the profits among senior officials came to the fore in the Jang case.
The New York Times reported that the military tried to reclaim a prosperous crab and clam fishing ground appropriated by Jang and his loyalists; the poorly trained and poorly fed North Korean soldiers were defeated in battle by armed forces that were close to Jang or his confidants. The incident apparently enraged Kim Jong Un, who undoubtedly was egged on by the military and anti-Jang officials, both of whom had much to gain from Jang’s comeuppance. As The New York Times wrote, the “open warfare” among these groups “revealed a huge fracture inside the country’s elite over who pockets the foreign currency.” Ra Jong-yil, a former senior South Korean intelligence official, recounted several other incidents of Jang’s perceived or real acts of misconduct against Kim that might have led to his execution, but he observed that Kim was also to blame for “lack[ing] the leadership to act as mediator” and perpetuating an environment in which discord and deadly competition prevailed.
Since the 1970s and ’80s, the North Korean regime has directed its overseas diplomatic and military officials to generate hard currency through licit and illicit means, while state entities have received the go-ahead to engage in foreign trade. The famine and the new geopolitical circumstances of the 1990s and the early 2000s required the state entities to be even more entrepreneurial and creative, since they had to provide for both themselves and the regime, often blurring the lines between official and unofficial, private and public, state and non-state, licit and illicit. Over the past several decades, diplomatic, trade, and military officials overseas have been charged with generating funds through the drug trade, insurance fraud, and counterfeiting U.S. hundred-dollar bills (the last scheme alone earned the regime between $15 million and $25 million per annum over several years). North Korean entities or their foreign partners have been caught smuggling endangered species products—such as ivory and rhinoceros horns—and counterfeit international brands of cigarettes and drugs like Viagra. At Jang’s level, the highest echelons of the regime’s military and party apparatus controlled the importation of luxury items—one of Jang’s particular skills; buying the elite generous gifts was a key way for the regime to maintain their support—and trade involving weapons and the country’s natural resources.
According to Justin Hastings, an academic who has studied North Korea’s economy, the country’s ability to make money to fund the state and its priority programs, despite the burden of sanctions and international isolation, points to the efficiency and adaptability of its trade networks. Like a criminal syndicate or a mafia, as numerous experts have called North Korea, the state and state-affiliated trading companies use their government prerogatives and protections and their relationships with foreign and North Korean private brokers to facilitate transactions with anyone who will do business with them. In effect, as the Asia specialist Sheena Chestnut Greitens argues, a “symbiosis” has developed “between state-run companies and essentially private enterprises, with political connections required for business to flourish and political actors benefitting from the activities of businesspeople.”
But proceeds from the sale of fake Viagra, methamphetamines, fake hair, and rhino horns, or the smuggling of gold and luxury items through the diplomatic pouch, or even arms deals, pale in comparison to what the state and its affiliates earn from selling coal, iron and iron ore, seafood, and lead and lead ore. Coal is the single largest export; in 2016 alone, coal exports to China earned North Korea $1 billion. But it is just one part of North Korea’s wealth in natural resources. The country reportedly has an estimated total value of between $6 trillion and $10 trillion worth of mineral wealth. It has about two hundred kinds of metals and minerals, including gold, iron, zinc, magnesium, and graphite, and rare earth elements that are critical components of smartphones, digital cameras, computer monitors, flat-screen televisions, and electronic displays. Seafood, one of the reasons for Jang’s trouble, is worth around $300 million per year, according to U.S. estimates. The government also dispatches up to one hundred thousand North Korean laborers to work overseas, mostly in China and Russia, in mining, logging, textiles, and construction, among other occupations, earning the regime hundreds of millions of dollars per year—about $500 million, according to recent U.N. estimates—while the workers themselves get to keep only a small fraction of their wages.
The income generated by individuals and private entities is spent in part to make loyalty payments to satisfy the regime. But