North Korean Economy Watch

In January 2007 I visited the Islamic Republic of Iran.  Below are my phhotos.  Stories coming soon.

Tehran Photos

Tehran Subway

Golestan Palace

Tehran Bazar

Old U.S. Embassy 

National Museum

Glass Museum

Imam Khomeini Mausoleum

Shah’s palace in Northern Tehran

Road to Qom 

Qom

Road to Kashan

Kashan

Isfahan

The road to Shiraz

Pasargat

Necropolis

Persepolis

Shiraz

Road to Hamadan

Hamadan

From Fox News
George Russell
1/19/2007

U.S. State Department Reveals North Korea’s Misuse of U.N. Development Program Funds and Operations

Has North Korean leader Kim Jong Il subverted the United Nations Development Program, the $4 billion agency that is the U.N.’s main development arm, and possibly stolen tens of millions of dollars of hard currency in the process?

According to a top official of the U.S. State Department — using findings made by the U.N.’s own auditors — the answer appears to be a disturbing yes, so far as UNDP programs in North Korea itself are concerned.

And just as disturbingly, the U.N. aid agency bureaucracy has kept the scamming a secret since at least 1999 — while the North Korean dictator and his regime were ramping up their illegal nuclear weapons program and making highly publicized tests of intermediate range ballistic missiles.

Nothing was disclosed even to the UNDP Executive Board, which oversees its operations and is composed of representatives of 36 nations — including the United States and, this year, North Korea itself.

That fact is sure to be a bombshell at the Executive Board’s regular annual meeting, which begins Friday and extends through Jan. 26. Among the main items to be discussed is the $18 million, two-year UNDP budget in North Korea.

Moreover, the period of scandal and secrecy in the UNDP’s North Korean operations coincided in large measure with the tenure of Mark Malloch Brown, most recently Deputy Secretary General of the United Nations itself, as administrator of the UNDP.

[…edited…]

From at least 1999 to at least 2004, it appears the UNDP, and the U.N. itself, had no idea what Kim Jong Il did with the aid agency’s money, ostensibly intended for aid programs ranging from development of energy programs and small and medium sized businesses, and for environmental protection.

But the UNDP had plenty of warnings from auditors it had contracted to look at the program during that period, and who signaled loudly that something was badly awry.

In a letter sent to the UNDP on Jan. 16, Mark Wallace, the U.S. State Department ambassador at the U.N. for management and reform, wrote that the auditors’ testimony shows it is “impossible” for the U.N. aid agency to verify whether its funds “have actually been used for bona fide development purposes or if the DPRK [North Korea] has converted such funds for its own illicit purposes.”

Ironically enough, neither Wallace nor the U.S. government has been allowed to obtain copies of the audits, which are deemed “management tools” by UNDP bureaucrats and therefore not even available to governments that pay for the organization.

Their contents came to light only after Wallace and the U.S. demanded an opportunity to view the audits at UNDP headquarters, and took careful notes based on the documents. Wallace reiterated the contents in his letter, addressed to Ad Melkert, the UNDP’s No. 2 official.

The difficulties in finding out what the UNDP was doing in North Korea were apparently something that U.S. diplomats and UNDP auditors shared.

Wallace relates in his letter that whenever the auditors, contracted from the consulting firm KPMG, tried to discover what was going wrong, they were either limited in what they were allowed to investigate, or they were forced to accept “sham” audits done by the North Koreans themselves.

The picture painted by the auditors, according to Wallace, shows a U.N. agency that “operated in blatant violation of U.N. rules.”

The UNDP allowed members of Kim’s regime to “dominate” local UNDP staff, who were apparently first selected by the North Korean government itself, the auditors said, and added that Kim’s operatives even ran “core” financial and managerial functions directly.

The regime also demanded cash payments from the aid agency in violation of U.N. rules, and kept UNDP officials from visiting many of the sites where development projects were supposed to be underway.

On at least three occasions, in 1999, 2001 and 2004, the KPMG auditors filed reports that brought troubling aspects of the situation to the attention of UNDP headquarters, recommending “timely corrective action.” There is no evidence that any such action took place.

Just exactly how much money the UNDP funneled into North Korea in all those years is not revealed in Wallace’s letter. But he notes that in 1999 there were 29 ongoing UNDP projects in North Korea, with a total budget of $27.86 million. Two-thirds of the programs were so-called “National Execution programs” run by North Korea directly, using UNDP money. The other third was ostensibly run by UNDP itself.

But that may not have made a difference. The auditors complained that even UNDP-run programs paid for everything in cash, which is against UNDP policy, at prices set by the Kim regime, and to suppliers that the regime designated. There were not even any purchase orders involved. The regime provided no audits of the programs under its own direct control.

In his letter to Melkert, Wallace called for a “full independent and outside forensic audit” of UNDP’s programs in North Korea, going back to at least 1998.

Only “the bright light of real oversight” would allow the UNDP’s overseers to decide whether any or all of the programs should be continued, he said.

Asia Times
Bertil Lintner
1/18/2007

While the West and Japan have targeted North Korea’s overseas bank accounts to curtail its weapons program, Pyongyang has recently turned to more ingenious ways of maintaining its international businesses through substantial exports of gold, silver and other valuable metals.

Pyongyang has apparently found a willing conduit to global buyers through its many business connections in Thailand, which has recently emerged as the isolated state’s third-largest trading partner after China and South Korea. According to official Thai Customs Department statistics, North Korea shipped 500 kilograms of gold worth 398 million baht (US$11 million) to Thailand last April.

The following month, another 800kg of gold worth 635 million baht landed in Thailand courtesy of North Korea. Also, in June, 10 tons of silver worth 148 million baht was sent from North Korea to Thailand, followed by 12 tons worth 166 million baht last October.

In sum, North Korea exported 1.35 billion baht – or nearly $40 million – worth of precious metals to Thailand last year.

That is a substantial figure for North Korea, a country with an estimated gross domestic product of about $22 billion and whose total exports amounted to just over $1 billion, according to official statistics. Thailand is bound by the international sanctions imposed last October against North Korea by the United Nations in response to Pyongyang’s exploding an atomic bomb.

According to official Thai statistics, the gold and first consignment of silver were shipped to Thailand before the UN sanctions were imposed. But there is nothing illegal in North Korea exporting precious metals, unless, of course, the income from the sale can be tied directly to the country’s controversial weapons programs, which anyway would be extremely hard to prove.

Untapped riches
North Korea’s gold and silver mines remain largely untapped. According to Tse Pui-kwan, a Chinese-American chemist who joined the US Bureau of Mines in 1990, North Korea has significant deposits of copper, gold, graphite, iron, lead, magnesite, tungsten and zinc. When the Cold War ended and North Korea lost large amounts of foreign aid from both the Soviet Union and China, its mining industry fell into disrepair and extraction activities sharply declined.

But with new foreign cooperation, production has resumed, which the recent exports to Thailand clearly demonstrate. North Korea’s main gold mine is in Unsan county in North Pyongan province, about 150 kilometers north of Pyongyang. It was originally opened by a US firm in 1896, when Korea was still an independent and unified kingdom, and was later taken over by a Japanese company when the peninsula became a colony ruled by Tokyo in 1910.

Nearly a century later, consultants from Clough Engineering of Australia in 2001 inspected the same mine under the sponsorship of the United Nations Office for Project Services. They estimated that Unsan held 1,000 tons of gold reserves, which if true would make it one of the world’s major gold mines. Silver is also mined in the same area, while iron ore and magnesite are found in North and South Hamgyong provinces in the northeast.

North Korea’s extraction techniques are sometimes controversial. According to witnesses interviewed by the US Committee for Human Rights in North Korea for its 2003 report “The Hidden Gulag: Exposing North Korea’s Prison Camps”, there is a gold-mining labor camp near Danchun in South Hamgyong province, where thousands of prisoners are being held and forced to work under abysmal conditions.

In that same report, several witnesses claimed that “some of the mine shafts dated back to the early days of the Japanese occupation of Korea in the early 1900s. Accessing the veins of minable gold required descending and, later, ascending a wooden staircase 500 meters in length, using gas lanterns for light. Deaths from mining accidents were a daily occurrence, including multiple deaths from the partial collapse of mine shafts.”

The first attempt to modernize North Korea’s gold-mining industry was made by an Italian financier and former Foreign Ministry official, Carlo Baeli, who traveled to the country in the early 1990s and claims to be the first Westerner to do business with Pyongyang since the Korean War. He later wrote a book called Kim Jong-il and the People’s Democratic Republic of Korea, which was published in Pyongyang in 1990, obviously with official permission as it was printed by the state-owned Foreign Languages Publishing House.

Apart from painting a flattering portrait of the North Korean leader, the book describes Baeli’s first trip to Pyongyang in 1990, of which he wrote, “We were interested in investing in the mining industry, mainly in the extraction of gold and granite.” Baeli later signed a contract for a loan of $118 million to purchase mining equipment, and the goal was to resurrect no fewer than six gold mines across North Korea. The money was to be provided by international banks such as Midland Bank and the Naples International Bank. He also arranged for the mining equipment to be shipped from Italy.

But heavy flooding in the mid-1990s damaged both the equipment and the mines and, according to a 2006 report in Forbes magazine, Baeli today works as an adviser to the Pyongyang government at a tire-recycling plant. The car and truck tires are imported from Japan, get ground into granulate in North Korea, and are sold to China for road resurfacing, car mats and shoe soles. A lucrative business, perhaps, but not quite the golden dream Baeli had when he first arrived in Pyongyang nearly 17 years ago.

Another unusual partner in North Korea’s gold trade may have been the late Philippine dictator Ferdinand Marcos. In August 2001, the right-wing South Korean newspaper Munhwa Ilbo published a story claiming that Marcos in September 1970 had deposited 940 tons of gold bars at a Swiss bank in the name of the late North Korean dictator, Kim Il-sung. The report came from a former Marcos aide, and Munhwa Ilbo carried a copy of the bank-account certificate on its front page. The alleged gold bars were part of what a Japanese army general had looted from Asia during World War II, Munhwa Ilbo claimed.

That report was never independently confirmed, but it nevertheless reflects the mystique and speculation that still surround North Korea’s gold industry – and how little the outside world actually knows about it.

Financial pressures
When the US took action against Banco Delta Asia in Macau in September 2005, labeling it a “primary money-laundering concern” for North Korean funds, very little evidence to substantiate the charges was ever produced. North Korea lost $24 million when the accounts it held with the bank in the name of a front company, Zokwang Trading, were frozen. Zokwang, which had been operating in Macau for decades, also closed its office and relocated to Zhuhai province across the border in China proper.

The action against Banco Delta Asia, a privately owned bank that the Macau government later had to prop up to prevent it from collapsing, was the second move against North Korea’s assets abroad. In a much less publicized action, North Korea’s only bank located in a foreign country – the Golden Star Bank in Vienna – was forced to suspend its operations in June 2004. The Golden Star was 100% owned by the Korea Daesong Bank, a state enterprise headquartered in Pyongyang, and was allowed to set up a branch in the Austrian capital in 1982.

For more than two decades, Austrian police kept a close eye on the bank, but there was no law that forbade the North Koreans from operating a bank in the country. Nevertheless, Austria’s police intelligence department stated in a 1997 report: “This bank [Golden Star] has been mentioned repeatedly in connection with everything from money-laundering and distribution of fake currency notes to involvement in the illegal trade in radioactive material.”

Eventually the international pressure to close the bank became too strong. Sources in Vienna believe the US played an important behind-the-scenes role in finally shuttering Golden Star’s modest office on 12 Kaiserstrasse in the Austrian capital. Until then, Vienna had been North Korea’s center for financial transactions in Europe and the Middle East. Visitors to North Korea have noted that euro coins in circulation in the country – the US dollar is not welcome in Pyongyang – invariably came from Austria. (Euro notes are the same in all European Union countries, but coins designate individual member countries.)

Last October, in response to Pyongyang’s nuclear tests, Japan froze a dollar-denominated account that North Korea’s Tanchon Commercial Bank held with an unnamed Japanese bank. The account had a balance of $1,000 and had not been active for nearly a decade, so the move was mainly symbolic: to demonstrate to North Korea that it cannot use banks in Japan for any deposits, big or small.

So it is hardly surprising that North Korea is looking for new ways to manage and maintain its international business interests and for new partners when it is increasingly locked out of most foreign countries. That is where Thailand apparently comes into the picture.

In 2004, trade between Thailand and North Korea for the first time overtook trade between Japan and North Korea. Previously, a string of North Korean-controlled front companies, managed by the Chosen Soren, or the Pyongyang General Association of Korean Residents in Japan, had supplied North Korea with computers, electronic goods and other vital items.

In 2003, North Korea’s total trade volume to Japan was just over $265 million and fell even lower in 2004. At the same time, trade between Thailand and North Korea rose to more than $331 million in 2004. Two-way trade between Thailand and North Korea totaled $328 million in 2005, with Thai exports to North Korea amounting to $207 million and North Korean imports to Thailand totaling $121 million.

During January-November 2006 – the latest statistics available from the Thai Customs Department – trade totaled about $345 million, with Thai exports accounting for $200 million and North Korean imports $145 million. Thai imports of gold and silver have pushed those trade figures higher.

North Korea’s trade with Thailand grew mainly under the previous government of Thaksin Shinawatra, who at one point proposed signing a free-trade agreement between the two countries. In August 2005, Thaksin was formally invited by Kim Jong-il to visit Pyongyang. The visit never materialized, and since Thaksin was ousted last year in a military coup, the future of Thai-North Korean relations is very much in doubt.

But gold and silver are highly fungible and North Korea apparently has lots of the commodities. It appears Kim Jong-il has for now found at least one golden path around the international sanctions imposed against his regime’s nuclear tests.

Well, if you are tired of paying all those middlemen for your treasured copies of The Great Leadership for the Victory of Building the Powerful State or The Great Leader Kim Jong Il Gives on-the-Spot Guidance to Various Sectors (Part 11), then www.NKeconWatch.com would like to point out where you can get these and other fine publications right from the horses mouth: Korean Publications (their site is a little slow).

Everything you wanted to know about minerals in the DPRK and their export  can be found in these USGS reports (In PDF format):

 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 |

Well it seemd that the DPRK embassy in Vienna, Austria, is doing its part to promote exports from the fatherland.  It has launched a web-based export business at: http://www.dprkorea-trade.com/.  Althought it looks like the site has not been updated since 2004, they are still offering sales on goods such as:

Calcium Carbonate, Artemisia Herb Oil, Eleutheorcocci Senticosi Extract & Powder,Perilla Herb Oil, Pine Needle Oil, Graphite Brush Plates and Powder, High-Powered Water Purifier, Beauty Appliance MN-63B, Printing Photo Images on Stone Tablets,  Tin-Free, Non-Toxic, Anti-Fouling, Anti-Corrosive, Inorganic Paint, Mechanical Seals, High-Strength Structure Adhesive, Sang-Hwang Mushrooms (Phellinus Linteus), Water-ring Screw Compressor, Technique for Greening of Sandy Soil, Pneumatic Transport Equipment, High-Powered Ultramicro Grinder

Commercial Section,
Embassy of the DPR. Korea in Austria
Schweglerstr. 21/3, A-1150 Vienna, Austria,  
Tel: +43-1-982-2082,  Fax: +43-1-982-2084,
e-mail: info@dprkorea-trade.com

The Nation
1/18/2007

North Korea’s energy minister has been fired because he suggested that the power supply to leader Kim Jong-Il’s guesthouse should be diverted for public use, a Japanese newspaper said Thursday.

Ju Tong-il, minister of power and coal industries, was fired late last year by the leaders of the impoverished Communist state, the evening edition of the Mainichi Shimbun daily said in a story from Beijing.

“Our country’s energy situation is extremely severe,” Ju told a meeting of energy-related officials last spring, according to the daily, quoting unnamed sources close to the North Korean government.

“Or better yet, why don’t we get back electricity fed to the guesthouses of our general?” Ju reportedly suggesting, referring to Kim.

Ju later excused his remarks, saying: “I just wanted to express the fact that our domestic electricity condition is paralyzed.”

But he came under fire from leaders of the ruling Workers Party and was then dismissed, the daily said.

Agence France Presse

Golden Villas, Let’s Share Electricity!
Daily NK
Yang Jung A
1/19/2007

While North Korea’s electrical power supply worsens, North Korea’s Premier Park Bong Ju pushes for the expansion of energy supply and civil electrical support only to receive a personal punishment from authorities or in actual, his position changed.

“As a result of energy and other issues, Ju Dong Il, the Minister of the Electricity and Coal Industry was removed from his position” a Japanese newspaper “Mainichi” reported on the 18th, citing a source related to the North Korean government.

The Minister Ju was known for his proposal on energy made at a policy meeting early 2005 where a comment was made “The electricity situation in our country is seriously grave” and suggested “How about we redirect the electricity from our leader’s personal residence and use that.”

This proposal suggested that the electricity crisis be partly solved by redistributing some of the electricity supplying Kim Jong Il’s numerous personal villas throughout the nation, to much needed industries and homes.

As the Minister Ju realized his comments had set a predicament, he tried to justify himself stating “I simply wanted to express that the country’s electricity is in an immobilized state” but was known to have been reprimanded by the central authorities and his position changed. Since last October, the Ministry of the Electricity and Coal Industry had been separated to the Ministry of Electrical Industry and the Ministry of Coal Industry.

In the same month, Premier Park expressed his concerns on the export of coal to China at a trade conference saying “If this situation continues, our country will be faced with serious implications from the energy crisis. The people will be unable to use their central heating and industries will stop. It would be better to refrain from further exports.” The newspaper also mentioned that Premier Park had gone to the extent of submitting a proposal and that the ministry had even settled on the suspension of coal exports.

However, following the nuclear experiment, the National Defense Commission asserted that the acquirement of foreign currency was an absolute necessity in strengthening the military and strongly urged for the resumption of exports. In the end, the ministry’s decision was overturned and exports recommenced.

Though Premier Park has not yet been replaced, under the orders of authorities, he is known to be spending his time in self-discipline as “for now, revision is necessary.” Though Premier Park’s name is listed on the roll of honors, he has not been seen in the presence of Kim Jong Il. 

Daily NK
Han Young Jin
1/18/2007

In order to block an “open hole,” North Korean authorities have been installing mobile phone detectors on the northern border to prevent further defectors from leaving the country.

In a phone conversation with family in Hoiryeong, Kim Man Sung (55, pseudonym) a defector residing in Yangchon, Seoul discovered on the 15th “In the neighborhood of Hoiryeong, 6 mobile phone detectors have been installed” and that “if a phone call is received, the detectors activate within a minute and trace your whereabouts.”

In the past, if a person was caught being in contact with South Korea, they would receive punishment from the labor training camps and the matter was over. However, now the National Security Agency are going around saying “if you are caught using a mobile phone, you and all your family will be expelled from your village,” informed Kim. In spite of this, no one knows the make of the detectors set up along the border, nor its performance quality.

For the past 3 years Kim has acted as an intermediary for South Korean families and defectors in search of their relatives on location at the border. He said “Particularly because of intensified border controls, we are experiencing many difficulties.”

He said “Lately, whenever the police (officers from the Safety Agency) board the trains they conduct ‘fastidious inspections’ on city dwellers” and added “The Safety Agency incessantly inspects lodging facilities and motels regulating citizens that may be roaming near the border in attempt to contact their family.” It seems that the ‘fastidious inspections’ are being strictly enforced.

Since mid-December, North Korean authorities have established 5 united forces with the aim of conducting extensive control. These groups, the Party, National Security Agency, Safety Agency, prosecutors and military security will enforce action and punish boarder guards who receive bribes and help defectors.

As inspections tighten, the expenses of defectors secretly crossing to China has also increased. In the region of Hoiryeong, Musan, defecting to China would cost 400~500 yuan per person but now the disbursements have exceeded 1,000 yuan and in Haesan the price has even reached 2,000~3,000 yuan.

Recently, rather than receiving bribes from individual defectors, boarder guards have been reluctant to receive bribes from families. Though there is a possibility that individuals may return it is rare that families return and hence the greater investment lies on individuals. Also, if a defector is caught by Chinese police and repatriated, there is a possibility that the escape route will be discovered. In that case, the border patrol in charge of that region will be punished.

More recently, the National Security Agency has reinforced their efforts to catch defectors in China themselves. Kim informed, that the workers of restaurants and hotels in Yanji and Longjing in China, are all staff from the National Security Agency and that more than 90% of visitors to China are connected with the Safety Agency acting as “spies” with orders to aid the abduction of defectors.

Asia Times
Robert Neff
1/18/2007

In a country infamous for famines, it is no wonder that cattle in North Korea are prized so highly and considered “national property”. According to government sources, North Korea had about 575,000 head of cattle in 2002, but considering the recent floods and food shortages this number may have dropped. In addition to the floods and food shortages, North Koreans must contend with the bovine diseases that cause health concerns not only to the cattle, but also for the people.

The most serious incident took place last summer. It began in the North Korean region of Yanggang. A horrible and mysterious disease that the frightened residents called “leprosy” for the impact on victims, causing them to break out in boils and oozing skin that progressed to the point that, as one North Korean defector described it, left its victims looking “like pieces of sliced meat”.

The story was first reported by the North Korea Daily (July 27, 2006), which described the disease as an epidemic, but no one knows just how many victims it has claimed. One defector living in South Korea told a newspaper reporter that he had spoken with some members of his family still in North Korea who informed him the “rotten flesh disease” was spreading throughout the northern provinces.

Many North Korean residents believed that the disease originated from contaminated beef sold in the Jangmadang markets. Apparently there was some truth to their suspicions. According to the North Korea Daily, the sale of beef and the movement of cattle in the region were banned or tightly controlled.

What was the disease? Several veterinarian experts contacted suggested that it was anthrax, a naturally occurring disease among cattle and other hoofed mammals. All agreed that if a person ate the flesh of an anthrax-diseased animal he had a high risk of dying.

But not all of the experts agreed that it was anthrax. Dr Martin Hugh-Jones of Louisiana State University conceded that the “oozing skin sores” might well be anthrax cutaneous lesions, but “while it is tempting to suggest ‘anthrax’, I know of no lesions involving peeling skin or people looking like ‘sliced meat’.”

It is almost inconceivable that people would willingly eat the flesh of a possibly diseased animal, but it has happened several times in North Korea. In fact, many North Korean people believe that contaminated meat can be eaten if it is boiled at 100 degrees Celsius or higher.

Last January, farmers in the Tuman River region began to lose cattle to a disease they simply called the “cow disease”. The cattle all displayed the same symptoms: hooves splitting, heavy drooling, and sores in their mouths and on their tongues. Local health officials were called in. They determined that the disease had traveled across the Tuman River from China.

In December 2005, China reported several outbreaks of foot-and-mouth disease in the interior provinces, but it was suspected that the disease had also spread to Heilongjang province, one of China’s key cattle raising areas located along the North Korean border, and possibly into neighboring Russia.

Dr Peter Roeder of the Food and Agriculture Organization of the United Nations and Dr Hugh-Jones agree that the symptoms appear to be indicative of foot-and-mouth disease. Roeder stated, “I did not have information that it had got into North Korea but I am not surprised.”

At least one region was quarantined to prevent the spread of the disease. Cattle that displayed any of the symptoms were quickly killed and buried in deep pits in a further effort to prevent the spread of the disease. Despite the North Korean officials’ precautions to ensure that the cattle carcasses were buried, it was soon discovered that two of the infected cows were missing. Someone had dug them up.

The local officials warned the people that eating the contaminated meat could kill children under the age of five. Roeder insisted that foot-and-mouth disease did not affect humans, and Hugh-Jones supported him by adding, “Eating such a carcass should not of itself be dangerous other than the usual dangers from eating meat from sick and moribund animals.”

Did contaminated meat cause the strange leprosy-like disease that allegedly plagued Yanggang? Were diseased cattle carcasses dug up from pits, butchered, sold and eaten by hungry or greedy residents? Both doctors agreed that North Korea is a black hole for disease information and that in such countries nasty diseases will be politically unattractive and therefore official reports will be played down and minimal.

Both doctors were again in agreement when they observed that defectors and refugees have a poor record of reliability in what they say and write. Exaggeration is the commonest characteristic, they said.

But not all possibly contaminated meat originated in North Korea.

In 2001, during the height of the bovine spongiform encephalopathy (mad-cow disease) scare in Europe, many countries slaughtered hundreds of thousands of head of cattle in an effort to check the disease. Famine-stricken North Korea agreed to accept some of the possibly contaminated beef from Germany and Switzerland (see German meat may be North Korean poison, Asia Times Online, February 23, 2001).

As retired veterinarian Patricia Doyle noted, “It is a very nasty stunt to pass on infected cattle to any people, regardless of their ideology. It is the government who may have political differences not the people.”

But if a government would be desperate enough to feed its citizens meat possibly contaminated with a fatal disease, how far are starving people willing to go to satisfy, if only for a short time, the hunger in their bellies? Further, it seems, than most of us would like to acknowledge.

Daily NK
Yang Jung A
1/18/2007

On the 9th, a Japanese broadcast “tv asahi” exposed footages of drug smuggling at a boarder station between North Korea and China.

The footage caught a North Korean dealer crossing the Tumen River via a tube. On meeting a female Chinese dealer, the North Korean dealer unraveled a pink package which contained an envelope written “Opium powder” in red.

The drug seems to have been manufactured at “Ranam pharmaceutical factory.” This factory is known for its manufacture of mediocre drugs. Although opium is normally supposed to be packaged as medication, it is common that the drug falls into the hands of smugglers.

The moment the Chinese dealer gets hold of the package, she confirms the quality of the drug and hands over Chinese currency. The North Korean dealer counts the money and scurries back over to North Korea. It was agreed that additional dealings would be made via the telephone.

The transaction that was made on this day was 8~9 bags, each containing 100g of opium. 

As the international community continues to enforce its regulations against drugs and counterfeit dollars, drugs dealings have taken effect in North Korea with increasing illegal trades occurring between China and North Korea, the broadcast claimed. In addition, the number of drug addicts in North Korea is also on the rise.

The footage also captured the North Korean drug dealers sniffing the drugs as well as the dealers talking about the transaction. Of the dealers, one person was a worker managing the level of humidity at a manufacturing factory and seemingly the intermediary supplier who obtained the drugs.

It seems that the 3~4 people sitting in a circle are personally testing the quality of the drugs before purchase. Although the dealer’s child has entered the room, the buyers continue to inhale the drugs.

The woman who seems to be buying the drugs in this footage, scrupulously inhales the drug as if her body was very accustomed to it.

The woman showed signs of drug addiction murmuring “I’m so used to it (taking drugs). My hardest moment was when I was in custody. If I can’t sniff any drugs, my nose is runny and my head spins.”

Also, she suggested that drug addiction had spread throughout North Korea “It has spread from the top, right to the bottom.”

As the dealers need to give bribes to the border guards, a deposit is first received then the balance paid after the goods given.

Comments were also made on the distribution of the latest drugs. The latest drug, blue in color is made naturally and is much more effective than the original, so is very popular amongst the rich.

Of the people there, one man was acting as the link to the boarder patrol, whereas the remaining people examined the issue of reliable Chinese buyers.

The first footage exclusive of North Koreans communally taking drugs was exposed in Korea by the DailyNK in October 2005.