The Decline of North Korea’s Dope Industry

According to the Treasury Department, North Korea is still printing fake dollars, but no major North Korean meth and heroin shipments have been intercepted in recent years, leading it to believe that the regime is out of that business:

“There is insufficient evidence to say with certainty that state-sponsored trafficking by the Democratic People’s Republic of Korea (North Korea) has stopped entirely in 2009,” the 2010 International Narcotics Control Strategy Report released by the department said. “Nonetheless, the paucity of public reports of drug trafficking with a direct DPRK connection suggest strongly that such high-profile drug trafficking has either ceased, or has been reduced very sharply.”

The annual report said, “No confirmed instances of large-scale drug trafficking involving the DPRK state or its nationals were reported in 2009,” noting, “This is the seventh consecutive year that here were no known instances of large-scale methamphetamine or heroin trafficking to either Japan or Taiwan with direct DPRK state institution involvement.” [….]

The report noted that trafficking of methamphetamine along the North Korea-China border continues. “There are indications that international drug traffickers can purchase methamphetamine in kilogram quantities in some of the major towns on the Chinese side of the DPRK-China border,” it said. [Yonhap]

You can read the full State Department report here. Here’s what it says about Supernote counterfeiting, by the way:

“Counterfeit $100 U.S. notes called supernotes continue to turn up in various countries, including in the United States,” it said. “There are reports, for example, of supernote seizures in San Fransisco and a very large supernote seizure in Busan, South Korea, during 2008 and 2009.” Supernotes are uniquely associated with North Korea, the report said. “But it is not clear if recent seizures are notes which have been circulating for some time, or they are recently-counterfeited new notes.”

Overall, the evidence I’ve seen supports the view that North Korea’s large scale, state-sponsored meth and heroin production and export business has dropped off sharply, although it’s also possible that they’ve just gotten better at not getting caught. This doesn’t mean, of course, that Kim Jong Il has decided to just say no to drugs. North Korean diplomats are still being busted for selling other drugs on a fairly regular basis, though I’m not aware of any major drug busts last year.

Most likely, North Korea’s large-scale dope manufacturing is rusting just like pretty much ever major industry in North Korea. North Korea, which has tried to overcome the law of comparative advantage with silly ideas like ostrich and rabbit farms, is thought to have brought in experts from the Golden Triangle to teach it how to grow poppies. Former prisoners have identified this field in Camp 15, a political prison camp, as one place where opium poppies are grown:

North Korea’s short growing season may have done as much to doom this initiative as anything, including high-profile drug interceptions and the general decline of North Korean industry.

Where North Korea manufactures (or manufactured) illicit (to us) drugs is no longer a very well kept secret. At least some of the facilities used to manufacture the drugs were originally built by the Japanese during the occupation period. Here’s the Nanam Pharmaceutical Factory …

and the Hamheung Pharmaceutical Factory:

A big thank you to Curtis for those last two locations. For much, much more on North Korea’s dope industry, I refer you to this detailed paper by Lieutenant Commander Cindy Hurst.

This doesn’t mean that North Korea isn’t still producing plenty of meth and heroin, although most of the industry seems to have turned pro. As I’ve described here in more detail, the collapse of North Korea’s economy left a number of scientists and chemists with all the knowledge needed to set up their own meth labs and with no other means to survive. Despite North Korea’s poverty, there’s a demand for drugs to stave off hunger and dreariness, and as a substitute for medically appropriate medicines that aren’t widely available. As a result, the city of Hamhung in particular has a severe problem with methamphetamine addiction. The latest from Open News is that students are turning to selling dope (and in some cases, their diplomas) to survive:

North Korean university students have the burden of paying for living expenses and other financial sacrifices requested by the university. In the case of university students in downtown Haesan last year, it has been estimated that the average amount money spent a year is about 18,000-20,000 yuan, which is equivalent to 900,000-1,000,000 won in North Korean currency before the currency reform. Moreover, the students who are in the final semester need to pay a bribe for graduation. The graduation payment is about 6,000-8,000 yuan (about 300,000-400,000 won before currency reform). The source has stated that the reason why the students need to pay bribes even though the North Korean society provides a free education is because bribing is prevalent within the schools. This is why that the North Korean university students have no choice but to be involved in criminal acts such as drug trafficking and selling their diploma.

The source further explained about students who are selling their diploma which they have gained with a great amount of effort. According to him, the trend of selling diploma has become popular among the students who have finished their military service, have left their family in suburban areas, or have a low living standards. The portion of such students is approximately 1-2 per class. Also, it is possible for them to change their pictures and names before putting them on the transaction market by contacting the managerial staffs at school. The universities are indeed supporting the diploma selling by condoning it.

Such diplomas are being sold to the people who are rich and want to gain social success. It is because graduating from university is one of the factors that can contribute to gaining success in the society. Also, the price of the diploma, in the case of a diploma from the School of Education, is worth about 300,000 won (before the currency reform).

The source estimated that it was around the mid-1990s when North Korean students have faced such a difficult situations. Although such situations have declined during the late 1990s, it has restarted since the early 2000 before the recent currency reform. Also, it has dramatically increased ever since the currency reform. Furthermore, the source has added that this trend that is not only confined to Heasan, Yangkang Province but is prevalent in other parts of North Korea. [Open News, Mi-Ok Kim]