In addition to the financial benefits the DPRK procures through its nuclear weapons threat, as well as the additional oil and food aid, the regime also generates wealth through illicit activities. These include the counterfeiting of US dollars, drug trafficking, and the sale of weapon parts and weapon technology.
While the most basic levels of development are lacking outside Pyongyang, the North Korean government decided to invest $10 million in an Intaglio printing press – the same type used by the United States Bureau of Engraving and Printing – in the early 1990s.[xv] With this advanced printing press, they have proceeded to print up to $100 million a year of what the secret service refers to as “super notes”.[xvi]
As for the DPRK’s involvement in drug trafficking, some believe the DPRK has been harvesting and selling drugs for the last 30 years, the true extent of this activity is unknown. What little we do know is based upon seizures of these drugs around the world. Drugs seized in these raids include methamphetamine, heroin, and opium and are usually confiscated in quantities worth tens of thousands of dollars.[xvii]
One final way the DPRK finances itself through illicit activities is by selling ballistic missile-related equipment, parts, and expertise. These sales have occurred throughout the Middle East. One recent report found that Burmahas attempted to buy nuclear weapons technology from the DPRK.[xviii] It is already known thatBurma gets surface-to-air missiles, small arms, and artillery weapons fromNorth Korea.
These illicit activities, ongoing and entrenched as part of regime strategy, must be countered to the best of our abilities. This is already occurring on many fronts. The US, along with regional allies, have sought to counter the DPRK by seizing drug and weapon shipments, as well as renewing their commitment to the counterfeiting issue. In 2003 the Bush administrations launched the Proliferation Security Initiative (PSI), which has proven relatively successful. However, there is a specific need to improve technologies that allow for better intelligence, reconnaissance, and interdiction efforts. [xix] As part of PSI, theUS should also seek to prevent the smuggling of drugs. While the proliferation of weapons is certainly more of a security risk, attempting to also ensure the confiscation of drugs would also be worthwhile amid concern to choking off North Korea’s finances.
With a decrepit economy and a weak banking system, the DPRK deals largely in cash, specifically US dollars. For this reason, it is very important to focus on dissolving the governments counterfeiting activities. Recently, an important step has been taken on this front. In February the US government pressured Mancau to freezing $25 million worth of North Korean accounts deposited for laundering purposes at the Banco Delta bank. According to a British banker in Pyongyang, the impact of freeze on the DPRK government “(was) severe”.[xx] TheUS should use the Banco Delta incident as a blueprint for forming similar initiatives. Together with regional allies, banks that deal with North Korea should be pressured to freeze there assets and cease all future transactions with the government.
These illicit activities, coupled with concessions wrought from the nuclear situation, and the oil and food aid from China and South Korea, constitutes a remarkably successful set of financial survival tools that have ensured the regimes continuation. With a flat lined economy and an apprehension to open itself to the outside world for fear of loosing control, the DPRK is reliant upon continued aid from these sources. If our central goal is long-term regime change then we should move to choke off as much of Pyongyang’s finances as is possible. With continually diminishing resources, the government’s strength will falter. As this occurs, instability among the party ranks and within the military will inevitably develop, creating a shaky foundation through which a collapse of the government is more likely.