SCG-FINAL-FINAL

CHAPTER 343ILLICIT ACTIVITY IN NORTH KOREA’SECONOMY SINCE 2005I. IntroductionChapter Three provides an analysis of of North Korea’s currenteconomic activity. Chapter Two documented a shift that took place in theearly 1990s, where North Korea moved from a state-operated network inwhich its diplomats and officials had primary responsibility for trafficking,to a second phase in which North Korea concentrated on productionof illicit goods on a large scale while outsourcing distribution to organizedcrime. Chapter Three analyzes the development of these activities sincethe mid-2000s, and discusses their current role as a source of income forthe North Korean regime.This chapter begins its analysis in the mid-2000s because aroundthat time, North Korean regime involvement in illicit activities appearsto have undergone another shift, after which a new, “third phase” of thecountry’s relationship with these activities emerged. These conclusionshave been corroborated by a number of scholars including Andrei Lankov,Seok-hyang Kim, Minwoo Yun, Eunyoung Kim, and Justin Hastings. 93Multiple factors could have contributed to this development. Theseinclude broader changes to the North Korean economy (discussed inSection I below). They also include pressure applied to illicit activities bythe United States government and the international community. In 2005, anumber of operations targeted North Korea’s ability to earn income from93 Minwoo Yun and Eunyoung Kim, “Evolution of North Korean Drug Trafficking: StateControl to Private Participation,” North Korean Review, 6:2 (2010); Andrei Lankov and Seok-hyangKim, “A New Face of North Korean Drug Use: Upsurge in Methamphetamine Abuse Across theNorthern Areas of North Korea,” North Korea Review, 9:1 (Spring 2013); Justin Hastings, “The EconomicGeography of North Korean Drug Trafficking Networks,” Review of International PoliticalEconomy, forthcoming.Sheena Chestnut Greitens