task Force under the Organization for Economic Cooperation and Development.

BY SER MYO-JA [myoja@joongang.co.kr]