Many of the tourists who visit North Korea
every year are aware that upmarket restaurants and shops operating in Pyongyang
and other major cities will readily accept foreign currency. What may be less obvious
to outsiders is that these businesses are set up to collect foreign cash from
diplomats, tourists, and the local donjuLiterally "masters of money," donju refers to people who hav... More [the newly affluent middle class], but
they essentially channel profits directly into the leadership’s slush funds.
When North Korean citizens return home from
overseas missions or business trips, they are quickly inundated with a deluge
of phone calls from cadres further up the ladder, who invariably request to be
taken out for a ‘special meal’. These meals are commonly priced at between 700
to 1,000 USD per person at these foreign-currency restaurants. Some cadres are
even pressured to buy wine for the table, with prices at Pyongyang’s famous
‘Okryu-gwan’ restaurant fetching anywhere from 3,000 to 5,000 USD for a single
bottle.
Such requests are part of an organized
system of fundraising for the regime. In a typical case, several higher-ranking
officials will call in, and apprehensive of turning down an invitation, a
subordinate will end up biting the bullet and spending whatever supply of
remaining foreign currency they have. In the early 2010s, the word amongst
North Korean cadres was that a trip back home from overseas will cost you at
least “30,000 USD in restaurant meals alone.”
Goods such as shoes from Italy, perfume
from France, pianos and electronics from Japan, and food products from Europe
are frequently demanded by high-ranking officials to cadres dispatched
overseas. Higher-ranking cadres will say something along the lines of, “I
worked hard to get you overseas. Don’t I get something for it?’ implying that
failure to meet the extravagant requests will lead to termination of any future
overseas posting, together with the accompanying perks.
In addition, the sums of money secured by
shops that accept foreign currency such as the Daesong, Rakwon, and Kwangbok
department stores is far from insignificant. This is because the culture of
paying bribes to senior cadres in the form of high-end luxury goods has become
ubiquitous.
This kind of pressure is prevalent across
North Korea’s intricate power apparatus. Keeping those at the highest ranks of
the Organization and Guidance Department [OGD] happy, or in other words. plying
them with bribes and gifts, is imperative for those who are lower in the food
chain to maintain their positions.
This practice effectively drains overseas
cadre clean of their foreign currency upon their return, with the funds secured
by these restaurants and shops channeled into the bank accounts of the Party’s
Office 39. This occurs because all top-tier trade companies, as well as the
services and tourism departments are operated as a monopoly, under the control
of Office 39.
With the fundamental importance of these
methods in securing cash for their slush fund, the Kim family has been
merciless toward those that do not adhere to what’s considered the norm. In
2010, a senior official from the Ministry of Railways was caught with a 300,000
USD stash in his house, which promptly led to his execution. Ostensibly, it was
for hindering the Party’s economic policies and causing losses, but in
actuality it was the price he paid for holding onto such massive amounts of
foreign capital rather than spending it in ways that would end up in the hands
of the regime.
For this reason, North Korea’s diplomats
have little choice but to take advantage of their diplomatic status and smuggle
drugs, gold, and electronics, and expensive alcohol while posted overseas
in order to satisfy the inevitable demand for bribes upon their return home. In
other words, the leadership is in effect pushing its diplomats to become
involved in illicit activities overseas to ensure that cash continues to stream
into its slush fund.
