North Korea

North Korean officials stash foreign currencies at home, defectors say

North Korean officials routinely stash large amounts of foreign currencies such as US dollars in their homes, say high-profile defectors

PUBLISHED : Wednesday, 29 August, 2012, 12:00am
UPDATED : Wednesday, 29 August, 2012, 2:55am

Two high-profile North Korean defectors working for South Korea's spy agency have revealed how regime officials routinely stashed huge sums of foreign currency in their homes.

Both men are analysts at the Institute for National Security Strategy, an affiliate of South Korea's National Intelligence Service.

They said Kim Jong-un, who took power after his father Kim Jong-il's death in December, appears to be trying to take control of various foreign-exchange schemes controlled by the party and army as he seeks to boost the nation's ailing economy.

In recent months Kim experimented with agricultural and economic reforms after he and his powerful uncle purged the Stalinist state's top general for opposing change.

One of the defectors, who did not want to be named, said that since the 1990s, high-level officials with links to economic bureaus have been hoarding foreign currencies - even as millions of people starved to death due to famine.

"Party officials have been keeping massive sums of dollars close to hand - US$500,000 to US$1 million in their homes," he said.

It is unclear whether the practise has continued since Kim took power and if his reforms include tackling high-level corruption.

Foreign reporters, briefed yesterday by the two men in a secure complex in a woodland south of Seoul, were told they could not disclose the location.

The other defector, Goh Young-hwan, said the number of North Korean defectors had fallen since Kim Jong-il's death. That could be due to the new leader's promise to improve the economy, he said.

"This has raised expectations of a better future," Goh said.

Another key reason is a new policy enacted on the previously porous border with China that gives guards greater incentives to capture defectors.

"In the past, if North Koreans wanted to cross the river, they gave money to guards," Goh said.

"Now the regime says to the guards, 'Take the money - we will not punish you - but get [the defectors] and we will give you credit'."

Although Kim Jong-un seems to be more open and less warlike than his father, there is no fundamental change in his policy towards South Korea.

Inter-Korean Yellow Sea naval clashes flared in 1999 and 2002. In 2010, North Korea sank a South Korean ship and shelled an island. Earlier attacks include a special forces assault of the presidential residence in 1968; a bombing of the cabinet in 1980 and the bombing of a Korean Air flight in 1987.

A museum at the National Intelligence Service desplays exhibits captured from North Korean agents, including a female agent's suicide poison disguised as a phial of perfume, underwater infiltration apparatus used by naval commandos and poisoned-tipped knives disguised as pens.

A poster is emblazoned with the NIS hotline, "111", for reporting spies. Another, showing a phone camera snapping a person on a train, warns that agents look like everyday people, and offers a reward for information leading to the capture of enemies.

Additional reporting by Reuters