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N. Korea Accused of Bolstering Economy with Illegal Drug Sales

North Korea is accused of using cash from drug trafficking to bolster the communist state's weakened economy. A group of nations has made plans to intercept North Korean vessels suspected of carrying illegal drugs or arms.

Last May, a North Korean defector claiming first-hand knowledge of North Korea's drug enterprise testified before the U.S. Congress.

The defector, whose identity was kept secret, said the North Korean government directly oversees the production and export of thousands of kilograms of illegal drugs a year as a way to raise cash. He said that in 1997, the cash-short government ordered all collective farms to set aside 10 hectares for poppy cultivation, and then flew in experts from Thailand to supervise the refining of the poppies into heroin.

The testimony, which appears to be the most authoritative on the subject ever given in public, comes as Washington and its allies discuss how to bring an end to North Korea's nuclear weapons development.

The United States and 10 other nations, including Japan, Australia and Britain, have agreed to intercept North Korean vessels suspected of carrying illicit drugs or arms. The idea is to disrupt Pyongyang's sales of these items, which are believed to be important sources of hard currency for the impoverished state.

North Korea is believed to be using profits from illegal drug sales to compensate for the disintegration of its economy since the early 1990s.

The economy has suffered greatly from loss of trade with its erstwhile communist allies, the former Soviet Union, which collapsed in 1991, and China. Those nations have sought to integrate with the world economy, leaving Stalinist North Korea isolated and impoverished.

Donald Gregg is president of the Korea Society in New York, and a former U.S. ambassador to South Korea and China. He points to a recent State Department report on global narcotics trafficking, which says that North Korean citizens, including diplomatic personnel, have been caught abroad with narcotics.

"The evidence North Korea systematically grows and exports drugs is growing stronger all the time. The Bush administration, which hates the North Korean regime, of course, plays this up to the full. But there have been a number of arrests around the world for years," says Mr. Gregg. "The North Koreans have very little money, and they have had to resort to all kind of nefarious schemes to fund their operations overseas."

Ah-young Kim is a fellow at Pacific Forum CSIS, a research institute in Hawaii that is affiliated with the Center for Strategic and International Studies in Washington. She says North Korea's drug trade has been built up over several decades into a large, well-organized entity.

"It is an easy way to make a lot of money using a minimum amount of resources, and from that, you attain maximum benefits. Another reason is North Korea started to develop its poppy farms in the early 1970s," she says. "So, right now, we are in 2003, and it has already been a 30-plus-year program, which means a lot of knowledge, familiarity and skills, including investment, in this drug-related structure."

This issue made headlines in April, when Australia seized a North Korean vessel and its crewmembers on suspicion of smuggling nearly $200 million worth of heroin. In response to that and reports of North Korean arms trafficking, Japan also tightened customs inspection of North Korean vessels going in and out of Japanese ports.

Pyongyang has staunchly denied any role in narcotics trafficking, but U.S. experts believe exporting drugs is a major function of North Korea's foreign missions. However, U.S. intelligence efforts to pinpoint and photograph North Korean poppy fields have so far been inconclusive.

A recent study by U.S. Forces Korea and South Korea's 21st Century Military Research Institute says North Korea is the world's third-largest opium exporter and sixth-largest heroin exporter, sending out half-a-billion dollars of narcotics a year.

South Korea's National Intelligence Service says the North has attempted to hide its drug business from foreign view by closing poppy farms near national borders. It also believes North Korean prisoners have been mobilized to do the farming.

Ms. Kim of Pacific Forum CSIS says it remains for outside nations to demonstrate a firm link between Pyongyang's drug trafficking and its development of nuclear weapons. "I think this is actually what various nations are trying to figure out - if there is any kind of connection, in terms of, is the money that they earn from drug production being funneled to its nuclear development, or are they using the drug trade route in ships to deliver materials associated with WMD (Weapons of Mass Destruction), or missiles? "

In a recent newspaper commentary, Ms. Kim said that the North's drug network could be used to export other contraband, including plutonium and other elements needed to build nuclear weapons. She wrote that cutting off the flow of drugs - and therefore the flow of cash - might help force Pyongyang into serious talks on the nuclear issue.