From: d.linen <[EMAIL PROTECTED]>
Drugs, Terror and Dud Bills



AFR World

Drugs, terror and dud bills ...  oh dear, leader Kim

afr.com.au
Sunday, June 18, 2000
By Peter Hartcher


When police in Moscow detained a North Korean found exchanging
illegally large amounts of US currency, they opened his overcoat
to find it stuffed with thousands of crisp, new $US100 bills.
The money turned out to be high-quality counterfeit.

And when he claimed diplomatic immunity, they checked out his
story.  They discovered that he was not just a diplomat but a
senior aide to the North Korean leader himself, Kim Jong Il, the
man known to his people as Dear Leader.

The greenbacks are so good because North Korea's Government spent
$US10 million ($16.5 million) to buy an intaglio printing press
of the same type used by the US Bureau of Engraving and Printing.
They've been called "supernotes".

The Congressional Research Service estimated last year that
Pyongyang was turning out at least $US15 million a year worth of
counterfeit US bills.  They have been seized in at least nine
countries, according to an American crime expert, David Kaplan.

This illustrates several things about North Korea.

First, its increasing desperation.  It once drew crucial economic
and strategic support from Moscow.  But when the Soviet Union
collapsed, Moscow lost interest in sponsoring global communism
and in 1995 failed to renew its security agreement with
Pyongyang.

North Korea was reduced from a client State of Moscow's to a
criminal State trying to pass dud currency in the laneways of its
one-time ally.

And it's not just counterfeiting.  North Korea's Government
exports an entire supermarket of illegal drugs to raise hard
currency.  Japanese Customs found a methamphetamine shipment in
1988 that had a street value of $US170 million - equal to a third
of all legal North Korean exports for the year.

It is sometimes said that the Russian State has been taken over
by mafia interests.  But in North Korea, "the State is the
mafia", according to the former American ambassador to Seoul,
James Lilley.

But even State-organised crime was not enough to compensate for
the absence of a functional economy.  North Korea's people have
been suffering from famine for four years.

China stepped in to keep North Korea from collapsing entirely,
supplying cheap oil, coal and grain.  But China, itself well
advanced in the transformation from a command economy to a market
one, has been increasingly impatient with Pyongyang's obduracy.
China pressed Dear Leader hard to start opening the country to
trade.  Left without any choice, he finally agreed to meet his
counterpart from the south, Kim Dae Jung.

Second, it tells us how closely the Dear Leader supervises his
regime's illegal activities. The office responsible for illicit
exports, Workers Party Bureau 39, was established under the
direct control of Kim Jong Il.

Likewise, he is thought by intelligence agencies in Seoul and
Washington to have been personally involved in organising his
regime's most horrendous acts of terrorism.  These include the
1987 mid-air bombing of Korean Air Lines flight 858 that killed
115 people and the 1983 bombing in Burma of a helicopter carrying
four South Korean cabinet ministers.

So it is truly stunning to see him turn so abruptly from bombs to
bouquets in dealing with South Korea.  The rapprochement between
the two Kims that occurred in Pyongyang this week began with a
handshake, moved on to hand-holding in the back of the official
limousine, and ended with a bear hug.  For two countries that
remain technically at war, this is quite extraordinary.

The summit promises much change.  First, it reduces the risk of
war in one of the world's tinderboxes.  Second, it improves the
chances that the criminal terrorist regime can be brought into
the community of civilised States.  Third, it promises to create
a new wave of economic vigour on the Korean peninsula if North
and South can manage economic integration. South Korea has big,
rich companies that want to build factories in North Korea, where
labour is very cheap and very well trained.

But it also promises to usher in a whole new era of competition
between the great powers. How?  South Korea's former foreign
minister, Han Sung-joo, now a professor at Korea University,
published an essay in Friday's Korea Herald in which he made
three key points. In summary:

One, the rapprochement will probably weaken the position of the
US on the Korean peninsula. This is because Seoul will have
increasing difficulty explaining the need for the US military
bases in South Korea, where Uncle Sam has 37,000 troops.  Their
future must now be in doubt.

Two, it improves China's position.  China orchestrated the
summit: Han says it is "on the centre stage in Korean affairs".
Further, China does not want North Korea, a neighbour, to
collapse.  It wants to keep it as a friendly buffer State.  But
it does not want to keep propping it up either.  If North Korea
can now open itself to trade, it will grow stronger - a buffer
still, but not so much of a drain.

Three, it sends Japan and Russia scrambling for a say in the
evolution of the new reality on the peninsula.  Japan will buy a
place at the table with aid and investment.  And Russia is
sending its President, Vladimir Putin, to Pyongyang next month to
try to recover the friendship.

So if Moscow and the world are now coming to Pyongyang, there
should be less need for Pyongyang to send its officials, crammed
with counterfeit money, drugs and terrorist intent, to Moscow and
the world.

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