SEOUL, Dec. 1 (Yonhap) -- North Korea's currency reform has failed to stabilize rice prices and its currency while the nation still endures lack of food and supplies, Seoul's Unification Ministry said Thursday.

   The North carried out a massive currency reform two years ago to try to rein in galloping inflation, squash free market activities and tighten state control over the economy. The measures failed to halt massive inflation and worsened food shortages and public backlash.

   The North Korean won was traded at 35 won to one U.S. dollar in markets right after the currency reform in late 2009. But one dollar was traded at around 3,800 won in November, up from around 2,000 won in 2010, according to the ministry.

   The ministry, which handles inter-Korean affairs, also said rice prices have risen to pre-currency reform levels in a sign of food shortages in North Korea.

   A kilogram of rice cost up to 40 won in 2009 before skyrocketing to about 3,000 won in November, the ministry said in an assessment of the North's currency reform.

   The dire assessment comes as the North is struggling to achieve its goal of building a prosperous nation by next year, the centennial of the birth of the country's late founder, Kim Il-sung, the father of current leader Kim Jong-il.

   The rice prices started to soar in Pyongyang on rumors that Kim failed to secure much aid during his trip to Russia in August, Good Friends, a Seoul-based private relief agency, said in September.

   Rice is a key staple food for both South and North Koreans.

   The botched currency reform is "expected to further deepen public distrust of the authorities and undermine their control on the people," the ministry said in an assessment report.

   Still, North Koreans are unlikely to display any collective action, because there is no organized political force, the ministry said.

   Kim has been ruling the country with an iron fist, and tolerates no dissent.

   There have been reports of growing discontent in the communist country over chronic food shortages and political oppression, though no organized opposition has emerged to challenge the leader.

   entropy@yna.co.kr
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