Organized crime enters North Korea’s markets

From the perspective of North Korea’s poor, the era of Kim Jong-un has been a time of increasing state control over information and borders, but also a time when the state has taken a relatively (by North Korean standards, anyway) laissez-faire approach to market trade. There are exceptions, of course, including crackdowns on South Korean imports and on the Chinese mobile phones that could have made cross-border trade so much more efficient, but the general trend is for State Security Department officers to collect taxes — and bribes, of course — and let merchants work out affairs among themselves.

Inevitably, that has led to the rise of an industry of men who will, for a price, help people “work out affairs” among themselves. In this sort of system, the litigant with the most wealth and power has the advantage and invariably uses it to suppress competition.

“Wealthy and powerful donju and merchants often hire mob members to secure their business interests. The mobs have contacts in powerful organizations, so as long as they pay bribes to various officials, they are untouchable by ordinary citizens.”

According to the source, there is an unwritten rule in North Korea’s markets to not intrude in each other’s business areas. There are also frequent cases in which trust has been established between merchants who acquire products and donju who provide cashflows, featuring transactions with ‘post-payment systems’ for half of their trade money. [Daily NK]

Local merchants also use violence to control prices, including by beating up merchants who undercut their competitors’ prices. The police don’t care, so “muscle has become the rule of law in the markets.”

“In July, a woman in Pyongsong City requested a mob member take care of a merchant who stole the donju she was trading with. The merchant was attacked with a knife and left with an ugly scar on his face, although he was not seriously harmed,” a separate source in South Pyongan Province reported. As such, she explained, locals are increasingly saying that in order to survive in the markets, one needs to be fiercer than wolves without a conscience, and that the law is useless and safety is only assured via close relations with mob members.

The Daily NK reports that sanctions are exacerbating the ferocity of competition for certain products, like solar panels, and causing “frequent conflicts” among merchants. That is too bad, because solar panels help people to achieve a degree of independence from state control. There are no U.N. or U.S. sanctions that prohibit the export of solar panels to North Korea, but it’s possible that de-risking by banks and the freezing assets of state-connected trading companies is having spillover effects. That’s to be expected, I suppose. One hopes that in time, small independent traders will find ways to supply this demand.

The real story here, however, may be that Pyongyang is starting to cede its monopoly on the use of violence, a subject that Thomas Hobbes and Max Weber both wrote about extensively. This is not to say that organized crime in North Korea is entirely new. Pyongyang has long partnered with organized crime groups in Japan to skim off pachinko revenue or the Russian mob distribute counterfeit $100 bills. Some scholars believe that Pyongyang largely outsourced its drug trade to organized crime groups a decade ago. Others say that North Korea’s government is itself an organized crime family with a flag and a seat at the U.N.

What is new is that ordinary, non-elite North Koreans are now going around the state to seek justice, or injustice, through violent means from providers that the state itself does not tolerate, but which its corrupt police do, for a fee. The inevitable reaction to this will be, first, a loss of legitimacy by the state, and eventually, the rise of vigilantes, perhaps backed by mediators and informal courts, to keep the peace that the state will not. As with the rise of guerrilla journalism and guerrilla clinics, the rise of guerrilla justice would be an important step toward the creation of undergovernments like the ones I wrote about here.

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Class struggle in North Korea

“The history of all hitherto existing society is the history of class struggles. Freeman and slave, patrician and plebeian, lord and serf, guildmaster and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, that each time ended, either in the revolutionary reconstitution of society at large, or in the common ruin of the contending classes.” 

– Karl Marx, The Communist Manifesto

And yet, no place is quite so perfect a laboratory for Marx’s ideas of class struggle and alienation as the state that some neo-Marxists claim as a paradise of socialism, even as others wishfully declare that capitalism is breaking out there. Both views are wrong, of course. North Korea hasn’t been socialist for a long time. Its officials are accomplished profiteers and money launderers. It practices economic totalitarianism because that serves its greater goal of political totalitarianism. One form of economic totalitarianism is as good as the next:

Recent reports suggest that the consumption gap is widening in Pyongyang, increasing tension between North Korean residents and the regime. According to sources inside the country, the newly affluent middle class, known as the donju, are fueling the trend by providing premium high quality products to wealthy customers while offering sub-standard items to ordinary citizens.

“Pyongyang, the heart of the revolution, is becoming a place of severe income disparity – even more so than in a capitalist state. This is because the privileged classes are in control of the Pyongyang Department Store [No.1], the General Markets, and the trading infrastructure,” a source in South Pyongan Province told Daily NK on February 27. [Daily NK]

What the report really describes is state capitalism, or crony capitalism, in which most Pyongyang residents rely for their needs on markets that are rigged by a predatory oligarchy that profits from its political connections, not its merits or talents. Party officials, their wives, and their relatives have used those connections to seize control of state stores, markets, and the trade in the goods that fill them. They have a de facto monopoly that excludes all but the highest rungs of North Korea’s political caste system:
What this has resulted in is a situation in which all the prosperous individuals are either direct relatives of officials or those who donate significant loyalty funds to government departments. Having absolute power over trading infrastructure, the donju have taken control of the market in Pyongyang with the authority to import foreign goods freely, and price them however they wish.
Any poli-sci professor at Berkeley could have told you the inevitable outcome of that:
As a result, many residents are feeling alienated from the benefits of marketization, and complaints against the regime are rising. In addition, criticisms are increasingly targeting the wealthy class who are openly squandering their money while maintaining their wealth through the political control of enterprise assets.
Consequently, the report says, “the majority of” Pyongyang residents have come to detest the donju and their conspicuous consumption.
Some of the more opinionated residents are saying that, ‘They (the cadres and donju) should be bumped off first if a war breaks out,'” a source in Pyongyang added.
Marx may or may not have said that (though Douglas Adams said something very much like it). Incidentally, North Korean defectors have told me that “when the war comes” is code talk for revolution. This is the natural result of Kim Jong-un’s policy of enriching the party elites while keeping everyone else just hungry enough to control them efficiently and enslave them profitably. Is there some law against the CIA sowing Marxist agitprop? It is malpractice that our own government’s broadcasts and information operations fail to exploit the timeless and universal appeal of class struggle, given the legitimacy of its basis in the capital of such a dangerous enemy.

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North Korean market traders are fighting The Man

Via Yonhap:

“It’s not that hard nowadays to see women stand up to despotic wardens and security agents while shaking their fingers at them at jangmadang,” the Radio Free Asia (RFA) said, citing a source in Pyongyang who recently visited China. “In such cases, nearby observers also join in and push the officials, something that was very rare to see just a few years ago.”

Now North Korean people are no longer giving in to officials unconditionally, the source said.

A Chinese businessman, who frequents the North’s Rason Special Economic Zone, also said: “Traffic wardens usually blow whistles to stop motor bikers whenever they see them on the road in order to extort money from them. As of late, more than half of the motorbikers, however, do not follow the order and just drive away.

“It was rare to see people daring to neglect wardens’ crackdowns not too long ago,” he said.

People have even begun to challenge security agents, using the term “human rights violations,” if they act unfairly and high-handedly, another source in the North’s South Hamkyong Province was quoted as saying.

“North Korea used to be a society that did not even know about the very term ‘human rights,'” the source added. [Yonhap]

North Koreans may be learning some of this from South Korean dramas, which often feature politics and protests as subplots. But even without foreign inspiration, nothing in recent years has motivated North Koreans’ political consciousness quite like the interference of petty despots with their hardscrabble livelihoods. For other examples, see this documentarythis incident, this massive brawl, these spontaneous protests, or any number of other incidents.

Indeed, the tendency for the trading classes to eschew politics until some (probably corrupt) thug in a uniform touches their market wares is universal — remember how the Arab Spring began? Slowly, the officials in the markets are becoming prisoners of the people. Now, imagine if after each such incident, North Koreans across the country could read about it on their smart phones the very same day.

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Prisoners of the People: N. Korea’s guerrilla society has political implications (updated)

Over the last year, I’ve become convinced that if technology can break the electronic barriers between North Korea and the Outer Earth, it would be possible to keep the broken promises of the Sunshine Policy by bypassing Pyongyang and engaging directly with the North Korean people. Governments, churches, and NGOs could harness markets, smuggling networks, and private agriculture to help North Koreans feed the hungry, heal the sick, share information and ideas, begin to rebuild their broken civil society, and eventually, negotiate with the state for what is rightly theirs. 

A new civil society independent of the state, and increasingly at odds with the state’s political objectives, would co-opt, corrupt, and supplant the state’s control over the population, particularly if the state is demoralized, corrupt, weakened by sanctions, and unable to pay its security forces. If it all seems impossible, consider two cases in which that trend is well advanced in North Korean society now — financial services and health care. 

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Reuters writes that a guerrilla banking system has sprung up inside North Korea. For the most part, Reuters describes a system in which merchants who profit from state-sanctioned trade lend money to state-owned enterprises, mostly for the state’s benefit. This amounts to crony capitalism; it’s the least interesting of the three types of financial services that emerged in North Korea over the last decade.

The second type of service is loan sharking by the well-connected against the structurally impoverished. In some cases, the desperately poor agree to pay usurious interest rates to borrow food. You can imagine how some of these stories end. A month ago, for example, the Daily NK reported that a well-liked young woman stabbed a loan shark to death for pressuring her to make payments she couldn’t afford, and “will probably be executed via other means as soon as the court proceedings come to a close, perhaps with an instrument such as a rubber baton.”

The third, and least exploitative system is the one North Korean refugees currently use to send remittances to their families back home, although that system is risky for the smugglers and the recipients, who become vulnerable to extortion by the police. It’s also expensive — the refugees pay steep commissions from their hard-earned pay to send these pittances home.

The situation that has developed clearly fills a need in the marketplace, but ethically, it’s obviously far from ideal. If the technology existed to set up secure online banking through messenger apps, it would be possible to send remittances and humanitarian aid from South to North Korea with a minimum of risk and cost, and to extend microcredit to the poor in more regulated and ethical ways.

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But the report that fascinates me the most is one I read over the weekend — Eun Jeong Soh’s paper, “The Emergence of an Informal Health-Care Sector in North Korea,” published in the Asia-Pacific Journal, and based on extensive interviews with refugees, including health care workers, from North Korea. One of the more ambitious things I’ve advocated is supplementing, and largely replacing, North Korea’s broken public health system with a guerrilla health care system for those who can’t afford the bribes and fees that are a de facto cost of North Korea’s “free” health care. Soh’s paper suggests the extent to which something like that has already begun to happen spontaneously. Like most of North Koreans’ adaptations to the failure of the state, this new system was illegal, which meant that it necessarily relied on informal networks and a high degree of mutual trust.

At first, many of these home healers were quacks and unqualified traditional healers. Over time, more retired and off-duty doctors began moonlighting for trusted patients. The services they provide have improved in quality as the state hospitals increasingly do little more than use their equipment to diagnose ailments. Today, those who can afford it prefer to use private doctors, who refer patients to back-alley pharmacists to supply medicines. So well developed are the markets’ smuggling networks today that the quality and authenticity of the medicines sold by back-alley pharmacists is now as great a concern as their availability.

Up to this point, Soh’s paper mostly adds richness of detail, anecdote, evidence, and analysis to trends North Korea watchers already knew of, or might have reasonably extrapolated to the state of affairs she describes.

But the state still hovers over all of this. How do informal networks grow despite a state that wants to stamp them out, isolate citizens from each other, and maintain its monopoly over essential services? One way is for private doctors to form protective relationships with the security forces — “she provides him with free medical assistance and he protects her from any official repercussions that her activities might incur.” But Soh’s subjects also report that the state also holds back, fearing that if it cracks down, there will be discontent and unrest. It’s a long quote, but worth reading.

In describing this informal hoarding system, she conveyed the sense of injustice she feels about what the system has become, even though, in times of personal need, she had herself acquired drugs directly from the hospital.

How is such shared moral outrage expressed and communicated to the bureaucrats charged with enforcing the regulations? Dissatisfaction can be expressed verbally as a way of confronting local officials directly. Interviewees argued that in order to survive in North Korea, one often has to take a firm line and defend one’s position logically in order to persuade officials of the merits of one’s case. While this might seem surprising given the state’s tight control over its citizens, the expression of complaints to local officials is facilitated by preexisting relationships between officials and complainants formed through family networks, neighborhood relations, friendships, a shared history as classmates, and so forth. Social relations in small regional cities in North Korea are close, shaped by cultural traditions, socialism, and communalism, and reinforced by the coping and survival strategies developed to weather times of hardship.

However, given the nature of a regime that does not accommodate dissent, the expression of dissatisfaction generally takes non-verbal forms. One term that cropped up frequently was “disaffection” (panbal). In the narratives recorded in this study, panbal refers to feelings as well as expressions of disaffection against the authorities (normally local officials charged with regulating anti-socialist activities), as well as with life in general. Although the authorities are well aware of such disaffection in the populace, Ms Hahn expressed her opinion that in reality the government lacked the power to impose its own regulations: “If the authorities regulate even those activities, there would be too much disruption” (Interview, S. Hahn, October 26, 2013). According to a former police officer, “a police officer will be unpopular if he takes unnecessary enforcement action” (Interview, M. Park, November 18, 2013). If complaints against local officials accumulate, they will damage their reputation with residents. In E. P. Thompson’s words, referring to the 18th-century English crowd, “the authorities were, in some measure, the prisoners of the people” (Thompson 1971, 88).

From the point of view of local officials, the existence of these informal coping networks and strategies are to be applauded, as alternative ways of providing health care may have the effect of allaying complaints by residents. Local officials also have private incentives to turn a blind eye to such informal activities. Normally, these private practices operate with the help of local police who accept bribes from practitioners. More importantly, police officers also draw on the services and expertise of informal health-care workers for their own families’ survival and wellbeing. As a result, local officials and residents have come to share similar views on these extra-judicial activities. Thus the convergence of preferences among providers, consumers, and regulators has contributed to the emergence of an active and evolving informal health-care sector in North Korea.

So it was that North Koreans who harbored no explicit political motives learned to resist and conspire against the state, and to defeat the prisoners’ dilemma it imposed on them.

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Update:

North Korean parents are catching “private education fever” as more and more of them are risking arrest as they venture outside the secretive state’s educational system in the hope that a private tutor will help their children get into a top university.

“The goal of these parents is to send their children overseas or to the best colleges in Pyongyang,” a North Korean who recently visited China told RFA’s Korea Service. “There have been slogans going around saying: ‘Let’s send them overseas!’ or ‘Let’s send them to Pyongyang!’”

In North Korea, where the state tightly controls education, hiring a private tutor is illegal, but more and more parents are taking the risk and paying the price

“Subjects like mathematics, physics or any other of the core studies cost 100 [Chinese] yuan (U.S. $15.00) per month in Pyongyang, whereas subjects that need specialized skills like computer programming cost between 200-500 yuan (U.S. $30-$75) per month,” said the source, who talked to RFA on condition of anonymity.

The fever doesn’t end with academics as so-called “extreme” North Korean parents, who want to raise “civilized” children, pay more so their kids can learn to play at least one instrument and take part in athletics, explained the source.

“Children of the privileged class in Pyongyang spend about 1000 yuan (U.S. $150) monthly for private education expenses,” the source said. [RFA]

To do this, the parents have to pay bribes to get their kids excused from regular school or labor mobilizations. The tutors are also at risk of arrest, so many are well-connected people who are relatively untouchable.

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A blanket trade embargo won’t help us disarm or reform North Korea

In Wednesday’s post, I wrote about Beyond Parallel’s imagery analysis pointing to a decline in cross-border trade between China and North Korea, along with the limitations of that analysis and its great potential if expanded and focused. But I also alluded to a broader policy concern about the error of equating trade volume with sanctions enforcement: that while China’s under-enforcement of sanctions has historically been the greatest impediment to our North Korea policy, sanctions over-enforcement is an equal danger. Recently, I’ve heard influential people — including recovering engagers, preaching with the zeal of converts — advocating what sounded like a total trade embargo. (To be clear, Beyond Parallel’s study did not advocate this.) This would be inhumane, misguided, and politically unsustainable. It would play right into the regime’s hands by validating its disinformation and strengthening the arguments of its apologists.

The greatest long-term danger to an effective multilateral sanctions enforcement strategy is a loss of political will by one or more key nations. Pyongyang’s overhead is lower than that of most states because it doesn’t provide for its people, so breaking even one key nation out of a multilateral coalition can allow Pyongyang to get by for a year or two while it cultivates its next divide-and-conquer ploy. In South Korea and Europe in particular, public support for strong enforcement is vulnerable to charges — almost always made of lies, half-truths, ignorance, and appeals to emotion — that sanctions harm only the ordinary people. (And in the case of, say, old-fashioned trade sanctions against Iraq, the charge was mostly true. Many people who still don’t understand financial sanctions and who don’t know they don’t understand are still stuck in this paradigm.)

To maintain political support for such a multilateral sanctions enforcement strategy long enough for that strategy to work, policymakers must answer those charges, because people who are either sympathetic to the regime or myopically focused on aiding a tiny minority of its people are certain to lodge it, and shallow thinkers in the press are certain to echo it.

Thus, policymakers need more than just a sanctions strategy. They need to understand how sanctions complement other tools within a broader policy, and how all of those tools combine to achieve a plausible outcome. And to sustain any of it, they need an information strategy for answering these predictable arguments.

First, they must keep pointing out exactly how many North Koreans Kim Jong-un could feed with what he has instead chosen to spend on nukes, missiles, weapons, yachts, palaces, ski resorts, armored limousines, flat screen TVs, and … I could go on.

Second, they must emphasize their principled insistence that sanctions must only be targeted against the income sources the regime uses to buy all of these things instead of food. They must avoid unforced errors like this one at all costs. They should move quickly to identify and correct adverse and unwanted impacts from sanctions. Both the U.N. Security Council resolutions and U.S. sanctions law have provisions and general licenses for that purpose.

Third, they should point to what Pyongyang itself is doing, for the sake of its own internal control, to inhibit private agriculture, domestic market trading, and cross-border consumer-level trade. Those activities probably keep most North Koreans alive today. What almost no one is saying — and more people should be saying — is that Pyongyang’s sanctions against its own people are causing far more harm than international sanctions against Pyongyang itself. The latest example of that is this report that His Supreme Corpulency has ordered the planting of trees on private farm plots that probably grow a substantial portion of North Koreans’ food supply.

After Kim’s declaration, the government started to enforce laws against slash-and-burn farming all over North Korea. However, this is a matter of life and death for ordinary people. Consequently, last year, as long as trees were not cut down, in return for bribe, agriculture officials looked away if a person was cultivating short crops. Since then, the writer of this article confirmed that many farmers have given up slash-and-cut agriculture, though tree replantation is yet to take hold. [….]

“They wouldn’t allow us to go near our fields in the mountains. If we planted something, they’d pull it out of the ground. I recently planted potatoes, and they pulled them out. It was growing well…….” [Rimjin-gang]

Fourth, leaders should say more about how quickly and easily Pyongyang could end its quarter-century-long, man-made food crisis with a few bold policy decisions. For one thing, it could stop exporting so much of its food production for cash. This practice has even yielded some evidence that sanctions have actually improved North Korea’s food supply, by barring the exports of mushrooms, seafood, and other delicacies for cash, and forcing trading companies to shift from sanctioned trade to non-sanctioned trade in food. (My suggestion for the next round of U.N. sanctions? A ban on food exports.) North Korea could solve its short-term hunger problem in 30 days by halting food exports, and by choosing to import more food and less swag. Sanctions would do nothing to interfere with any of that. It could end its long-term hunger problem in less than a year with land reform that redistributes land to the tillers, and by ending the confiscation of private farms.

Finally, they should quietly pressure U.N. aid agencies to reassess well-meaning but flawed aid policies that haven’t addressed North Korea’s food crisis and may be prolonging it. Aid will never help more than a tiny percentage of North Korea’s population as long as the regime continues to inhibit aid workers’ access to the hungry. What North Korea needs is fundamental land reform and a change in its government’s priorities.

A strategy for enforcing sanctions, then, must be both coordinated and calibrated to hurt the right people and not the wrong ones. China’s role is obviously critical here. No one should want China to impose a blanket trade embargo on North Korea, because a blanket trade embargo will affect commerce that fills the markets and sustains the majority of North Koreans, and this will erode the political and diplomatic unity of a sanctions enforcement coalition. In the long-term, starving the North Korean people will discredit the use of sanctions to starve the regime.

On the contrary, it would be far better to open the taps on street-level jangmadang trade and hinder only the trade that exclusively funds the regime. Over time, the effect of this would be to deny the military and security forces a steady income and force them to turn to corruption to survive. This would catalyze more smuggling and more defections. It would mean more copies of “Descendants of the Sun” on sale in the markets. The good news is that the early signs suggest that since sanctions have taken effect, corruption has increased among the internal security forces and railroad police, and that the flow of refugees into South Korea has increased, although there still isn’t enough evidence to identify a pattern in these reports or assign a cause to them.

Still, these reports suggest how cutting the regime’s funds and blocking its accounts would preferentially impact the elites and break down their cohesion to the regime, starting with its financially critical overseas workers and trade agents, and progressing to those who maintain the system of internal security. It would force the regime to launch ever more mass mobilizations and confiscatory demands for “loyalty” payments that sap Kim Jong-un’s domestic political support among the poor.

Collectively and gradually, these trends would accelerate an ongoing shift in North Korea’s internal balance of power downward in North Korea’s songbun system, from generals to donju, from border guards to smugglers, from party members to non-members, from soldiers to sotoji farmers, from police to market traders, in every village, factory, and neighborhood. Only when Pyongyang realizes this will it realize that time is not on its side. And only when Pyongyang realizes that time is against it will diplomacy stand any chance of lasting success. If it doesn’t, and consequently drowns in the tide of history, that would be far from the worst possible outcome.

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Preparations for North Korea’s party congress spur anger, resistance, and dissent

Over the last year, this site has closely tracked growing signs that North Korea’s elites are discontented with Kim Jong-un’s leadership and fearful of being purged, and of falling morale and discipline in the North Korean military. More recently, we’ve seen extraordinary outbreaks of dissent among North Korea’s overseas workers, including the group defection of 13 restaurant workers and a reported mutiny by 100 workers in Kuwait.

Whether these incidents reflect popular sentiment inside North Korea itself is a harder question to answer. Some remarkable reports of dissent and resistance have emerged from North Korea recently, but Kim Jong-un’s crackdown on the borders means that the reports take longer to emerge, and they’re more difficult to verify. But for those who are watching for them, the signs are there.

[Radio Free Asia]

The confrontation is so reminiscent of one shown in the 2014 PBS Frontline documentary, “The Secret State of North Korea,”  that I had to compare the two clips to be sure they weren’t the same. Of course, there was nothing overtly political about this incident. Similarly, a reported bank robbery in the city of Chongjin may not have been politically motivated, either, but it would represent an extraordinary act of lawlessness for North Korea. It suggests that beyond the limits of Pyongyang, North Korea could become what John Lee recently described as “a failed state.”

Other incidents have been expressly political. Radio Free Asia reports that in the northeastern city of Chongjin, some brave soul stole the North Korean flag from the flagpole in front of city hall overnight. On the night of Kim Il-sung’s birthday.

In late March, the authorities found anti-regime leaflets and graffiti in public places in Pyongsong, Hamhung, Chongjin, and even Pyongyang.

But the case that has received the most attention occurred at a train station in the town of Posong in Samsu county, Yanggang province, through which express trains to Pyongyang pass. [….]

“The authorities are trying to hunt down suspects whose handwriting matches that of the writing,” he told RFA’s Korean Service. “The leaflet was reportedly plastered right below the portrait of [former leader] Kim Il Sung on a wall.” [….]

“The leaflet found last New Year’s Day said, ‘Kim Jong Un is a son of b**** in Chinese ink,” the source said. “There were so many people from across the country mobilized at Posong station on Jan. 1st for the New Year’s Day celebrations that the news may have spread nationwide.” [Radio Free Asia]

News of the incident “spread like wildfire” at a political rally whose purpose (ironically, if predictably) was to idolize His Porcine Majesty. The Daily NK also publishes a similar report of anti-regime graffiti at Hyesan, in Ryanggang Province, criticizing the party congress. The Daily NK claims to have corroboration from multiple sources for the report. 

The locations of these incidents are too far apart to be the work of one individual, and the consistency of the reports provides a degree of mutual corroboration. Although the possibility exists that this was the coordinated work of an organization, it’s more likely that these are uncoordinated and spontaneous outbreaks of dissent across North Korea. Not for the first time, apparently:

“Last October, people across the country defaced posters glorifying North Korea’s ruling Korean Workers’ Party to show their resentment against the burdens the government imposed upon them in preparation for celebrations marking the 70th anniversary of the party’s founding, RFA reported. [Radio Free Asia]

This party congress was supposed to be an occasion for deifying His Corpulency, reinforcing loyalty to the state, and consolidating power by shifting it to a younger generation of officials who are ostensibly loyal to Kim Jong-un. Instead, something closer to the opposite appears to have happened. The younger generation tends to be more loyal to its financial interests than to the old ideology. The people have been exhausted by mass mobilizationsharangued with dull lectures, and stultified by slogans they don’t believe anymore. They’re tired of being told that everything will be fine if they just work harder and trust in Kim Jong-un. The causes of their hardships are all too clear — confiscatory “loyaltypayments, restrictions on market activities, and crackdowns on smuggling from China and remittances from South Korea. Most of North Korea’s poor depend on one or more of these things for their survival.

“We haven’t been able to sell things properly because of the mandate forcing every resident to take part in mobilization and ‘uphold the Party with loyal beads of sweat to build a strong nation’ in relation to the 70 day battle,” a source from Ryanggang Province told Daily NK on March 6. “These days, MPS [Ministry of People’s Security, or North Korea’s police force] agents are on patrol all the time to crack down on street vendors.” [Daily NK]

“[W]orkers at all state-run enterprises must now attend daily ‘loyalty meetings’ starting at 5a.m.,” which is apparently unprecedented, even for (this part of) North Korea.

“It’s really just all about the regime getting people to start working sooner,” the source asserted. “They’re using the ‘loyalty meetings’ as an excuse to get them to the factories earlier in the day. Although the ’70-day struggle’ is undoubtedly a big part of it, it is also plausible that the authorities are trying to distract everyone from the looming specter of sanctions, keeping them so busy that they don’t have time to think about it.”

While the exact rationale behind the early hour is open to question, the collective reaction it has elicited from workers is anything but. “At first you’ve got to go in [at that time] because there’s no avoiding it,” he said, conveying sentiments shared with him by factory workers.

“Show me someone who would maintain that level of devotion otherwise! Fear of punishment is the only thing keeping anyone in line–not bona fide loyalty [to the regime].” [Daily NK]

This may increase production temporarily, but soon enough, people become exhausted, and production will drop off again. Some of the work is simply make-work: “People … have been mobilized to work around the clock in construction and clean-up of the areas around twin statues and monuments to Kim Jong Il and Kim Il Sung in preparation for the Workers’ Party Congress.” Workers and students have been ordered to collect scrap iron, and some are meeting their quotas by stealing, or by looting and stripping factories. The factories, in turn, have hired ex-soldiers as private security guards, who brutally beat any looters they catch.

Those who can afford to buy their way out of the extra labor; those who can’t must work longer hours. Wage payments are unreliable, and “the people are coerced to deposit 1,000 won to banks every month during the period of the 70 days battle.” State banks reportedly charge 50% commissions for withdrawals, which means that “deposits” are effectively confiscations.

For a regime that talks so much about the loyalty of its people, Pyongyang is watching them as if it’s mortally terrified of them. It has required “all North Korean citizens near the North Korea-Chinese border to carry ID on them at all times,” and stopped citizens for random checks. It is reinvestigating the backgrounds of its citizens for signs of disloyalty and keeping a close watch on those who fall under suspicion. It is destroying homes near the border with China as a countermeasure against defections. It has restricted movement in and out of Pyongyang and stepped up surveillance in residential neighborhoods, hotels, and public places.

These mobilizations, confiscations, and restrictions are partially about money, of course, but they’re also about control. This regime knows that if it can’t keep its subjects happy, the next-best way to control them is to keep them tired and busy. North Korea’s government lacks the competence to provide such essential services as sanitation, medicine, education, irrigation, public health, roads, a fresh water system, public order, and baths; and it certainly can’t bring peace. Now, even its vaunted propaganda is failing. Its last remaining competency — the one on which its survival may depend — is ensuring that those who seethe at it are kept too tired, too busy, too afraid, and too isolated to communicate, combine, or organize against it.

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So far, sanctions are cutting off Pyongyang’s cash while sparing North Korea’s poor.

A month after the President signed the North Korea Sanctions and Policy Enhancement Act and two weeks after the U.N. Security Council approved Resolution 2270, enough information has emerged from North Korea to allow for a preliminary assessment of how the sanctions are affecting those they are meant to target, and those they are meant to spare. 

Sanctions have begun to hit their intended targets. The Daily NK reports that the donju, the well-connected traders who help finance Pyongyang’s priorities through trade with China, initially refused to believe (or plan for) the possibility that China would cooperate with sanctions or cut off the coal trade.

Donju are the fulcrum of North Korea’s coal industry, their massive dollar investments propping up foreign-currency earning enterprises tasked with production and export of a product providing North Korea with much-needed cash from a resource-strapped China.

Now, they’re panicking. Those who are “connected to the export of minerals are reeling after hearing that trucks bound for export have been stopped at the customs office in Sinuiju, North Pyongan Province.” 

“On news that coal exports have come to a halt, donju, the chief actors in the country’s coal distribution industry, have stopped investing,” a source from South Pyongan Province told Daily NK on Tuesday. “Some had been thinking of completely giving up their coal handling and storage facilities, but with the new rumors surfacing about exports resuming in a few months, they’re now mulling over whether to reinvest.  [Daily NK]

The regime is worried that “a prolonged strangle on donju investment could eventually challenge the operation of the mines themselves, and by extension stymie a robust source of funds buttressing the leadership.” This could have long-term consequences for the regime’s financial stability. To maintain the confidence of the donju and keep their money flowing, the regime is spreading rumors that the mineral export ban won’t last for long.

At first, market traders also panicked about the sanctions, fearing that they could lose access to their Chinese sources of merchandise. Some citizens also reacted angrily, according to the Daily NK, saying, ‘‘Those cadres don’t care if us normal people starve,” and, “This is what happens when the authorities pursue useless things [nuclear weapons, missiles] and go around bragging about it.”

All true, and actions by the regime may have been greater immediate causes of hardship. In the build-up to the party congress I prefer to call the Ides of May, the state has cracked down on street stalls, restricted the opening hours for markets, and mobilized people for forced labor (as always, exemptions can be had for a price). At first, some traders hoarded food, but the markets have been resilient, and food prices have stabilized:

“There had been concern we would see fewer goods in the market because of UN sanctions, but in reality, there hasn’t been much difference,” a source from North Pyongan Province told Daily NK in a telephone conversation on Sunday. [….]

Further confirming trends previously reported by Daily NK last week, an additional source in North Hamgyong Province reported yesterday that some people had stocked up food worried about sanctions from the UN, but that this hasn’t led to a violent gyration in prices. “Actually, in some regions, we’re seeing prices of certain products drop,” he noted. [Daily NK]

One of the more interesting effects of the sanctions is that in some ways, they’ve actually increased the supply of fuel and food. Prohibitions on coal exports have diverted more coal into the markets, so despite the cold weather in Korea, coal and firewood are cheap. Incredibly for a country that depends on international food aid and has a massive malnutrition problem, North Korea earns hard currency by exporting food, such as seafood and pine mushrooms. Recently, however, China has halted or sharply curtailed maritime traffic from North Korea, so state-controlled trading companies have dumped their wares on the markets, where ordinary North Koreans can buy them.  

“These days items that were previously hard to find because they were earmarked for export are suddenly emerging at the markets,” a source from North Hamgyong Province told Daily NK on Thursday. “The price haven’t gone down enough yet, so you don’t see too many people actually buying them. But you do see flocks of curious people coming out to the markets to see all the delicacies for sale.”

She added, “High-end marine goods like roe, sea urchin eggs, hairy crab, and jumbo shrimp and produce like pine nuts, bracken, and salted pine mushrooms were once considered to be strictly for export, but now they’re easy to find. The number of such products, referred to as ‘sent back goods,’ at Sunam Market and other markets around Chongjin is growing by the day.”

Additional sources in both North and South Hwanghae Provinces reported the same developments in those regions. [….]

Unlike in the past, when they had to pick out the high-end fisheries goods only to hand over to state foreign-currency earning enterprises, now they can sell the entire load to wholesale merchants.

“People are getting their hopes up, saying they might be able to eat some of the highest quality fish for a cheap price, if the UN sanctions continue to carry weight until the summer,” she explained. “They’re actually welcoming the sanctions now saying that for average people they’re bringing good fortune since the number of goods they can get their hands on are continually on the rise.” [Daily NK]

Why would Chinese ports reject these shipments? As immoral as it may be for a hungry nation to export food, neither the U.S. nor U.N. sanctions prohibit food exports (although perhaps they should). One possible explanation is the fact that North Korea’s seafood trade is controlled by none other than the Reconnaissance General Bureau, or RGB, which was just designated by the U.N. under UNSCR 2270.

The bureau owns dozens of ‘trade vessels’ that it uses for missions and also to secure capital. Along main ports near the West and East Sea, the bureau employs cargo ships like Chong Chon Gang that are tens of thousands of tons in size, or ‘trade vessels’ and ‘reefer ships’ such as Nam San 1, 2, Kum Gang San, Mu Bong 1, 2, Po Thong Gang 11, 12, Seung Ri, and Myong Song, which are 800 to 1,000 tons.

North Korea has given vessels like Po Thong Gang and Mu Bong a monopoly on king crabs, shrimp, and conch fishing. Therefore, they’re able to secure some 1,000 tons annually in marine goods and sell them to individual companies in Japan to buy the necessary reconnaissance equipment.

These bureau vessels also conceal their true origins and engage in trade as regular ships. Especially when they are subject to international sanctions and unable to make port entry, they use tactful tricks such as remaining in international waters, where Chongryon (General Association of Korean Residents in Japan, an entity holding strong ties with Pyongyang) companies will come to their aid in trade.

The reconnaissance bureau operates the ‘Birobong Trading Company’ to earn foreign currency, and under this are needlework and garment factories, as well as marine stations for fishing. Also, it uses the Unit 96 equipment supply station in Pyongyang’s Sonkyo District to buy reconnaissance supplies from overseas and then transfer them to subordinate military installations who will then distribute the equipment to each associated military corps. [Daily NK]

In related news, the Donga Ilbo reports that China has also begun to inspect air cargo to and from North Korea. We’ll see how that affects the flow of jewelry and flat-screen TVs into Pyongyang.

Meanwhile, along the border with China, the source of most of the goods sold in the markets, the Daily NK reports that “[d]espite the sanctions that have already kicked in, products from China are still flowing into North Korea.” The Economist also reports that non-sanctioned trade continues to flow freely in both directions — and spins this as a failure of the sanctions. But neither U.S. nor U.N. sanctions attempt to impose a blanket trade embargo. Their objective is to target the currency reserves and income that sustain the regime — to starve it of cash without starving the ordinary people. That is an important distinction that some reporters don’t seem to understand.

The news bears careful watching, but so far, the sanctions show signs of constricting the cash flows that fund the regime, without starving the poor and underprivileged. As Yonhap quotes me today, much could still go wrong, and it’s much too early to declare victory.* The U.S. and U.N. member states have only begun to implement the sanctions. Effective enforcement will require more investigative resources, long months of rat-catching, and sustained political will. The U.S. and its allies must avoid unforced errors that cause adverse humanitarian impacts and deny the effort the political support it will need. There will be more provocations, tests, and war scares. Those things are the inevitable costs of belatedly confronting a problem, rather than applying palliatives to its symptoms. But the signs we’ve seen since January are the signs I’d expect to see at this stage if my theory was right.

~   ~   ~

* Errata: My reference to section 302 was incorrect. It’s actually section 304. Thanks to the encyclopedic mind of Professor Lee for catching this. Also, “His Corpulency” and “His Porcine Majesty” are registered trademarks of OneFreeKorea.

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Rev. Tim Peters is feeding N. Korea’s hungry, and showing us how to re-think food aid

The Rev. Tim Peters, a man who embodies everything I admire about the word “Christian,” leads the group Helping Hands Korea, which has been helping North Koreans escape for more than a decade. Now, he’s putting into action what I call “guerrilla engagement,” reaching inside North Korea covertly and helping its oppressed and starved classes achieve material independence. He’s doing it by harnessing the private sotoji farms that operate on the edge of legality, and which may have saved North Korea from famine last year.

Rather than just spiriting a trickle of refugees to freedom abroad, he is also smuggling nutrient-rich vegetable seeds into North Korea, in a bold effort to provide food security for the 24.9 million people still trapped behind its barbed wire borders.

This campaign comes at a critical time. Due to some minor land reforms in the North, rural families now are allowed to cultivate tiny plots of land privately. A China-based refugee explained to him: “We have the land now, but we don’t have seeds.” [….]

Reverend Peters recalled of that time: “We sent the first batches into North Korea using various networks. Soon after that, another Catacombs member, Ed, mentioned that his grandfather bequeathed to him a chestnut orchard some time ago. I half-jokingly said: ‘Ed, are all those chestnuts just rotting on the ground when you’re over here in Korea?’ The next thing I knew, his family had sent a big box of seeds from America as a donation to our initiative. That is how The Seed Project began.”

Catacombs volunteers — a motley assortment of graduate students, English teachers, military personnel, and local high school students — now gather weekly at a small art gallery. Their goal is to repackage high-quality vegetable seeds with Korean planting instructions, while keeping up-to-date on the latest North Korea headlines. This winter, they have prepped over one thousand units. [Rachel Stine, The World Post]

I’m proud to call Rev. Peters, and several other participants in this program, my friends:

Despite the religious nature of Peters’ approach, Catacombs enjoys significant support from human rights activists on the secular left. At any given meeting, a third of the attendees are atheist or agnostic. Included in this demographic is regular attendant Craig Urquhart. A Canadian activist, Craig recently donated approximately 100 packets of organic, heirloom seeds designed to grow well in frosty climates.

“It’s not like we’re sending Bibles North,” he said. “We’re sending seeds – food – and a path to a better future. Sending seeds North is one way to help North Koreans who suffer repression by their government. It slightly reduces their dependence on the state dictatorship and it fosters food independence. There’s no negative to this kind of engagement.”

Kurt Achin, a Seoul-based journalist and Catholic supporter of the program, remarked: “I met Tim in 2004 when I came over here to report on defectors and human rights. I am a huge supporter of his quiet approach.”

My only complaint about this otherwise groundbreaking article is that it cites low estimates of the percentage of food-insecure North Koreans. According to recent U.N. reports, that number is somewhere between 70 and 84 percent. Admittedly, U.N. assessments should be treated with skepticism; they may well be skewed by both regime manipulation and the hoarding of food, including sotoji-grown food.

The obvious challenge for this program will be to stay covert and avoid the state’s domination. After more than two decades of humanitarian aid from the U.N. and various NGOs — aid that has long been subject to diversion and manipulation — North Korea is still in a chronic food crisis despite being an industrialized society in a temperate zone with more than enough cash to feed every last North Korean. And after all, how different is the weather in North Korea (perpetual food crisis) from that in South Korea (no food crisis)?

Without a doubt, regime-sanctioned aid must have helped many (but certainly not most) needy North Koreans, but it has not solved the larger food crisis, and may even be contributing to it. As Benjamin K. Silberstein writes, “Humanitarian aid is given with the best of intentions, but in the long run, by helping the North Korean regime avoid necessary policy choices, it may be harming rather than helping the North Korean population.” Or, as Nicholas Eberstadt wrote recently:

There is one final, and particularly bitter, piece in the puzzle: the role of foreign aid in financing and ultimately facilitating North Korea’s ruin. Mirror statistics reveal that the DPRK has never been self-supporting. To the contrary, it has relied on a perennial inflow of foreign resources to sustain itself. Since 1960, North Korea has reportedly received more than $60 billion (in today’s dollars) more merchandise from abroad than it has shipped overseas. Nearly $45 billion of that came from Beijing and Moscow—a figure we can treat as a rough approximation of total Chinese and Soviet/Russian financial support.

Why didn’t these massive transfers result in any appreciable measure of long-term economic advancement? The work of economists Craig Burnside, David Dollar and Lant Pritchett, published in the late 1990s under the aegis of the World Bank, suggests an answer: Aid can have a negative effect on growth when a recipient state has a bad business climate, because foreign subsidies allow the regime, in the short term, to escape the consequences of its misrule. In such cases, the greater the volume of aid, the bigger the harm.

Unfortunately, North Korea’s horrific economic performance was enabled in part by leaders abroad who sent billions of dollars to Pyongyang. Those resources allowed the Kim dynasty to continue policies so patently destructive that they would have been forced to cease, or at least to moderate, them absent subsidy from overseas.

International aid workers and humanitarian policy makers have always feared that foreign assistance, through cascading mishaps, might leave recipients poorer and worse off in the end. [Wall Street Journal]

If Helping Hands can keep operating below the state’s radar, it can be a small beginning for a series of far greater things. With material independence comes intellectual independence. If you want to donate to Helping Hands Korea, here’s a link.

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North Korea: Dispatches from a class struggle

When you devote so substantial a part of your life to a topic as depressing as the humanitarian situation in North Korea, you have to find your rewards where you can. One small polemic reward of watching North Korea is observing it as a laboratory for Marxist dialectics and theories of class struggle as the country’s rich grow richer, and the poor are trapped in poverty.

We begin our examination, appropriately, with the most plausible analysis of North Korea’s food situation I’ve seen in recent months, via Benjamin Katzleff Silberstein:

The FAO also asserts that there was a “drastic” reduction in food rations distributed in the lean-season months of July and August, when rations are already typically low. Individual daily rations were cut twice; first to 310 grams in early July (down from the 410 grams distributed throughout the first half of the year), and then to 250 grams in the second half of July. These lean-season figures are very low, as the FAO points out, but they have been worse in the past. (Ration sizes have presumably increased since September, when the agency made its estimates.)

It is important to remember that Public Distribution System (PDS) food rations do not represent the whole story, as most North Koreans probably rely on markets for a very significant part of their food consumption. Most survey studies indicate that the majority of food people consume comes from the markets and from other private sources, like kitchen gardens. In addition, there are likely to be disparities in food access between populations in different regions and in urban and rural areas. For example, the FAO recently estimated that the proportion of underweight children is twice as large in the countryside as it is in the cities. Vulnerable segments of the population are more dependent on the PDS, and thus more likely than the average citizen to be adversely impacted when harvests decline.

This year’s malnutrition figures are indeed dire, even though malnutrition has been improving since the late 1990s. The absolute number of undernourished people is expected to increase in the 2014-2016 period, though they would represent a slightly smaller portion of the overall population than in 2010-2012. As the FAO notes in its yearly report: “The only major exception to overall favourable progress in the region is the Democratic People’s Republic of Korea, which is burdened by continuously high levels of undernourishment and shows little prospect of addressing its problems any time soon.” However, the proportion of undernourishment appears to be going down, so the trend still seems possible even though the situation is not stable. [38 North, Benjamin Katzeff Silberstein]

To put that conclusion into some statistical context, the U.N. FAO and WFP have recently estimated that between 70 and 84 percent of North Korean people are eating near the subsistence level during the lean season. Meanwhile, North Korea continues to ask for foreign aid, but donors are contributing less and less. Pyongyang itself has also cut back on commercial grain imports from China.

The small bright spot in this picture is private agriculture, which — like South Korean agriculture — appears to have had a good harvest last year.

Silberstein’s piece is well worth reading in full, if only for his argument that “neither the extent nor the content” of the much-ballyhooed agricultural reforms in North Korea “is fully known,” and that the basis for the alleged reforms “remains anecdotal at best.” Also worth reading is this analysis by Marcus Noland, questioning how much we really know about the food situation in the North.

Now, for a look at how the other half eats:

“While Party cadres and the donju spend hundreds of dollars per meal at fancy restaurants, ordinary citizens scrape by day to day on what they can earn at the market,” she asserted.

“On Independence Road, near the gym (Pyongyang Gymnasium),” she said that the donju and the elite can be seen frequenting such upscale restaurants like “The Golden Cup,” known for its high end cuisine; another popular eatery is a nearby bistro specializing in smoked duck.  A single meal at either of these establishments starts at $50, generally running a customer far more.

“A group of four can easily consume at least $200 worth of food at one meal,” she noted.

$200 is the equivalent of 1,600,000 KPW, which, at the current market price of 5000 KPW per 1 kg of rice, can purchase approximately 320 kg worth of rice, the staple of the North Korean diet.

Although the number of Pyongyang citizens earning decent money as markets flourish appears to be on the rise, the disparity in wealth is also growing owing to the monopoly market power of the authorities. Their grip on the market allows them to enjoy a lifestyle that our source compared to “heaven on earth”, while the “rest of the people are left out in the cold.” [Daily NK]

At least some of the poor might accept this rising inequality more easily if they believed that they, too, had a chance to rise. For most, their songbun is a barrier to economic mobility.

[T]he donju (or new moneyed class) are flocking to Pyongyang before the year’s end in order to compete with one another by patronizing elite restaurants and buying extravagant gifts.

In a telephone conversation with the Daily NK on December 4th, an inside source from Pyongyang said, “In downtown Pyongyang, fancy restaurants, famous hotels, and foreign currency stores, are thronging with donju who have come from the countryside. It seems that they’ve all come here after completing their winter preparations and other end-of-year year tasks in order to spend money like there is no tomorrow.”

An additional source in the capital corroborated this news.

Moreover, he noted, “The end of November is the time when the State Planning Commission issues import/export licenses, so during this time central state agencies call those heading up local foreign-currency earning units (i.e. donju) up to Pyongyang. Under the pretense of hosting criticism sessions for foreign-currency earning or production, cadres with central state organs gather for a luxurious reception and donju present them with elaborate bribes in order to secure the licenses required to run their operations.”

“The donju gather in downtown Pyongyang at first-rate hotels such The Yang-gack Do Hotel, The Chang-gwang Hotel, and The Ansan Hotel. They spend the entire day at fancy restaurants, spending buckets of cash without a care in the world. At some of these restaurants, it is normal to spend approximately US $300- $400 on a single meal. That adds up to thousands of dollars for all the people around the table,” he explained.

According to inside sources, US $100 now trades as KPW 860,000, or 172 kg of rice in the North Korean markets. This amount could keep an ordinary person happily fed for a duration of ten months. So that means by spending $400 on a single meal, the donju are essentially spending the equivalent amount that it would take to feed a family of four for ten months. [Daily NK]

The class disparity also extends to how people heat their homes.

[B]y looking at whether residents elect to use coal or wood as their tinder, we can know a lot about their lifestyle and socio-economic class. It’s also possible to know about their work conditions. First of all, those with the means to afford it have a higher probability of selecting firewood to keep their house warm. If you calculate the price of the total amount of wood needed for the winter season, it comes out to about 5 cubic meters or 2 tons of coal. So the total cost of wood would be about 750,000 KPW (about US $90.70), and the total cost of coal would be about 660,000 KPW (about US $79.90). When I break down the prices like this, I think it becomes evident what kind of resident would buy the more expensive option.

Those who use coal are using coal pay 90,000 KPW (~ US $10.90) more than those who pay for wood. This might not sound like a big difference, but for many North Korean residents who are forced to scrimp and save, this is a significant amount. That is why our source has alerted us that, as a generality, the well-off residents tend to use firewood. [Daily NK]

Finally, the Daily NK confirms what we can only assume — that this widening class disparity is driving class resentment:

In order to take care of loyal inner circle, Kim Jong Un is building luxurious apartments and private housing in Pyongyang. However, this is causing serious resentment from those who do not stand to benefit from the exclusive provisions.

In a telephone conversation with the Daily NK on December 1st, an inside source from Pyongyang said, “Lately, people have been using the word ‘economic stratification’ more frequently. This frustration and discontent stems mainly from the high-cost construction projects occurring around Mirae (future) Scientists’ Street. The brunt of this criticism is that the regime has stopped the public food distribution system, yet continues to cater to the rich and politically connected class.”

Daily NK crosschecked this information with an additional source in the capital.

“Residents who live on the outskirts and suburbs of central Pyongyang do not receive electricity in a reliable manner. They are forced to exist in pitch black darkness. Some people are saying things like, ‘The cadres exist in a separate world from us,'” he said, adding that one residents “cursed the regime while lamenting his hard fate.”

“Cadres who are in the Central Party or work in foreign currency-earning companies show off their wealth by blowing through US $1000 in a single meal. An entire family of ordinary people could survive off that amount for a whole year. That’s why people feel animosity towards high-level cadres.” [….]

“The monthly salary for a worker in Pyongyang’s textile factory is anywhere from KPW 300,000(about US $36.00) to KPW 1,000,000(about $121.00). At companies in fringe areas, the going rate is between KPW 3,000 (US 0.36) and KPW 4,000(us 0.48). In this sort of situation, the residents are forced to go to the markets and sell in order to make a living,” he explained.

By the source’s estimation, high-level cadres such those in the Korean Workers’ Party and Ministry of People’s Armed Forces account for 10% of the population but hold most of the country’s wealth. Below them are the donju (masters of money, or new moneyed class), who occupy about 20-40%. The remaining 50% is made up of “normal folks, who really do struggle to get by and provide for their family.”

“A while ago, it was said that even though we were subsisting on corn meal soup and scraping to get by, those in Pyongyang weren’t much better off. But things have changed. Now there are residents who say they’d prefer to farm in the countryside rather than watch the cadres show off their extravagant wealth,” the source concluded. [Daily NK]

For much of the 1990s, Americans watched reports come in of the horrible famine in the North and wondered when the people would finally overthrow this obscene oligarchy. It didn’t happen, because historically, starving people have almost never overthrown governments. They are too preoccupied with survival to take on additional struggles against a repressive state. Instead, it is class inequality that has historically destabilized oligarchies. We in the Outer Earth often assume North Korea to be socialist because it pretends to be when foreigners are watching. The reality increasingly looks like the economic totalitarianism of Stalin-era socialism, combined with the inequality of gilded-age capitalism.

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Inter-Korean phone calls can keep the promises of the Sunshine Policy

Twenty years of state-to-state engagement between North and South Korea have not lived up to Kim Dae-Jung’s promises. Pyongyang has taken Seoul’s money, nuked up, and periodically attacked South Korea for good measure. Rather than reforming, it has invested heavily in sealing its borders. Pyongyang sustains itself on foreign hard currency, even as it cuts off the flow of people, goods, and information to its underprivileged classes. It knows that if it fails to do this, members of those classes will achieve financial, material, and ideological independence from the state.

In their efforts to seal the borders, the North Korean security forces’ principal targets have been the Chinese cell phones whose signals can cross a few miles into North Korea, and which provide North Koreans with their last fragile link to the outside world. Today, there is a real danger that this link will be cut, and that the market-driven changes in North Korean society — changes driven by the people, despite the government’s attempts to suppress them — will cease.

Now, imagine if signals from South Korean cell providers began spreading across the DMZ into North Korea, with steadily expanding ranges. You saw how Pyongyang reacted to loudspeaker propaganda, which reached a few thousand conscripts at best. Imagine the subversive potential of North Koreans being able to call their relatives in the South directly, reading the Daily NK on smart phones, sending photographs or video of local disturbances to Wall Street Journal reporters, or downloading religious pamphlets from South Korean megachurches. Small beginnings like these could be profoundly transformational. If, eventually, North Koreans gain the ability to talk to each other, free of the state’s interference, these beginnings could become the foundations of a new civil society in North Korea. That could vastly mitigate the chaos and cost of reunification.

And yet, Seoul hesitates to allow this kind of people-to-people engagement, ostensibly because it is paralyzed by paranoia that North Korean spies would also use this network.

South Korean police expressed concerns over the national security implications of mobile phone conversations between North Korean defectors in the South and their relatives in the North.

A police official who spoke to South Korean press on the condition of anonymity said the security concerns call for the passage of a law at the National Assembly that could step up surveillance, South Korean outlet Financial News reported on Friday.

Many North Korean defectors who have resettled in the South keep in contact with their families, who are able to circumvent North Korea regulations through the use of Chinese mobile phones. One unidentified woman defector said she calls her family in the North 3 or 4 times a week, to confirm money transfers through a broker based in China. [….]

Police officials in Seoul are saying the conversations between family members can leak sensitive information that can pose a threat to South Korea’s national security, but amendments to Seoul’s Protection of Communications Secrets Act could reduce risks. [UPI]

But given the frequency with which North Korean agents are exposed in the South — just keep scrolling — the Reconnaissance General Bureau, the United Front Department, and their assortment of spies, street thugs, slashers, hackersassassinsagents of influence, and fifth columnists in the South seem to be the only North Koreans who aren’t having trouble with “inter-Korean engagement.”

It’s a silly, short-sighted paranoia that’s tantamount to refusing to treat a disease for fear of the treatment’s side effects. The answer to spies using the phones is called law enforcement. More broadly, if Seoul doesn’t want to deal with North Korean espionage and influence operations in perpetuity, it should open a second front in Kim Jong-Un’s information war, and start running a few information operations of its own. 

One of the most important uses of inter-Korean phone links could be their use for money transfers. Plenty of families in the North rely on those remittances to survive, or to start small businesses that provide for their families. Seoul has been ambivalent about these remittances, too:

South Korea technically bans the transfers, but an official at Seoul’s Ministry of Unification, which handles North Korea policy, says that the government has little incentive to stop the remittances.

“They fall into a gray area,” said the official, requesting anonymity because he was unauthorized to speak about the policy on record. “We always say no money should be sent to North Korea in case it is diverted for military purposes. But in this case, we’re not talking about huge amounts. And it’s for humanitarian purposes. So long as that’s the case, we won’t pursue it.” [WaPo, Chico Harlan, Feb. 2012]

Seoul has even fretted that small-time remittances from North Korean refugees to their families back home might violate international sanctions. Which is an argument that takes a lot of chutzpah, if you contemplate the millions of dollars Seoul pours into Pyongyang through the Kaesong Industrial Park each year.

South-to-North remittances have always been risky and expensive. Remitters charge commissions as high as 30%. Today, with Kim Jong-Un’s information crackdown on illegal calls over the Chinese border, money transfers often require North Korean family members and remitters to risk their lives:

In May this year, a North Korean defector in her 40s took a call from an unknown number at her office in the South Korean capital Seoul.

It was from her brother, who she had not seen for more than a decade, calling illegally from North Korea after tracking her down.

He was speaking from a remote mountainside near the border with China, and was in dire need of money to help treat another sister’s late stage cancer, she said.

Accompanied by a Chinese broker, the brother had spent five hours climbing up the mountain, avoiding North Korean security and desperately searching for a signal on a Chinese mobile telephone. Contact with anyone in the South is punishable by death in North Korea, one of the world’s most isolated states. [Reuters, Ju-Min Park, July 2012]

Defectors objected strongly to a 2011 proposal by Seoul to require licenses for South-to-North remittances. Personally, I’m not sure that a licensing procedure is such a bad idea, if it’s administered efficiently. Licensing can help prevent South Koreans from sending money to government officials — and maybe even spy-handlers — while channeling legitimate remittances through the more honest and reliable remitters.

To ease the burden of the new red tape, Seoul might consider a new way to reduce the cost of a remittance, say, by allowing direct South-to-North transfers that don’t have to run through Chinese banks or Chinese cell phones:

Consortiums led by information technology service giants Kakao Corp. and KT Corp. won a preliminary license to launch South Korea’s first Internet-only bank Sunday, the financial regulator said, opening the new business market in the long-slumping banking industry. [Yonhap]

The online bank will start operation by next June, and will team up with KakaoTalk, which is already gaining popularity with North Koreans because of its anonymity and functionality with weak signals. North Koreans already use Kakao to arrange money transfers from South Korean banks to clandestine North Korean hawaladars.

The FSC said Kakao Bank has an innovative business plan with broader customer lists based on KakaoTalk, which has more than 34 million members.

Kakao is already running mobile payment tools such as KakaoPay and BankWalletKakao.

K-Bank is initiated by KT, the largest fixed-wire operator. Its partners involve No. 1 bank Woori Bank, leading IT solution provider Nautilus Hyosung Inc., GS Retail Co. and Hyundai Securities Co. [Yonhap]

For the last 20 years, South has poured $7 billion in no-questions-asked aid and favorable trade arrangements into Pyongyang’s coffers, blithely unaware of how Pyongyang was spending that money. As far as Seoul knows, Pyongyang used some of that money to nuke up. Yet in the name of “engagement” with Kim Jong-Il, Seoul took bold risks to draw North Korea into the global economy and gradually induce it to disarm and reform. It didn’t work, but the money still flows.

Today, however, Seoul is afraid to take a chance on the kind of people-to-people communications that are changing North Korea profoundly. If those communications become regular and safe, suddenly, they start to sound like the first steps in a plausible plan to keep the Sunshine Policy’s gauzy promises about engagement, change, reform, and reunification.

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Seoul & Pyongyang join forces to fund N. Korea’s rich, starve its poor

Our endlessly unrequited vigil for North Korean reform continues:

Hyeonseo Lee is also increasingly worried about her personal security since the July publication of the best-selling memoir about her escape from North Korea, “The Girl with Seven Names”.

Defectors living in South Korea contact relatives in the North through Chinese mobile phones that are smuggled across the border. They communicate through transmission towers on the Chinese side of the border.

It’s all arranged through brokers on the Chinese side, who also help smuggle money from the defectors to their relatives.

North Korea, however, has been cracking down on this lifeline, using phone signal detectors and interference devices, Lee said in an interview on the sidelines of the Ubud Writers and Readers festival. The signals can reveal the location of the speaker if the conversation lasts much longer than a minute.

Lee arranged for many of her family members to join her in exile after her own escape in 1998, but she still talks to an aunt there.

“Right now the signal is not so good. I can’t hear their voice clearly … And my aunt says after a minute, oh my god, we have to turn off the phone now we’re being monitored.”

The aunt was sent to a labour camp for a few months last year, accused of trying to escape. “She was reported by her best friend. That’s how this regime works,” Lee said. [Reuters, Bill Tarrant]

More about Lee here. This is exactly the kind of behavior a rational person should expect from North Korea. What’s inexplicable is that South Korea — which sends cash to Kim Jong-Un through Kaesong — also prevents North Korean refugees from remitting money back to their relatives.

Sending money across the border – or private communications of any kind with the North – is also illegal in South Korea.

The money from defectors goes into North Korea’s increasingly established rural markets, which sprouted up during the famine years when the state food distribution system broke down. The markets are thriving hot spots of commerce, where people can buy or barter for things, including smuggled Hollywood and South Korean movies.

Despite the occasional crackdown, the government has been unable to shut down the markets and now basically tolerates them, Lee said, despite the fact they have become the thin edge of the wedge for Western influences.

That is to say, Seoul continues to push direct economic engagement with Pyongyang years after the failure of that policy became objectively undeniable, and despite legitimate concerns about how Pyongyang is using that money, yet shuts down forms of economic engagement that could be feeding the hungry, catalyzing the growth of a market economy, subverting the state’s propaganda, and loosening the dependence of the people on the regime.

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The more North Korea trades, the more it reforms, right? Wrong.

Yesterday, I questioned the premises of economic engagement with Pyongyang — that Pyongyang is socialist, that trade is capitalism, that capitalism inexorably erodes socialism, and that capitalism (least of all, state capitalism) is inherently liberal and peaceful. I argued that Pyongyang adopted state capitalism decades ago, and that it has grown steadily more menacing and repressive ever since. It feigns socialism to feed our false hopes of reform and arguments against sanctions, to tempt investors, to recruit apologists who embrace its socialist pretenses, and to justify the economic totalitarianism it uses to starve and isolate the vast majority of its subjects. Pyongyang doesn’t practice socialism; it imposes it on the underclasses. The underclasses are the only ones who can change that.

Sincere advocates of changing North Korea by engaging Pyongyang may accept that their best intentions didn’t work, yet still not lose heart. If they’re willing to rethink engagement in terms of engaging the people rather than the state, they’ll find more reason than ever to believe that change is in sight. For example, it now seems likely that within the next five years, anyone, anywhere in the world, will be able to access the internet. The signal might come from Google’s Project Loon, or Facebook’s Internet.org, or maybe some combination of both. Universal internet access will shatter Korea’s virtual DMZ; eventually, it can break the physical one, too. The day is coming when North Koreans will be able to attend South Korean classes, sermons, movies, clinics, lectures, and family reunions. There can be a revolution in the people-to-people engagement that the Sunshine Policy promised, but couldn’t deliver, if South Koreans have the vision and the courage to weave a virtual Ho Chi Minh Trail of clandestine communication from South to North. North and South Koreans can use this network to rebuild the North’s civil institutions from the ground up, to establish shadow governments, to build the capacity to resist the state’s most repressive policies, and to begin the process of reconstruction.

Today, however, the South Korean government remains too timid to broadcast to its northern countrymen on AM radio. My friend (and now, National Assemblyman) Ha Tae Kyung, interviewed by the Daily NK, calls for Seoul to make broadcasting a part of its unification policy, which at present desperately lacks a Phase 2. Ha wonders how the Blue House and the Unifiction Ministry can be serious about reunification when they haven’t called for radio broadcasts to the North, broadcasts that could play an important part in the cultural and social reunification.

Of course, Pyongyang will try to enforce the poverty and isolation of its subjects as if its survival depends on it. Just as it cracked down on its northern border, tracks down and arrests the users of Chinese cell phones, and sends distributors of foreign media to the gulag, it will try to arrest, imprison, terrorize, or kill anyone who listens to South-to-North broadcasts, or who makes inter-Korean phone calls. Yet the right policies on our part can give the people a fighting chance.

This picture taken on April 6, 2013 shows a Chinese border guard standing on a look out post by the bridge that crosses the Yalu river to the North Korean town of Sinuiju across from the city of Dandong. The US is pressuring China's new President Xi Jinping to crack down on the regime in North Korea or face an increased US military presence in the region, The New York Times reported late April 5, 2013. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP/Getty Images)

[STR/AFP/Getty Images, via WaPo]

Isolating a country costs money, and with the decline in the Chinese economy, Pyongyang may be having more difficulty finding that money. The Wall Street Journal‘s Alastair Gale cites Chinese trade data showing that “[t]he value of North Korean exports to China … fell 9.8% through August from the year-earlier period … accelerating from a 2.4% decline last year.” Meanwhile, another report confirms what I’ve long suspected — that the security forces are funding themselves through some of this trade:

North Korea’s feared State Security Department (SSD) has established a new “trade organization” tasked with earning foreign currency from China, according to sources who say the branch will likely use its broad powers to tap into channels used by the impoverished nation’s subsistence smugglers.

The SSD, also known as the Ministry of State Security, set up the organization “very recently” with its headquarters in the capital Pyongyang and several satellite offices in “local areas” of North Korea, a source from North Hamgyong province, along the border with China, told RFA’s Korean Service.

“While the whole nation is aware of the shortage of foreign currency in North Korea, it seems strange to establish a new trade organization under the SSD, which traditionally monitors the population’s activities to ensure they do not contravene the rules of the regime,” said the source, who spoke to RFA on condition of anonymity, after recently visiting China.

In addition to keeping an eye on the political actions of the public in North Korea, the SSD’s secret police force keeps tabs on North Koreans who travel to and from China, as well as telephone communications in border areas.

Sources said the move will likely have implications for North Koreans who subsist on Chinese currency they earn by running smuggling operations over the border. [….]

A source based in China who maintains a close relationship with North Koreans earning foreign currency there told RFA that a “large number of people belonging to the SSD” had been dispatched across the border since spring to “monitor and control the activities of North Korean residents” in the country.

“Since they are ostensibly working for foreign currency, they are called ‘trade representatives,’ just like others [who have been sent to earn cash for the regime],” said the source, who also declined to provide his name. [Radio Free Asia]

The regime’s use of trade to finance this crackdown sets up a zero-sum competition between state capitalism and free-market capitalism, the kind that has genuine potential to transform North Korean society. The SSD’s profiteering is neither a quiet capitalist revolution nor a sign of reform that is washing away the foundations of socialism. It pays for the enforcement of isolationism, and makes North Korea more unequal, oligarchical, and totalitarian (read: fascist). This may also be true of Pyongyang’s other trade relations, too, but we can only guess, because its finances are so opaque that not even the Treasury Department knows how it uses the proceeds.

In addition to broadcasting and people-to-people engagement, then, sanctions targeting the SSD’s assets are an important part of a policy to protect North Koreans from censorship and help them liberalize their society. By starving the security forces of cash, anti-censorship sanctions would deny the SSD the means to equip and pay its officers. They would foster the corruption that facilitates smuggling, and preferentially support engagement through independent free markets. The use of sanctions to fight censorship and support freedom of expression is nothing new. Treasury has anti-censorship sanctions against Iran to “facilitate communications by the Iranian people.” Why not North Korea?

Ha is dismissive of sanctions, perhaps because he lumps all kinds of sanctions together, and (like most people) doesn’t know the significant gaps in their enforcement. It’s a common myth that sanctions against Pyongyang are still strong, although I’ve previously debunked this myth in detail. Ha argues that the trade sanctions Seoul imposed on Pyongyang in 2010, after the attack on the ROKS Cheonan, haven’t made Pyongyang apologize or come to the negotiating table. He concludes that “economic sanctions don’t have effects, but broadcasts do.”

Respectfully, I think Assemblyman Ha is missing a few key points, including the role sanctions can play in protecting his North Korean listeners. First, the lifting of these trade sanctions has been at the top of Pyongyang’s list of demands since 2010. If it can be argued that loudspeaker propaganda was effective because Pyongyang sounded desperate to switch it off, the same can be argued of the bilateral trade sanctions.

Second, by lumping all “sanctions” together, Ha overlooks what is beyond serious dispute — that financial sanctions hit Pyongyang where it hurt most:

Practically overnight, banks throughout the region, even in China, began turning away or throwing out North Korean government business. By this one simple act, Mr. Zarate writes, “the United States set powerful shock waves into motion across the banking world, isolating Pyongyang from the international financial system to an unprecedented degree.” [….]

Then, Mr. Zarate writes, a North Korean representative contacted the United States, seeking relief from the 311. At the State Department’s insistence, negotiations began in Beijing, and appeared to end when a Chinese bank volunteered to handle a measly $25 million of North Korean money the authorities in Macau had frozen.

Mr. Zarate writes that “the amount of money wasn’t the issue” and that the North Koreans “wanted the frozen assets returned so as to remove the scarlet letter from their reputation.”

Then, he says, something amazing happened. Despite its government’s support of North Korea, the Chinese central bank refused to approve this solution, indicating that it, too, wanted nothing to do with a bank hit by a 311. “Perhaps the most important lesson was that the Chinese could in fact be moved to follow the U.S. Treasury’s lead and act against their own stated foreign policy and political interests,” he writes. “The predominance of American market dominance had leapfrogged traditional notions of financial sanctions.” [N.Y. Times Review, “Treasury’s War,” by Juan Zarate]

Third, the May 24, 2010 sanctions are narrow sanctions with narrow purposes — they exclude Kaesong, after all. Ha has a vision for reunification and has articulated it; Park Geun-Hye doesn’t and hasn’t. Still, even Park’s limited goals can be valid ones. Trade sanctions deter Pyongyang by imposing a (small) price for murdering South Koreans with premeditation and malice aforethought. They’re also consistent with U.N. Security Council resolutions, which prohibit member states from providing “public financial support for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade) where such financial support could contribute to the DPRK’s nuclear or ballistic missile programmes.” South Korea voted for those sanctions when it was a member of the Security Council. The other members of the Security Council approved them, in large part for South Korea’s own protection. Seoul can’t very well ignore them now.

We now have evidence that regime-controlled trade funds the oppression that isolates North Koreans, retards change, and helps Pyongyang repress the people who would listen to the broadcasts Ha supports. If the world wants North Korea to change, it has to give free markets — North Korea’s only independent institutions, on which most North Koreans depend for their survival — a fighting chance to survive. As long as Pyongyang’s oligarchy has unrestricted access to our financial system, it will use it to isolate and repress its people. We should seek to shift North Korea’s internal balance of power away from the ones with the guns and food toward those without. That means giving North Korea’s people information and access to markets. That, in turn, means blocking the funds that pay for Pyongyang’s policy of isolation and oppression.

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In North Korea, prostitution used to be a survival strategy. Now, it’s just another racket.

The Great Famine of the 1990s changed North Korean society so profoundly that we are still trying to understand the breadth and depth of that change. During and after the famine, millions of North Koreans grasped at any survival strategy necessary to feed themselves. Those who did not change, and whom the state did not feed, died. For thousands of North Korean women, prostitution was the survival strategy of last resort to feed themselves, and often, their children.

In Kim Il Sung’s North Korea, the sex trade was invisible to the outside world. That began to change when Chinese traffickers and johns forced thousands of female famine refugees into the sex trade. By the end of the great famine, prostitution had become stealthily ubiquitous inside North Korea. It also became more organized and more predatory, with state officials playing a growing role its patronage and protection.

In Hamheung in 2008, a number of high-ranking party officials were accused of patronizing a tea house that also sold sex, and for protecting it against police interference. In Hyesan in 2009, the manager of a state-run inn frequently patronized by central party officials was arrested for pimping women and girls, some in their mid-teens. North Korea’s 2009 currency “reform” drove more women into the sex trade. By 2010, prostitution in Chongjin had been organized by “couple managers” who matched customers, often soldiers, with sex workers, often female university students, and sometimes women who had become dependent on drugs. Last year, the manager of a North Korean factory in China was accused of pimping out female factory workers.

The reports do not suggest that the state has consciously chosen to tolerate or profit from the sex trade as a matter of policy. The security forces periodically crack down on the sex trade, but inevitably, when corrupt authorities attempt to police a profitable trade, the authorities begin to see that trade as just another way to supplement their pay. More fundamentally, in a society where officials are the law, where enforcement is arbitrary, and where the state profits from trade at least indirectly, it can be hard to tell the difference between corruption and state policy. Today, the Daily NK reports that prostitution is increasingly run by well-connected businessmen and protected by the officials they’re connected with:

The sex industry in North Korea is becoming more systematic in large cities, as the number of pimps who lure in young workers is on the rise, and Ministry of People’s Security [MPS] officials who are tasked with cracking down on sex work are looking the other way, leaving the door open for prostitution around the clock, Daily NK has learned.

This is the first report I’ve seen of organized prostitution in the capital.

“In Pyongyang and other major cities, more professional prostitution rings that use young women to make money are surfacing,” a source in South Hamkyung Province told Daily NK on Wednesday. “People who run these operations bribe everyone from MPS agents to night patrol members under the same unit so they can do business.”

As is the case in South Korea, prostitution in North Korea tends to congregate in neighborhoods near train stations.

“In areas like Hamheung, Chongjin, and other large cities, if you go to train stations and areas around the marketplace, you’ll easily see older women approaching men and asking if they’d like ‘temporary lodging,'” he said. “They usually go up to well-dressed officials who seem to be on business trips or military officials, telling them they have full amenities (code for room and board and women of all ages).”

Although the price differs by region, mostly for women in their early teens and 20s, it costs roughly 40,000 to 50,000 KPW [5-6 USD], while for those in their 30s, it’s about 20,000 to 30,000 KPW [2.5-3.7 USD] The women who direct customers to the facility typically get a 30 percent cut, while the homeowner and sex worker split up the remaining sum. The latter two will for the most part make at least 10,000 KPW [1.2 USD] per case, according to the source.

“These days since sex businesses receive protection from crackdown agents, the industry has been growing, leading to squabbles over customers,” the source said. “With more operations up and running, there are even allotted schedules. During the day, all businesses run together, while at night, the hours are divided into early and late operations.

Yet again, the reports suggest that regime officials both patronize and protect the sex trade:

Party cadres and officials in the judicial system are frequent clients of sex services, and many venture out to places like Pyongyang’s Munsuwon and high-end public bathhouses such as ‘Eundeokwon’ with prostitutes, said the source. In the North, there are baths designated specifically for married couples and can only be used after national IDs are verified.

Some officials also use the sex trade to entrap and extort johns.

Also profiting from the business are safety officials, who not only receive bribes for turning a blind eye, they sometimes use pretty women to draw customers into the ‘temporary lodging’ facility and catch them in the act, he asserted. Then, they blackmail the clients for large sums of money or in some cases, call up for regular bribes. If customers do not comply, the officials report them and use it as an opportunity to add more ‘points’ and get a leg up at work.

North Korean society’s acceptance of prostitution will probably remain until long after unification; after all, prostitution still carries on more-or-less openly in South Korea, under terms that can also be very exploitative. Different societies take different views on whether the sex trade, at least between consenting and unmarried adults, is inherently evil, but the conditions in which North Korean women must sell their bodies is unquestionably evil. Their working conditions are horrible — for the obvious reasons, of course, but also for the general lack of health care available to those who became pregnant, or contract STDs. Some turn to addictive drugs, in the false hope that they can protect them from contracting disease.

The role of state officials in organizing and profiting from the sex trade is repellant, but still not as repellant as the state’s role in creating the conditions that force women into prostitution to begin with. Women who ought to be doctors should not be sex workers. Of North Korea’s many tragedies, there may be none greater than all the human potential destroyed by its unjust and unequal political system.

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Must read: Jieun Baek on how North Koreans beat the border blockade

Admittedly, Baek’s explanation of the North Korea’s guerrilla banking system isn’t the first I’ve read, it’s only the best:

The next time Kevin talks to his mother, she asks him for $1,000. She gives Kevin a phone number. When he hangs up after about a minute, Kevin then calls that number and tells the stranger on the line that he got a call from someone (he uses a pseudonym to protect his mother’s identity). Every time, the phone number is different.

The stranger on the other line is usually a girl, a Joseonjok girl. The woman gives Kevin a South Korean bank account number, to which Joseph wires $1,000. He then sends the woman a text message using Kakao Talk (a Korean smartphone application that’s similar to Whatsapp), texting that he sent the $1,000. After receiving the message, the Joseonjok lady sends a message to another Joseonjok living in North Korea. This person will then notify Kevin’s family via their legal domestic cell phones that the money has arrived so that Kevin’s mother can go to that individual’s location, or the underground financial house, to pick up her $700 in Chinese RMB. The two middlemen take 30 percent of the requested money and split the commission. The whole transaction, part of the small underground financing system inside the country, can take place in as little as 20 minutes. [Jieun Baek, Politico]

It sounds very much like the hawala systems that initially caused the Treasury Department so much trouble after 9/11, until Congress tightened requirements that they be licensed and regulated. With a few upgrades, this could be the guerrilla financial system I’d advocated for here.

Baek also writes that refugees in the South can send medicine to their sick relatives in the North via smugglers. That has helped to ease the suffering caused by the collapse of North Korea’s state-run health care system, but there are risks that come with this, too. As Rimjin-gang recently informed us, some North Koreans who take smuggled medicines — often, medicines stolen from U.N. aid supplies — without a doctor’s advice are getting sick. If some way could be found to open the lines of communication wider, doctors in South Korea could volunteer to treat North Korean patients remotely, practicing what’s now called telemedicine.

Jieun Baek is writing some of the most thought-provoking work on how to “engage” with the North Korean people I’ve yet read. I’ve added her to my blogroll, and must keep a closer eye on what she writes.

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Daily NK: Massive brawl in Musan market after traders resist confiscations

This may be the most significant known incident of anti-regime resistance by North Korean civilians since the Ajumma Rebellion that followed the 2009 currency confiscation:

A massive brawl between Ministry of People’s Security [MPS] agents and vendors at a marketplace in Musan County last Friday has led to an urgent dispatch of county security and safety agents along with the complete shuttering of the market. The clash occurred after angry vendors tried to resist the confiscation of their goods by market surveillance authorities, Daily NK has learned.

“When the agents who manage the market took away manufactured goods from the vendors, they got upset and started arguing with the agents. Soon other merchants and officials nearby joined in and it ended up turning into a free-for-all between the two groups,” a source in North Hamkyung Province told Daily NK on Sunday.

This incident was corroborated by an additional source in the same province.

“An altercation that started with cursing and fistfights turned into mayhem as crowds watching got agitated and joined in with weapons, resulting in many casualties,” he said, noting that armed agents with the State Security Department [SSD] and the MPS from the country were dispatched and after shutting down the market they hauled off everyone everyone involved, including the injured and deceased.

The confrontation occurred unexpectedly and the site was immediately sealed off, making it hard to estimate exactly how many were involved. However, the source said dozens are thought to have been injured on either side.

A witness at the scene described the market as being “jam packed” and thick with an atmosphere of intimidation hanging over what really amounted to a “riot,” he said. [Daily NK]

According to the report, the city has been isolated and the local market is closed, causing much hardship for the people. Discontent was already high because of the drought and the failed potato harvest.

The report follows the regime’s recent decision to ban market activities by men under 60. It will be interesting to watch, over the next few weeks, whether this incident suggests that a wider crackdown against the markets is underway, or whether this merely represents theft by uniformed shake-down artists. As I wrote here recently, there is a long-standing pattern in North Korea of the regime relaxing controls on markets for a few months, or years, only to crack down later.

Over the last few months, the regime had relaxed market controls significantly while focusing its attention on sealing the border and purging the military. But as we also learned in late 2009, the market is the only institution in North Korea that isn’t under Pyongyang’s absolute control. As such, it’s the only institution capable of resisting the state with any measure of success.

Notably, residents have not raised questions as to why such an incident would have occurred, with many suggesting something larger needs to happen. Most agree authorities brought the incident upon themselves by cracking down on people during such difficult times, the source reported.

Although few foreign observers have bothered to compile the history of popular resistance to the North Korean regime—reports that are largely impossible to verify—that reported history turns out to be rather extensive. Recently, most of that resistance has actually come from inside the military, from soldiers who fragged officers and fellow soldiers over hazing and abuse. So why has all of that resistance failed to change the system? It’s likely that the state’s fear of resistance has probably stayed its hand in many ways we can’t know, and has gradually pushed back the state’s economic control.

This incident, however, like others that preceded it (see here, here, here, here, here, here, and here), won’t threaten the state’s control, because North Koreans have such a limited capacity for intra-national communication and organization, and for international information operations to report, photograph, and film incidents like these and attract global media interest. As a result, this protest has probably already been isolated and contained. Like nearly all of the anti-regime incidents linked in this post, it was about personal grievances, mostly economic ones. But as the Arab Spring taught us, isolated, personal, and economic grievances have a way of re-contextualizing into broader movements with broader political objectives.

If the walls within the vast ice cube tray that is North Korean society were to break down, a strong wind could build a ripple on one side of the tray into a great wave on the other. Until those walls break down, that wave will not come.

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Guerrilla Engagement: A strategy for regime replacement and reconstruction in N. Korea (Pts. 1-5)

~   1   ~

One day, either this President or the next one will awaken to the realization that the regime in Pyongyang is collapsing, and that he has just inherited the costliest, messiest, and riskiest nation-building project since the Marshall Plan. The collapse of North Korea will present South Korea — and by extension, its principal treaty ally, the United States — with a nation-building challenge unlike any in recent history. After all, Iraq, Afghanistan, and Syria all had some independent institutions — tribes, sects, mosques, and churches — that predated and outlived the old order. None of these things exist in North Korea. A collapse of the regime will reduce the entire society from the closest thing on Earth to Panopticon totalitarianism to complete anarchy.

North Korea’s extraordinary secrecy means this will be harder to predict than the collapses of ostensibly “stable” regimes in Libya and Syria, but Kim Jong Un’s rule so far suggests an ineptitude at two survival skills — the proper cultivation of a personality cult, and the maintenance of good relations with the military. Pyongyang’s ongoing purges may or may not be signs of instability, but they suggest the existence of fear and distrust between Kim Jong Un and the military. Another destabilizing trend is North Korea’s obscene and widening gap between rich and poor.

These things might not have mattered in the 1990s, but today, technology is allowing more of North Korea’s have-nots to see how the elites live. Of course, inequality isn’t new to North Korea, but the new inequality is a more destabilizing kind. Contrary to the misjudgment of generations of American policymakers, North Korea’s hunger is not destabilizing, but an effective tool for weakening, exhausting, and controlling the oppressed. Today, North Korea’s poor are still very poor, but there is no wide-scale famine. Meanwhile, the elites have grown obscenely rich. It is inequality, not poverty, that topples tyrants. And ever since the coronation of Kim Jong Un, a porcine portrait of inequality has glared down on every North Korean citizen in every home, office, and classroom.

In his inaugural address in 2009, President Obama offered an open hand to Kim Jong Il, if he would unclench his fist. Within five months, Kim Jong Il answered with a nuclear test, and Kim Jong Un has repeatedly reaffirmed his insistence on pursuing a nuclear arsenal.

Recently, the Obama Administration has been hinting at both talks with and sanctions against Pyongyang, but the reality is that the North Korea policy debate has already entered the post-Obama era. It’s a very different debate from the one we had seven years ago. In 2008, most Korea watchers still believed that “engagement” with Pyongyang would catalyze political reforms, but Kim Jong Un’s bloody purges, and his harsh crackdowns on refugees and information, have discredited this theory. Korea watchers still hope for a peaceful opening of North Korea, but if you ask them directly, very few of them really believe in one in the foreseeable future. In 2008, most Korea watchers still hoped that diplomacy might end North Korea’s nuclear and ballistic missile programs. To the extent this hope survived the collapse of President Bush’s Agreed Framework of 2007, it faded away with the collapse of President Obama’s Leap Day Agreement of 2012, a less ambitious freeze agreement. A few Korea watchers still cling to the idea of a freeze agreement, but I can’t name a single Korea-watcher of consequence who still believes in a negotiated disarmament of North Korea today.

Today, many Korea-watchers are resigned to an unreformed, nuclear North Korea. Most are weary, disillusioned, uncertain, and at a loss. More of them know what we shouldn’t do than what we should do. There are important exceptions. Former CIA analyst Sue Mi Terry, writing in Foreign Affairs, advocates the overthrow of the regime by seeking a diplomatic consensus with China and other neighbors to cut off Pyongyang’s financial support. In a war-weary, post-Iraq Washington, this might have been a fringe view, but in the age of ISIS, Terry is joined in it, somewhat conditionally, by Richard Haass and Winston Lord, influential moderates who are usually associated with the “realist” school of foreign policy that places a high premium on stability. Leaving aside whether China would agree to this for the present, there are good counter-arguments to seeking regime collapse. One need only read Bruce Bennett’s description of the cost, chaos, and conflict a sudden collapse of North Korea’s sole social and political institution could bring to understand them. (Terry also acknowledges them.) But as much as Americans hate the cost of nation-building, they must understand that the alternative can be much costlier. Try to calculate the cost of anarchy Afghanistan in 1989, or Syria and Libya in 2011.

In the long term, Terry (and Park Geun Hye) are almost certainly correct that North Korea’s untapped human and material potential would make a unified Korea a wealthy, powerful, and prosperous nation. In the short term, however, a post-collapse North Korea will be a money pit. It will be a source of social unrest, illicit drugs, crime, corruption, disease, and potentially, conflict. Its infrastructure, civil society, and public health would take years, if not decades, to rebuild to first-world standards, and all of them will continue to decay as long as the regime can suppress the coalescence of alternative political, social, and economic institutions. With each year that this decay progresses, the cost of repairing it will continue to rise. Even with the best planning and preparation, it will be one of the greatest security crises of our age. And it will happen regardless of whether we want it to or not.

Even so, this is still a far better outcome than one in which North Korea, Iran, Syria, and other end-users of North Korea’s WMD technology acquire the means to destroy U.S., South Korea, Japanese, and other allied cities. As Korea watchers will tell you, all of the good options vanished long ago.

~   2   ~

In moments of exasperation, proponents of regime-focused engagement sometimes ask their critics how they would beneficially transform North Korean society. It’s a fair question. The critics are fond of pointing out that South Korea spent nearly a decade and billions of dollars trying to transform North Korea through the Sunshine Policy, yet the results speak for themselves. As one of these critics, I’ve long challenged proponents of Sunshine-like policies to point to any significant positive changes their policies have achieved, but no one has ever taken me up on this.

The question isn’t really whether Sunshine failed, but why. The simple answer is that it’s in the regime’s interest to protect the status quo, accepting only so much trade and commerce as are necessary to sustain its military, security, and material priorities. Any positive change for which a foreign or alternative institution can take credit is a threat to the regime’s legitimacy. This goes far to explain the failure of U.N. food aid programs, which Pyongyang has hobbled with obstructionism, corruption, and outright diversion, and (as we’ve recently learned) infiltration by its spies.

Even so, and no matter how demonstrably regime engagement has failed to transform North Korea, its defenders raise a fair point when they say that isolation alone won’t change North Korea for the better.

What policymakers urgently require, then, is some way to weaken the North Korean government while rebuilding North Korean society — a way to begin nation building now by connecting the wider world with those North Koreans with an interest in transforming their society into a peaceful, prosperous, and humane one. What policymakers require is a strategy for guerrilla engagement, to empower the rise of independent, sometimes clandestine, institutions at the farm, village, factory, and town level, to fill the voids in North Korea’s governance, with the ultimate objective of regime replacement rather than mere regime collapse.

The European Alliance for North Korean Human Rights has parallel thoughts. It collaborates with North Korean defector, poet, author, and intellectual Jang Jin Sung to propose a what it calls “separative engagement,” a model of engagement focused on reaching the North Korean people directly.

“Guerrilla engagement” begins with these same principles, but extends them in more subversive directions, and combines them with other non-military instruments of national power, as part of a comprehensive strategy to achieve change. The sine qua non of guerrilla engagement is the deployment of technology to allow direct communication and engagement with the North Korean people — not minders or bureaucrats in Pyongyang, or officials working for state trading companies in Dandong — but farmers, teachers, journalists, smugglers, merchants, midwives, doctors, and mechanics in Hoeryong, Sinuiju, Chongjin, and Hamhung, and in a thousand villages and factory towns scattered between them. For their own protection, most of these people will not know the identities of other members of the underground. Initially, few of them even realize that their work has political implications at all. They will simply be skirting the state’s rules to provide valuable goods and services to their fellow citizens, just like many North Koreans are already doing today.

The challenges to this are obvious. Since Kim Jong Un’s dynastic succession in 2011, he has prioritized sealing the cracks in North Korea’s information blockade. That crackdown has cut the flow of refugees in half, and has throttled the flow of contraband information and consumer goods across North Korea’s borders. Once-hopeful trends in information penetration — trends that had given many of us long-term hope for North Korea — are slowing, and may yet come to a full stop. Writing at NK News, Chad O’Carroll has proposed one possible way to break the blockade again. I can think of others, but people in Pyongyang read this site, so I’ll keep them to myself.

Pyongyan visit 9 jun 2015

For now, consider the possibilities once the U.S. and its allies give the North Korean people the gift of free speech. Shatter this blockade and the possibilities are limitless.

~   3   ~

Once the North Korean people have access to communications, guerrilla engagement can take its first important step: shifting the balance of economic power away from the regime and toward the people. This will require two parallel initiatives: first, using financial sanctions to de-fund the palace economy; and second, establishing an independent financial system to unleash the peoples’ economy, and with it, the production and transportation of food, consumer goods, and information.

To do this, South Korea (or Japan, which is seeking ways to influence events inside North Korea) should leverage electronic communications to build a virtual electronic banking network for North Korea’s underprivileged classes. This network would allow North Korean merchants to make electronic payments and transactions using dollar accounts in banks based in New York, Tokyo, or Seoul. The use of dollar accounts would not only protect this underground economy from reactions by the North Korean and Chinese central banks, it would also allow the U.S. Treasury Department a greater measure of control over regime-connected figures who would invariably tap into it. It would also give the U.S. and South Korean governments (and the local networks they empower) a credible threat to wield against officials that cracked down on the people. For the regime, it would be tantamount to financial receivership.

The establishment of a virtual dollar economy would open North Korea’s borders, not only to remittances by refugees to their relatives, but to charitable donations by church groups to local agents operating humanitarian organizations inside North Korea itself. These groups would feed North Korea’s dispossessed — the starving orphans that haunt North Korea’s markets, those languishing in state institutions, those at the bottom of the songbun scale, and perhaps even prisoners, if guards could be bribed into permitting it.

With money and information flowing through the people’s economy and frozen in the palace economy, many officials, soldiers, and border guards would have nowhere to turn for their paychecks but the merchants, traders, and NGOs that harnessed this new financial system. Corruption would take its toll, smuggling would rebound, and more fertilizer, high-yield seed, medicine, and dollars could enter the country. Humanitarian NGOs could then purchase food smuggled in from China, pilfered from state stocks, and grown on private-plot farms called sotoji, one of the least talked-about and most important new sources of food for many North Koreans. NGOs could focus on promoting sotoji farms as a humanitarian strategy, supplying them with better seed, fertilizer, agricultural advice, and bribe money to secure the tolerance of officials. At the same time, those who continue to rely on meager state rations or salaries paid in North Korean won would be priced out of the market. In time, they, too, would come to depend on the virtual dollar economy, and might seek to join clandestine unions that would supplement their wages and rations. In the dollar markets, prices for food and consumer goods would fall, as more and higher-quality food were drawn into the markets from sotoji farms, and from across the borders.

In time, independent small-scale manufacturing would also become possible. Smuggled materials could supply underground or gray-market workshops and factories, using local labor earning steady wages, to make goods that the people want.

A virtual dollar economy would have to contend with official resistance, of course, but today, corruption is so endemic that North Koreans with money consider greasing the palms of regime officials to be just another cost of doing business. Here, sanctions would play an important complementary role. Those officials would have to look the other way if the Treasury Department unleashed a parallel crackdown on the regime’s funds and accounts based in China and elsewhere. If merchants suddenly had a greater capacity to pay regime officials than the regime itself did, Pyongyang’s control would begin to break down. Gradually, the balance of power would shift. Regime officials would be coopted, unwittingly, by an alliance of external and internal forces. In time, the influence of clandestine NGOs would spread to military units, whose soldiers are often sick or underfed. And in a society where force is law, it can be a useful thing to have friends within the security forces. Soldiers might even be paid and fed to provide security to markets, freight, goods, and people during their off-hours, including North Korea’s vulnerable women. This could be a first step in fracturing the cohesion of the security forces.

A free communications network could have other transformative effects. It could augment and replace North Korea’s broken public health system with tele-medicine, staffed by volunteer foreign doctors and local nurses, to treat the sick with smuggled medicines. Volunteer teachers in South Korea could teach virtual classes to orphans, to low-songbun students seeking valuable life skills like auto mechanics, engineering, or medicine. As the people’s economy developed, communities could gain independence in other important ways. Imported solar panels, which are increasingly available inside North Korea, would give the people independent sources of electricity. With independent sources of food, electricity, and other items the market could supply, rural areas, and eventually, entire regions, could gain economic and ideological independence from Pyongyang. But even this is only a beginning.

In time, as the security forces became overwhelmed by the volume of unregulated expression and commerce, guerrilla engagement would allow for more subversive activities to take place. The South Korean Unification Ministry could create a national clearinghouse for virtual family reunions. South Korean churches could live-cast services across North Korea, and no North Korean parishioner would know the name of any other parishioner. International activists could teach North Korean factory workers to organize clandestinely to demand better working conditions and better pay, and how to conduct work stoppages and slowdowns.

A network of guerrilla journalists could tell the world about these acts of resistance from inside North Korea, and publish news reports from around the world for North Koreans to read on their devices. In time, clandestine NGOs and churches (led by ministers based in South Korea) could begin feeding starving low-ranking soldiers, treating their medical conditions, and quietly introducing them to subversive ideas about spirituality and governance. In theory, it might even be possible for North Koreans to register remotely as voters, vote in referenda on policies that affect them, and elect a government in exile. If labor organizations become established, they could eventually coordinate a nationwide general strike, with the knowledge that any overreaction would be reported, photographed, filmed, and covered worldwide.

Even this regime knows that it can’t kill and imprison everyone.

~   4   ~

Sir Robert Thompson, the great theorist of insurgency and counter-insurgency, is generally credited with the strategy that defeated the Malayan insurgency in the 1950s. What impressed me so deeply about Thompson’s memoir of the Malayan insurgency was how little it said about military tactics, and how much it said about law, journalism, governance, policing, and intelligence. In a society ruled by violence and terror, like today’s North Korea, these things all support the reestablishment of a functioning civil society, or an objective that could be restated in a single word: legitimacy. The allegiance of a people will inevitably migrate toward the side that establishes legitimate governance, and the side that establishes legitimate governance is the one that provides for the needs of the people. The side that provides for the needs of the people — and in North Korea, there is no question that the people have many unmet needs — is the side that is responsive and accountable to them.

At the same time, a diplomatic campaign could gradually deny Pyongyang its international legitimacy until it ends the crimes against humanity it commits against its people.

If providing for the people is the prerequisite of a government’s legitimacy, then there is no better way for the South Korean government to be a legitimate government for its citizens in Chongjin, Wonsan, and Hamhung than by providing for their needs, too, if indirectly and clandestinely at first. For now, from the standpoint of domestic South Korean politics, this is unlikely. But once guerrilla engagement established local shadow governments, amenable to influence from Seoul, the South Korean government could play an important role in funding and organizing them as instruments of information operations, humanitarian aid, reconstruction, and the extension of Seoul’s legitimacy to North Korea itself. The work of underground schools, journalists, and unions could become more subversive, eventually challenging the state through strikes, demonstrations, barricades, and acts of non-violent sabotage to disrupt the oppressive work of the state’s security forces.

Guerrilla journalists could also broadcast an increasingly subversive message to the North Korean people, vividly portraying the state’s corruption, class divisions, culpable waste of national resources, and failure to provide for the needs of the people. Reporting on Chinese influence over Kim Jong Un’s regime would undercut the regime’s message of nationalist independence. Reporting on Chinese abuses of North Korean refugees, particularly women, would mobilize anti-Chinese sentiment, and deter any temptation by China to intervene militarily. Guerrilla journalism could also criticize Kim Jong Un’s lifestyle, legitimacy, and competence to rule.

Eventually, trade networks and labor organizations could organize clandestine security guards and police to protect the population from violence by soldiers and members of the security forces. Initially, paid, masked security guards and guerrilla policing organizations could patrol high-crime areas, where marauding bands of soldiers rape vulnerable women, bully traders, and rob farmers. Some of the police might be recruited from deserting soldiers, who might otherwise die from lack of food and medical care.

Because the North Korean military tightly restricts the distribution of ammunition, soldiers who commit crimes against the civilian population often wander unarmed; thus, in many cases, the shadow government’s police could be effective without the use of lethal force. To prevent wanton violence and revenge killings, and to protect the people against arbitrary arrest, torture, and extrajudicial execution by the security forces, communities could organize local courts, perhaps with remote electronic training, support, and appellate review from outside North Korea.

Guerrilla courts would have the exclusive authority to permit or order the use of deadly force against military officers or members of the security forces responsible for the most severe human rights abuses. Any violent act not sanctioned by the courts, regardless of the affiliation of the person responsible, should be treated like a crime. Like all legal systems, a court empowered to punish violent crime would help to deter future violent crime, including by a regime that does not necessarily explicitly authorize crimes committed by corrupt officers or undisciplined soldiers. To the extent deadly force was necessary to protect journalists, trade unionists, and NGO workers, guerrilla police forces could obtain arms and ammunition from soldiers motivated by hunger, disease, drug addiction, or grievances against their officers. Guerrilla organizations that engaged in extrajudicial violence should be denied financial support, and when appropriate, punished criminally.

Of course, the regime would react violently to this, to the extent it could identify those responsible, to the extent this dispersed network of dissent did not overwhelm the state’s capacity to suppress it, and to the extent its local officials had not been coopted by the resistance. But the longer these groups could delay a broader, violent confrontation with the regime, the more widely this clandestine organization could penetrate North Korea’s society, government, and security forces, and the more likely it would be to survive and prevail once that confrontation comes. In that confrontation, citizen journalists with hidden cameras would be critical to deterring a violent reaction by the state, and to publicizing any such reaction both inside North Korea and globally. This, in turn, would spur diplomatic and political action to deprive North Korea of foreign investment, finance, diplomatic support, and international legitimacy. It might eventually spur South Korea toward accepting its responsibilities for the welfare of the North Korean people, as their legitimate government.

~   5   ~

In February of 2014, a United Nations Commission of Inquiry released a report finding the North Korean government responsible for “crimes against humanity, arising from ‘policies established at the highest level of State,’” including “extermination, murder, enslavement, torture, imprisonment, rape, forced abortions and other sexual violence, persecution on political, religious, racial and gender grounds, the forcible transfer of populations, the enforced disappearance of persons and the inhumane act of knowingly causing prolonged starvation.” This status quo is not peace. It is not quite the absence of war. It is a lurid kaleidoscope of violent crime, waged by a few armed men against a defenseless majority. With its political competence in decline, it can’t last.

Over the weekend, a North Korean soldier defected to the South across the DMZ. The North Korean army is now said to be laying mines along the DMZ to prevent more defections. Last week, a North Korean, who may or may not have been the latest in a series of armed soldiers to desert his post, was shot and killed by Chinese police. (Update: he was a civilian.)

But this essay is not about predicting the direction of history; it is about finding ways to influence it. In such desperate, violent circumstances, completely non-violent change may be an unrealistic ideal. But it is always realistic, and compelled by both morality and our national interests, to seek a strategy to deter and prevent as much suffering and loss of life as is still possible. With Kim Jong Un’s rejecting political reforms and pursuing policies of war and violence, a controlled demolition of the regime may be the only way to save the Korean people from an anarchic collapse (on one hand) and the horrific status quo (on the other).

When totalitarian states collapse, they tend to collapse suddenly, violently, and chaotically, in the way that Romania, Syria, and Libya all did. There have been exceptions, like the fall of Enver Hoxha’s rule in Albania, but if the violence of any Götterdämmerung is proportional to a system’s totalitarianism, then North Korea’s collapse is likely to be more violent than any of these examples. If Götterdämmerung isn’t already imminent, the North Korean people will need whatever time they have to begin weaving the fabric of a civil society, while unraveling the discipline and unity of command the state will need to wage a civil war against them.

First, guerrilla engagement would overwhelm the state’s machinery of censorship with millions of isolated words and acts of micro-subversion, as described in Part 3. It would equip North Koreans to secede from and resist the state with money and information. In this phase, underground organizations would avoid, or delay for as long as possible, a direct confrontation that would provoke a violent reaction by the regime, to allow peaceful infiltration and evolution to advance as far as possible. The principal objective of this phase would be to establish the roots of a legitimate shadow government — a broad coalition of commercial and humanitarian networks to provide the population with food, medical care, education, electricity, consumer goods, information, and in some areas, a small measure of security from lawlessness and crimes against humanity.

Second, guerrilla engagement would coalesce a critical mass of these isolated shadow networks into a broad-based, loosely-connected political organization with a common vision of reunification under a liberal, humane, free-market, and representative system of government. No resistance movement has ever challenged a determined government successfully without such a galvanizing vision, and without a broad-based political infrastructure to supply it with intelligence, food, shelter, money, recruits, and the incalculable psychological empowerment of knowing that others share their aspirations. Very few states have survived while opposed by such a political infrastructure. As Mao Tse-Tung said,“The guerrilla must move amongst the people as a fish swims in the sea.” Guerrilla engagement would seek to build this political base, while delaying (and later, deterring) a violent reaction by the state. At this stage, the shadow government would begin to wage aggressive information operations against the regime and its foreign backers. Information operations should have a strongly nationalist orientation, to help deter a Chinese intervention.

Third, guerrilla engagement would attempt to demoralize, coopt, and recruit as many members of the military and the security forces as possible, to divide them and disrupt their readiness, discipline, and unity of command. Sanctions would be essential in this process, to disrupt the military’s pay, supply, and commissary systems, and to draw soldiers into economic dependence on the shadow government.

starving nk soldiers

[Starving North Korean soldiers. Image from Rimjin-gang.]

On an individual and small unit level, resistance networks would recruit hungry and disgruntled soldiers, such as those who have increasingly turned to violence against their own commanders, the civilian population, or Chinese civilians. Once recruited, these soldiers could pilfer fuel and critical supplies, sabotage and steal weapons, spread subversive information, and encourage the disobedience of orders harmful to the population. A contemporary example is the practice of regime soldiers stealing fuel from trucks and ships, and replacing it with corrosive salt water. Eventually, corrupt officers could also be coopted into resisting orders to suppress dissent. The objective would be to dilute the security forces’ readiness, discipline, and unity of command, and render as many units as possible unwilling or unable to execute a violent crackdown, or to actively oppose one.

At the same time, local leaders of the shadow government could secretly connect South Korean military officers with key regional commanders in the North Korean military. The objective of these contacts would be to persuade key North Korean officers that the consequence of a violent crackdown against an organized (and potentially, armed) population would be civil war — a war that would be unwinnable in the face of crippling financial sanctions, widespread internal dissent, and diplomatic isolation. If vast areas of North Korea’s mountainous interior slipped out of the regime’s control, they would be difficult and costly for a mechanized, road-bound army with few helicopters to regain. The regime could not hope to seal two land borders and two long coastlines. On the other hand, officers who refuse orders that violate the laws of armed conflict should be offered immunity from prosecution. Those who oppose them should also be offered foreign backing, and a meaningful role in the reconstruction of a united Korea.

Fourth, and only after the decay of the security forces reaches a critical stage, the resistance could challenge the state openly through a coordinated, nationwide wave of work stoppages, acts of non-violent sabotage, strikes, and protests. This critical stage would arrive when the resistance coopts enough soldiers and units that, if ordered to carry out a violent crackdown, enough units would disobey or resist to render the order ineffective. Where the orders are carried out, guerrilla journalists must have a sufficient presence to ensure that any violent reaction is filmed, photographed, and reported both at home and abroad, catalyzing more internal resistance and foreign disinvestment and sanctions. In this way, guerrilla journalism could attach a prohibitive diplomatic and financial cost to a violent crackdown. By documenting any crimes against the population, guerrilla organizations could also credibly threaten regime commanders with accountability before local (or eventually, international) courts. Even by demonstrating a broad presence throughout North Korea, guerrilla journalism could help deter and restrain the regime’s excesses.

northkorearahmap

It is at this point, after the resistance demonstrates its capacity to disrupt the regime’s control, but before a violent reaction, that a diplomatic approach to Beijing may receive a more open-minded reception. Under these circumstances, Pyongyang may see agreement to reforms and disarmament as its best available option. If Pyongyang credibly agrees to halt its suppression of the resistance and implement reforms, the U.S., South Korea, and Japan could compel the resistance to temporarily halt its campaign of defiance. Failing this, China may see an agreement to force a transition of power by cutting off support to the regime as a better option than an outbreak of chaos along its northeastern border. In exchange, the allies could offer the eventual removal of U.S. ground forces from the Korean Peninsula, to keep foreign forces south of the 38th Parallel in a reunified Korea, and to recognize the validity of Chinese investment contracts with the former regime. Deprived of external and internal support, the regime would have to choose between accepting reforms and fighting a war it could neither afford nor win.

If Kim Jong Un could not see this for himself, then surely his military commanders would.

With each passing year since 1994, a peaceful transition of North Korea has seemed less likely. None of our highest hopes for the evolution of North Korea into a humane and peaceful society has been plausible for a decade or more. There is a long history of North Koreans resisting the state spontaneously, although all of this resistance has been isolated and easily contained. If collapse does come unexpectedly, the South Korean government could partner with a clandestine political infrastructure to restore order and security, coordinate humanitarian relief, feed the hungry, heal the sick, address questions of transitional justice through the rule of law, and reestablish legitimacy. Today’s purges and indiscipline in the military may mean that North Korea is descending into chaos, and that we’ve run out of time for guerrilla engagement to restrain or mitigate the violence and anarchy it will entail. But it is urgent that the allies begin now, to restrain as much of this violence as we still can.

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Markets, food, and trade: steps forward, leaps backward (Pts. 1, 2 & 3)

~   Part 1   ~

Do you still remember March, when the “May 30 measures” were the next wave of “drastic” perestroika that would change North Korea? Those measures were supposed to “give[] autonomy management of all institutions, companies, and stores,” including “control over production distribution and trade from the state to factories and businesses,” and thus awaken “the inner potential of the country.” But today, Andrei Lankov, who has been one of the most forward-leaning predictors of economic reform in recent years, tells us that the regime is backing away from the reform proposal:

The ‘May 30th Measures’ envisioned that the new system would be expanded to include all North Korean enterprises, but this is not what has happened. Reports emanating from North Korea in the last two months leave little doubt that the expected transformation has at best been postponed, at worst, cancelled entirely. Right now, only a minority of North Korean industrial enterprises have been allowed to implement the new model.

What happened? Frankly, it is unlikely we will receive a definite answer to this question any time soon. Of course, it is quite possible that Kim Jong Un suddenly changed his mind and decided to stop reformist activities that he found to be politically dangerous and ideologically suspicious. It is also possible that the reforms faced determined opposition from conservative members of the bureaucracy and military. Last, but not least, it is also possible that North Korean leaders have come to understand the problems that such reforms would face without prior and proper changes to the financial system.

Whatever the reasons, it is clear that the North Korean government has decided to slow down the reform process. At the same time, there has as yet been no reversal. [Andrei Lankov]

I’m still not convinced that either the reforms or the retreat are real, but I won’t let that stop me from suggesting two more alternative theories. For example, Lankov cites the example of the Musan Iron Mine, which was paying its workers 300,000 to 400,000 won per month, “exorbitant wages by North Korean standards.” But in the case of Musan, power shortages and the squeeze on exports to China have led to reports of mass layoffs. The regime may have decided that it couldn’t afford either the higher wages or the risk of creating a pool of angry, unemployed workers. Or, the entire program may have been disinformation all along, meant to mollify workers at a time when state-run industry is demoralized, and when workers seeking steady pay vastly prefer scarce jobs at foreign currency-earning enterprises.

Either way, reform rumors often seem to cause more excitement on Massachusetts Avenue and the Yonsei campus than in Chongjin or Hamheung:

“A lot of top officials in North Korea are not sure which direction Kim Jong Un is taking them in,” says Park. “He doesn’t know how to be a leader. He doesn’t know politics, economy, culture or diplomacy.”

Initial plans for a more open market economy modeled on China was soon dumped, says Park, once it became clear opening up could jeopardize Kim’s iron grip on power.

“People are struggling to survive and are trading on the black market so the official economy is barely functioning.” Park adds “a lot of people are trading foreign currency and running small businesses but the power of the state to control that money is weakening.” [CNN]

One can observe this same gap in expectations with the so-called “6.28 measures,” which would let farmers keep a greater share of what they grow. The 6.28 measures also generated much optimism here, in Lankov especially, but failed to materialize in 2012, 2013, and 2014. North Koreans have heard these promises enough to stop believing them. From their perspective, “nothing has changed.” In Ryanggang Province last year, their shares of the harvest were actually about half of what the state promised. They’ve lost faith in the state, its collectives, and its excuses:

“As the state fails year after year to distribute a fare share to the workers, motivation among collective farmers continues to decline,” he explained, adding that the high hopes the bunjo system once instilled in people have largely fizzled out, only to be replaced with more misgivings.

He went on to say that the state’s failures have given way to a population that “no longer believes in state policies,” and is fully aware that the state “simply hides behind excuses of ‘aid to the military, shortfalls of production targets, and purchasing seeds for the next harvest'” to explain away its broken promises. “We’re not going to be fooled again this year,” the source noted. [Daily NK]

As Marcus Noland and Stephan Haggard have argued, what foreigners are tempted to describe as “reform” in North Korea often amounts to state policies catching up to what citizens have already established as a fact of life, legally or otherwise. Even if the 6.28 measures are real, unanswered questions about how they will be implemented will determine how much of a difference they will really make in the availability and production of food. Perhaps 2015 will be the year when the regime finally implements the 6.28 measures, but the reform North Korean farmers really want — and the change they’re making a fact of life now — is private, individual, for-profit agriculture, sometimes called sotoji farming.

~   Part 2   ~

For obvious reasons, no one knows for certain how much of North Korea’s food is grown on sotoji plots, but Lankov has estimated “as much as 60 percent of all food sold on the local market” in some areas. U.N. food and crop estimates say little about private agriculture, but it’s probably one important part of the reason why the state’s border crackdowns haven’t caused a return of famine. The practice is common enough that “[p]eople in farming areas are busy cultivating small individual plots during this season, constantly moving around hilly areas and the banks of the river from dawn to dusk,” and complicating efforts to catch border-crossers. Because the state has monopolized the best land for the collectives, sotoji farmers have cleared plots in the mountains. This, along with the clearing of trees for firewood, has contributed to the North’s deforestation problem.

The regime’s response to sotoji farming has been similar to its treatment of the markets a decade ago — tolerate but squeeze. In previous years, it has confiscated plots, or limited their size to 30, and later, 100 square meters in the immediate vicinity of the grower’s home. This year, the regime is trying to tax the plots to death, raising land use fees by 50% and requiring farmers to pay in produce. Many farmers can’t afford this higher rate and call the decision “absurd” when the regime still can’t provide survival rations. The regime has responded with threats of outright confiscation. In some areas, officials have prohibited the clearing of trees, or ordered residents to plant trees on existing farm plots:

Another source reported that people have expressed frustration about the fact that food security is seen as less of a priority than reforestation. “If trees are planted on hillside plots or strips of land near the roads, there will be less for people to eat. If the state doesn’t guarantee food, people will just move elsewhere and keep cultivating whatever land they can, decimating other forest areas,” he concluded. [Daily NK]

So far, squeezing the sotoji has not caused hardship for most of the people. Food prices were largely stable and well below their usual seasonal levels during the lean season in March and April. The reports credited various reasons for the improved food supply, including aid from Russia, trade with China, and paradoxically, “a program of encouraging people to cultivate smaller plots of land” within the collectives. (Note well: when I argue that the regime itself could and should ease the food crisis through land reform and imports rather than asking foreign donors to fill the void, this is what I mean.)

Meanwhile, we shouldn’t lose sight of the fact that most North Korean still suffer from food shortages, and one in six North Korean kids still suffers from chronic malnutrition. Worse, North Korea is facing a serious drought that could worsen the food crisis next year. Pyongyang could close its food gap easily with a small reallocation and redistribution of the resources it squanders on its military and its oligarchy.

But not all of the news is bad. One area where there is clear evidence of improvement is the jangmadang, or markets. The Daily NK reports that the regime has eased up on market trading, including by dispensing with a widely disobeyed prohibition on women under 50 selling in the markets. This has created significant opportunities for those who make their living by selling on the people’s economy. As a result, the number of market stalls in North Korean cities has increased rapidly in the last three years. One incentive for this is that the “stall fees” officials collect from merchants are increasingly lucrative, which enlists local officials in the growth of the market system. For now, business is good, and vendors pay high prices (RMB 4,500) to officials for market stalls. In addition to this, there has been a proliferation of small fast-food restaurants and coffee shops in the provincial towns.

There are still limits, of course: vendors caught selling South Korean goods risk losing their stalls. But there is evidence that this is a nationwide trend, suggesting a top-down decision to relax the rules. Can it last? A review of the history tells us that markets have waxed and waned as the regime vacillated between cracking down and easing up. North Korean women share this concern:

[M]ost women are perplexed, if cautiously elated, by the leniency shown by a system that has wielded such stringent power and regulation over them for so long. “The shift in sanctions feels like hell has frozen over,” many have remarked, adding that they “finally have the opportunity to make ends meet.” Still, many are wary, noting that “you never know when the authorities will abruptly declare a new policy or revert to stringent clampdowns.” [Daily NK]

~   Part 3   ~

There is also good news on the transportation front. Well-connected merchants called donju have gone into the business of moving goods and people, pressing government-owned trains, trams, and boats into commercial service by renting them from the Ministry of Railways and Fisheries, or by importing old trucks and buses from China and kicking up a cut to officials in exchange for permission to operate. (The donju were also buying electricity from corrupt state officials, paying illegal “electricity taxes” in exchange for a more reliable power supply — up to 10 hours a day for 20 days.) Donju are also starting taxi services in the cities.

The establishment of an alternative transport system would be good news. It would help break down the regime’s internal controls on the movements of people and information. More efficient transportation of goods would also erode the inequalities between regions (particularly between Pyongyang and other places).

But as North Korea watchers have learned, for every few small steps forward, there is eventually a Great Leap Backward. So can it last? To answer that question, we have to know whether the positive changes are happening because of Pyongyang, or in spite of it. If the latter is more true than the former, it may be that the regime is concentrating on enforcing border and information control at the expense of other internal controls. It certainly isn’t talking about reform and opening, and if there’s general agreement among Korea watchers about anything, it’s that the regime regime remains firmly opposed political reform or change. Pyongyang is clearly determined to seal up the cracks in the information blockade by restricting cross-border travel and snuffing out cross-border communications. That crackdown is backed by the full power and resources of the state, and almost certainly comes from the very top. In April, the regime deployed even more inspection teams to the border, to catch both border-crossers and users of illegal cell phones.

This crackdown is stifling consumer trade. It is making it difficult for traders to cross the border with China, and to obtain merchandise from China. These restrictions have significantly reduced the volume of consumer imports. Traders are also worried about politicized prosecutions of cross-border traders as spies, and inspections designed to root out ”impure members hidden in society;” “narcotics, human trafficking, illegal phone calls, and defections;” and “vibes from capitalist delinquents and punks” entering from China. Throughout much of 2014, Rimjingang received reports of “a series of purges and firing squad executions of Party cadres” in Pyongyang. One official was executed for leaking word of the arrival of a South Korean aid shipment in Nampo. Another, a Chinese resident, was said to be executed for “spying, narcotic trafficking, selling of impure recordings.” According to one Rimjingang source in Pyongyang, the authorities announced the sentence by posting a notice at the Chinese resident association office, possibly “to set an example and to intimidate and warn Chinese residents who often travel to China.” Chinese traders report that they are only allowed to use their mobiles in designated areas — probably so that the state can monitor their conversations — and levies heavy fines on those caught using their phones anywhere else. It’s clear, then, that whatever the economic trends, the political trends are regressive and reactionary.

Can we make any sense at all of this contradictory information? It’s possible that there’s no real pattern here at all, just scattered pixels of uncoordinated and arbitrary decisions and indecisions by officials at every level and in every province. Indeed, some of the information is simply contradictory; some reports say fuel prices have eased, while other say they’re skyrocketed. Most of the positive developments in the preceding paragraphs may well have resulted from local or low-level official abstaining from enforcing the rules, possibly due to corruption or a profit motive. To some extent, a rebound in markets probably represents their recovery from The Great Confiscation five years ago. One must also wonder how long a revival the markets can last when the regime is making it harder to import food and consumer goods from China, and when it’s making it harder for people to grow much of the food that’s sold there. What use is an empty market? One of the best times for North Korea’s jangmadang was 2009, right before The Great Confiscation wiped out the savings of a nascent middle class who had gained a degree of wealth — and critically, financial independence — from the markets. If the state sees that the people are gaining financial independence, it may feel threatened.

I do see two constants in all of this. First, there is the desperation and inexhaustible resourcefulness of the North Korean people. Second, there is the Inner Party’s determination to contain them. There is also a third, dynamic trend — the Outer Party’s growing corruption, which allows the people’s economy to survive, and to fill new voids left behind by the state’s failure.

Every commentary about the economic transition of North Korea can only be a snapshot, or a most a few frames, of a moving picture. Whether you perceive that the small steps forward are outpacing the great leaps backward, or how, depends on when you take the snapshot, and which part of the frame you focus on. It also depends on whether you’re willing to accept reform rumors as true, and to assume they’ll ever come to anything. More often than not, however, behind each of the regime’s reform measures is a much more consequential, latent, market-driven trend that the regime is simply trying to catch up to.

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Kim Jong Un seeks friends and funds abroad as he isolates his people.

In the three years that he has been in power, His Porcine Majesty has found plenty of time for Dennis Rodman, but none for meetings with foreign leaders. Suddenly, in the last two months, he has flirted with (1) a summit with South Korean leader Park Geun-Hye, (2) inviting Japanese Prime Minister Shinzo Abe to Pyongyang, (3) and a visit to Vladimir Putin in Moscow in May. His central bank even “committed itself to implementing the action plan of ‘international standard’ for anti-money laundering and combating the financing of terrorism.” (I’m sure Pyongyang will find some way to reconcile this with its arms sales to Hezbollah and Hamas.)

If you believe that talks with North Korea are immediately capable of solving anything, or that they are an end in themselves, you may be pleased that Kim Jong Un has developed this urgent interest in diplomacy. What accounts for this belated quinceañera, assuming that any of these meetings comes to pass? Only Kim Jong Un knows, but I doubt it has anything to do with a yearning for more intelligent companionship. There’s almost certainly a financial motive, if not more than one.

One motive may be a growing threat of sanctions. Kim’s charm offensive began just after December 19th, when FBI and President Obama announced that North Korea had hacked Sony Pictures and threatened audiences for “The Interview.” Almost immediately, Congress called for stronger sanctions, and centrist figures in the foreign policy establishment, including Richard Haass and Winston Lord, began calling for regime change. President Obama himself suggested that the collapse of North Korea’s system was inevitable, although he didn’t declare an intent to catalyze that result.

On January 2nd, President Obama signed Executive Order 13687, authorizing sanctions against all entities and officials of North Korea’s government and ruling party, and (more importantly) authorizing secondary sanctions against the Chinese, and other entities that provide Pyongyang its regime-sustaining hard currency. The order was potentially sweeping and devastating, but in its actual impact, it reached only three entities that were already sanctioned, and ten mid- to low-level arms dealers. But the President also said that this was only a first step, which left Pyongyang scurrying to secure its financial lifelines.

Pyongyang’s charm offensives always seem to come just as the political will waxes to enforce sanctions against it. The charm offensives play on the individual interest of each interlocutor — Park Geun Hye’s domestic unpopularity, Shinzo Abe’s desire to bring abductees home, Putin’s search for ways to f**k with Obama — to disrupt any coordination among them. It works because we’re dumb enough to let it. And once sanctions enforcement wanes, so will Kim Jong Un’s interest in diplomacy.

One thing is clear enough: a credible threat of sanctions certainly hasn’t done any harm to prospects for diplomacy with North Korea. I could also say, with equal conviction, that they haven’t harmed John Hinckley’s odds of marrying Jodie Foster.

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Another possible explanation is a series of reports suggesting that North Korea’s trade relations with China are declining. For one thing, fewer North Koreans are traveling there:

Overall figures for North Korean residents entering China annually totaled between 100,000-120,000 until 2010 before jumping to 150,000 in 2011. A steady period of continual increase in visitors followed until 2013, when the number of North Koreans traveling to China reached an all-time high of 200,000, roughly half of whom noted their reason for making the trip as “looking for work.” Aside from finding employment, 34,000 went to conduct business or attend a conference, and 1,500 went purely to travel. This represents a 60% and 50% respective reduction when compared to last year’s figures. Visits to friends and relatives dropped to 1,100–one-third of those making the trip for the same reason in 2013.

Male visitors [150,000] composed five times total amount of females [30,000] visiting China from North Korea. Most North Koreans [77,000] traveled by boat for the trip. [Daily NK]

North Korean agents who do travel to China are also having more difficulty doing business there. There’s no evidence this has anything to do with sanctions. It appears to be because of a combination of a sagging Chinese economy and the lingering effects of the Jang Song-Thaek purge. After that purge, I posted here that the regime had called home large numbers of its China-based money men, presumably men who were loyal to Jang or thought to be, and that the money men had stayed away in droves. Subsequently, I posted about another reported defection of a senior financier in Russia. That trend continues:

A source in a northeastern Chinese city, who spoke on condition of anonymity because of the sensitivity of the issue, said only about 30 percent of the North Korean businessmen have returned to China after being summoned.The summonses are also believed to be part of efforts by North Korea to redistribute the “rights of doing businesses with China,” a key source of earning hard currency, to its ruling elite, the source said.”The replacement of businessmen loyal to Jang Song-thaek has been gradually carried out and a lot of North Korean businessmen were summoned until late last year,” the source said. “Of those being summoned, only about 30 percent returned to China.”There are no official data on how many North Korean businessmen are working in the Chinese border cities.A second source in another Chinese border city with North Korea said that about 170 North Korean businessmen in the city were replaced over the past year.With Chinese investor confidence eroding over the North’s unpredictable behavior, the new North Korean businessmen come under further pressure in building business connections with their Chinese counterparts, the second source said. [Yonhap, via the Korea Herald]

Not only is the sagging Chinese economy hurting Bureau 39, but according to the report, “Chinese investor confidence” is also “eroding.” One reason may be the arbitrary behavior of North Korean officials, including their inclination toward unilateral price increases and demands for bribes and prostitutes. I can’t speak to the latter concern, but the former concern can’t have improved since Kim Jong Un had Jang shot for “selling off precious resources of the country at cheap prices.” This is consistent with evidence of a sudden onset of distress in North Korea’s mining industry, although I can’t say whether poor investor relations are a cause of the problems or a consequence of them.

The report cites Korea Trade and Investment Promotion Agency (KOTRA) figures, according to which, “North Korea’s annual trade with China fell 2.4 percent from a year ago in 2014,” from $6.54 to $6.39 billion, “marking the first decline since 2009.” These figures are sourced to Chinese government statistics, which is one reason to distrust them. For example, we read a lot of reporting last year that China had cut off North Korea’s crude oil supply, only to find that China had merely reclassified its trade as aid, or supplied Pyongyang with refined petroleum products (such as jet fuel) instead.

The report also claims that “North Korea’s exports of coal to China slipped 17.6 percent from a year ago to $1.13 billion, marking the first drop in 8 years.” I see more extrinsic evidence that that report is accurate.

And there are other signs of trouble: it would be a snub for Kim Jong Un to visit Russia before he visits China, and it was a snub for the leaders of China and South Korea to meet before the leaders of China and North Korea met. China didn’t send a representative to Kim Jong Il’s latest birthday party, either. This doesn’t yet mean that China has broken with North Korea. It certainly doesn’t mean that China wants to destabilize North Korea. It bears watching, however.

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In other ways, Pyongyang is intensifying its isolationism. The ones that have attracted the most media attention are its bans on foreigners entering North Korea for a marathon and its creepy Arirang Festival. (By contrast, it recently granted permission for this “peace” march by a group of left-wing activists, led by Christine Ahn and Gloria Steinem). The dubious pretext for Pyongyang’s isolationism is that it is a precautionary quarantine against Ebola. This has inconvenienced two groups of useful idiots — the North Korea tour companies and the slummers who use them. I don’t see the down side to that. In the long run, it will mean fewer hostages for Pyongyang, and less hard currency for its bank accounts.

Why would Pyongyang shut down this lucrative, low-risk traffic in people with more money than sense or soul? No one knows but Pyongyang. Maybe it really is terrified of Ebola, yet confident that Gloria Steinem isn’t a carrier. Then again, maybe it’s terrified of a contagion of another kind.

For years, the pro-“engagement” argument for tourism in North Korea has been that there is something transformational, even dangerously subversive, about it that minders, deceptions, and other controls can’t contain. (Somehow, I doubt that Koryo Tours and Young Pioneers make the same argument to their contacts in Pyongyang.) I’ve usually been dismissive of this argument, although I’d be genuinely interested in hearing any evidence that Pyongyang thinks it has anything to fear from this kind of tourism. Even if that argument had any merit, Pyongyang knows how to deal with foreign subversive influences. Maybe it just did.

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Kim Jong Un has been isolating low-caste North Koreans since the very beginning of his reign. His regime continues to do that by terrorizing traders, cracking down on cell phones, and blocking the flight of desperate people:

“A family of four from North Hamkyung Province attempted to escape with the help from a border guard and a smuggler near the end of last month; however, someone tipped off the proper officials, resulting in their arrest,” a source in Yangkang Province reported to Daily NK on February 4th. “To expedite the family’s escape, the smuggler got a number of soldiers, all of whom he deemed trustworthy, involved. But too many caught wind of the family’s plot to defect, which led to the family’s eventual capture.”

The family’s eldest son purportedly fled while being held in custody, leaving behind the parents and their younger son to endure relentless interrogation at a SSD-run detention center, where they are “as good as dead,” according to the source, because not only were they themselves planning to defect, but now their son presumably succeeded in doing so despite being held in custody. [Daily NK]

Human Rights Watch has documented the border crackdown in a new report, which you can read here.

“North Korean authorities are using brutal punishments to shut the door on people fleeing the country, and cracking down on those who share information with the outside world,” said Phil Robertson, deputy Asia Director. “Kim Jong-Un is trying to silence news of his systemic and pervasive rights crimes by going after the messengers, such as people with connections in South Korea or those who can help North Koreans flee there.”

The North Korean leadership has made clear the country must redouble its efforts to remain shut to the outside world.

“We must set up two or three layers of mosquito nets to prevent the poison of capitalism from being persistently spread by our enemies across the border into our territory,” said Kim Jong-Un, North Korea’s supreme leader, during a speech at the 8th Conference of Ideological Workers of the Korean Worker’s Party on February 25, 2014. “We also have to be active to block the imperialists’ plots for ideological and cultural invasion.” The “mosquito net” system Kim referred to was developed in the North to attract the inflow of foreign investment while blocking the infiltrations of foreign ideas, news, and culture. [….]

According to the escapees, the North Korean government has also been actively tracking down unauthorized phone calls from cell-phones operating on Chinese service provider networks being used by people in the North Korean border areas to call to China or South Korea. “The phones have no signal in the cities anymore and I have heard they even have mobile technology to find the exact location of the caller even after you hang up,” said Kim. “I used to call from my living room, but later I had to go high up in the mountains in the middle of the night and I was scared to talk for more than a minute or two.” Park said she used to get calls from North Korea at all times of the day and talk for long periods, but now the number of calls she receives has shrunk by approximately 60 percent since 2012.

“North Korea feels threatened by news and images of the outside world seeping into the country and now is trying to reassert its control by going after people bringing in the information,” said Robertson. “Talking on an overseas phone call, or watching a foreign television show should not be considered crimes, but the government is tightening control through repression and fear.”

More here and here. One backlash of this increased border control is a rise in cross-border violence, and more tension with China. North Korea’s border guards had come to rely on the bribes and extortion they taxed from this localized, illicit cross-border trade. With the loss of that income, the underpaid guards have turned to violent crime, and like all criminals, they go where the money is. China has since raised militias to patrol the border regions, and North Korea has purged an official of the Supreme Guard Command as punishment for the violence. There were also purges at the local level.

There is a very important point here, one that makes Kim Jong Un’s diplomatic outreach completely consistent with his isolationism: it costs money to pay border guards, buy cell phone trackers, and isolate the people you consider “wavering” or “hostile.” North Korea earns that money by extracting aid from foreign sources, and through its officially sanctioned trade relationships. Here is another way that sanctioning the regime can actually open North Korea to outside trade and influence.

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These reports paint a picture of a regime that is struggling to maintain its financial links to the outside world, while severing the economic, social, and cultural links between its people and the outside world. If a less isolated, less hungry, less brutal, and less provocative North Korea is in our interests, then our obvious policy response is to undermine both aspects of that policy — to facilitate illicit cross-border flows of information, people, money, and goods, while cutting Pyongyang’s hard currency flows.

The first part of this strategy is the more difficult one. Some of it can be done through broadcasting, some requires creative technological thinking, and some will require clandestine operations.

The second part is about sanctions enforcement, which requires financial intelligence, legal tools, effective diplomacy, and political will.

The reports of defections by North Korean financiers suggest a potential windfall of financial intelligence. Each of these men, and each of their laptops, represents a potential Rosetta Stone. I certainly hope some of them have found safety in the care of U.S. and South Korean intelligence agents. I’ll also express my hope that The Guardian and Al-Jazeera will refrain from getting them — and their entire families — killed, by printing their names.

The Obama Administration will also have to find the political will to dissuade South Korea and Japan from subsidizing Pyongyang and loosening their own sanctions. It will have to find the political will to threaten secondary sanctions against the Chinese and Russian interests that prop Pyongyang up. Lacking this, the administration’s policy will continue to fail. My guesses are (respectively) that it won’t, it won’t, and so it will. North Korea’s hostage-taking, threats, and inducements will recoup more modest financial benefits for the regime. That’s about all Pyongyang needs to undermine the effect of U.N. sanctions, and to sustain its provocative and repressive ways.

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