North Korea's Underground Illegal Economy

The Black Economy of North Korea

First Published Date: November 23, 2011 ADawnJournal.com

Like many other 3rd world countries, but on a larger scale, North Korean elites live a life of luxury accompanied by imported luxury goods such as luxury cars, yachts, the latest digital electronics, fine wines, expensive shoes, and so on. However, the country has difficulty feeding its general population. Its deteriorating rationing system can only feed about 4 million North Koreans. The other 20 million rely on the black market economy. Also, the government elites need the black market or illegal economic activities to generate foreign currency to support their lifestyle. It’s a situation where both groups benefit. For one group, it is essential to buy food in order to survive; for the other group, it is essential to buy their luxury goods.

According to an estimate, the North Korean regime has spent US$ 1.04 billion or possibly more since 2008 to import luxury goods from foreign countries. To buy these goods, North Korea needs foreign currency. However, its own currency can’t be converted to foreign currency, as North Korean currency is worthless outside North Korea. So, where does Kim Jong II get U.S. dollars to fund his regime?

The country does not have a manufacturing sector to manufacture anything that can be sold outside to get foreign currency. There are hundreds of abandoned manufacturing factories all over North Korea with broken glass or windows; they look like ghost factories. North Korea uses thousands of acres of land to grow opium and use these about-to-collapse factories to manufacture narcotics at night on state level. Then the North Korean government uses government-backed drug dealers to transport it to China. In North Korea, the government uses its law-enforcement agencies to crack down on small non-government drug dealers so government drug dealers can mind their business without any interruptions and provide dollars to the regime.

Although there is nothing being manufactured in North Korea, the government is very good at manufacturing illegal weapons. The government uses its military and other departments to manufacture a wide array of weapons ranging from rifles to missiles, chemicals and nuclear warheads. These weapons are sold to other rogue regimes, drug dealers, and terrorists across the globe through the black market to earn foreign currency.

North Korea manufactures counterfeit U.S. dollars (supernotes) and sell them in the underground black market (mainly in China across its border) for a 40 to 50 percent discount to get real U.S. dollars. North Korea also manufactures gigantic monuments depicting 3rd world country “glorious” leaders. These monuments cost millions of dollars a piece.

The pain, agony, and suffering of the North Korean population is deplorable. However, its black market economy is booming, and so is the living standard and lifestyle of North Korean elites.