[imText1]What most people can find out about Kim Jong Il’s slush fund is extremely limited. It may be due to the secretive “palace economy” that raises funds for the Party and created a campaign called “Loyal Foreign Currency Earnings” for the common people. Rooms no.38 and no.39 of the Central Party Building are responsible for professionally securing Kim Jong Il’s slush fund. The fund of the Party is not included as the part of the National Economic Plan or even the national budget. The amount of this slush fund is incomparable to the National Economic Plan which the Minister of the Cabinet, which is like the position of a prime minister, is in charge of.
“Loyal Foreign Currency Earnings”
There are three economies maintained in North Korea. One is the National Economy, also known as the People’s Economy, which the ministry takes a charge of.
Another economy is administered by the Munitions Industry Committee and the last one is called the Palace Economy, or The Party Economy, which is maintained by the Central Party. The foreign currency of the Palace Economy, which is gathered to be used as funds for the Party, is used partly for the living expenses of the executives of the Central Party, while the rest is used for the idolization of Kim Il Sung and Kim Jong Il or flows directly into the personal account of Kim Jong Il.
The importance of the three North Korean economies are as follows: the Palace economy, the Munitions economy, and the People’s economy. The People’s Economy is only a supplementary tool used to maintain the Party Economy and the Munitions Economy. Even the third economy is often interfered with by Kim Jong Il; therefore. in reality, the Minister has nothing more than a name as he is unable to even hold a conference with foreign countries using more than a couple of tens of thousand dollars. The People’s Economy, which is at the bottom of the North Korea Economy, is extorted to please the Party and the Military.
In the midst of such difficult economic conditions, only the factories which provide the funds for the Party, such as the Sangwon Cement Factory, are operating well, while factories affiliatated with the ministry closed down long ago. All the gold mines in North Korea are the enterprises of the Party and are controlled by those from Room No.39, which raises the funds strictly for the Party. Other Party controlled entities include the Sinchang gold mine in Pyeongan-do and the Chunma gold mine in Pyeongbuk-do. The well-known gold mines produce more than 5 tons of gold annually.
Exploitation through “Loyal Foreign Currency Earnings”
The departments that raise funds for the Party are Room 38 and 39 of the Finance and Accounting Department of the Central Party. They have their own line connected to the Local Party and plunder valuables, such as gold, song-i mushrooms, sea urchins, shellfish, etc., and other special products of local regions extensively. At the same time, they operate Managing Department No.5 and the Foreign Currency Business Center of the People.
The Worker’s Party allows for 1.5g of gold and dog leather as an annual personal assignment for workers. The pretext for the requirement is the ‘fealty foreign currency earning’ campaign. People must “pay” the government the required amount because the money earned from their assignment will be used “to buy school supplies and presents for the children that will be distributed on the Kims’ birthdays.”
Once a command comes down from the Central Party, the department secretaries of the local party offices force those who were not able to pay gold daily by threatening them with verbal abuse and labeling them as “the people lacking loyalty.”
No Excuse for Trading Gold
The personal trade of gold is prohibited in North Korea. The personal possession of gold runs the risk of it going somewhere else other than Kim Jong Il’s pocket, so it is prohibited by the Criminal Code of North Korea. When evidence is found of one who has traded gold with a foreigner, he is sentenced to execution by shooting and is labeled as a traitor.
In the summer of 1987, by the river in the local village where I lived, there was a public execution because of a gold trade. The executed individual was charged with trading 300g of gold. He was a materials trader, a person who brings materials into North Korea. He was capable in trade and he was loved by others as “the fortune bag,” who brought in domestic materials and imported materials.
The factory workers who had good relationships with this man, who was seen as a genuine, capable person, visited the National Security Department to save the man’s life. The security officials calmed the workers down by saying, “although his crime is grave, he may be forgiven.” However, notices were posted suddenly on the streets announcing the execution and officials dragged him out and executed him promptly. Since public executions rarely take place, as in once or twice a year, thousands of people went to watch.
The main purpose of holding public executions is to indoctrinate fear into the people, especially those who trade gold in the black markets, and to show they will receive severe punishments for their crimes. In short, ‘people who have an eye upon the pocket of the General will be executed without excuse.’
How is it possible to call Kim Jong Il, who deceives the North Korean People to fill his pocket while living in luxury all kinds of delicacies and indulging meals, each one costing thousands of dollars, as the Dear Leader of the people?
