North Korean House of Cards

leadership dynamics inside North Korea, gift-giving presentations during guidance
inspections precipitously declined towards the end of 2012 and throughout 2013,
increasingly replaced by verbal expressions of gratitude by Kim Jong-un. 460 While the
Royal Economy continues to make up nearly sixty percent of the overall North Korean
economy, it is becoming increasingly questionable whether, in an era of declining
foreign funds, Kim Jong-un can effectively conduct the politics of consolidation.
b. Sources of Funding
The Royal Economy sits on a web of different funding streams coming from
both inside and outside the regime to the offices of the Supreme Leader. In other
words, Kim Jong-un draws not only on money that comes from overseas through
the elaborate mechanisms outlined above, but also through internal funds siphoned
from various parts of the regime. According to numerous sources, the broad
contours of this architecture have not changed much since the 1970s.
At the heart of Kim Jong-un’s finances are the “revolutionary funds” that
were left to him in Kim Jong-il’s last will and testament. The total amount is
unknown but is rumored to be around $4-5 billion. The fund is supplemented on
a yearly basis through a variety of collection schemes. These procurement schemes
can be broken down into three parts: Revolutionary Funds; Loyalty Funds; and the
People’s Economy. 461
“Revolutionary funds” are those funds directly controlled and managed by
the Supreme Leader’s offices, including revenue generated by Office 38. The annual
amount of funds generated is not known but is rumored to be roughly several
hundred million dollars. 462
• Samcheolli Depository, mentioned in Kim Jong-il’s will, refers to
funds generated from North Korean labor and social organizations.
The memberships of these organizations, which number in the
millions, pay annual dues, a portion of which goes to the “revolutionary
funds.” This Depository is located in Kim Jong-un’s Personal
Secretariat and is rumored to be managed by Kim Jeong.
460 Interviews in Seoul in 2014. Also see Kim Sun-chol’s comments for a NHK special on the
DPRK’s Secret Fund, which aired in April 2014.
461 The description of these funding streams and the amounts associated with them are highly
speculative and based on interviews with several sources during the author’s trips to Seoul in 2013 and 2014.
462 According to some sources, the Revolutionary Funds could account for $1-2 billion.
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