The gangster state

With North Korea back in the news for nuclear-fueled temper tantrums again, NPR’s excellent¬†Planet Money podcast has rebroadcast a 2011 program about how the hermit kingdom earns hard currency.


North Korea does some legitimate trade with China, supplies cheap labor to South Korean companies operating factories in a “special economic zone,” and builds grandiose monuments in Africa. ¬†But most of its earnings come from weapons, drug trafficking and counterfeiting:

To learn more about the country’s illegal exports, we spoke with Ma Young Ae, a defector who used to work as a North Korean spy. Ma now lives in Virginia where she runs a North Korean restaurant. But back in Pyongyang she was one of the country’s elites.

Ma worked for Kim Jong Il’s internal police force. Her job was was to track down drug smugglers. That sounds like pretty normal law enforcement, except for one difference. She was supposed to stop small-time Korean drug dealers in order to protect the biggest drug dealer in the country: the North Korean government.

Ma told us the North Korean government produced opium on a large scale. But it hid its poppy fields from most of the population. Ma only saw the fields because she was an insider.

After harvesting the fields, the government would put its empty factories to use. The government would turn on its production lines at night and process opium, Ma says. Then they would pack the product in plastic cubes the size of dictionaries and smuggle it out of the country through China.

This was in the mid-eighties, when opium was the big drug. These days the drug of choice for export out of North Korea is ice, also know as methamphetamine.

Ma never smuggled the drugs herself. But she did smuggle something else. When she traveled in China, tracking down those non-government-approved drug dealers, the government didn’t give Ma a corporate credit card.

Instead, she was given a wad of counterfeit dollars. This is another of North Korea’s exports: Counterfeit $100 bills known as super-notes.

Nobody was going to just accept a brand-new $100 dollar bill from a North Korean. Instead, the Chinese would give the North Koreans sixty real U.S. dollars for every fake $100 bill.

It was during these trips that Ma noticed that the Chinese across the river had a much better standard of living than the North Koreans. So, when she had the chance, she defected.

Besides the illegal drugs and the counterfeit currency, North Korea is believed to deal in lots of weapons: rifles, missiles, perhaps even nuclear technology. Just a couple of weeks ago in Lybia, the rebels found a bunch of North Korean rocket launchers in a box labeled “bulldozer parts.”