The North Korean cash connection

ONE of the basic principles of Kim Il-sung's 46-year reign over North Korea was juche or self-reliance. It meant the Hermit Kingdom had to provide and pool its own resources to manage its own economy.

As a result, everyone under the Great Leader's cast-iron Stalinist rule was forced to work in virtual slavery to fulfil directives from Pyongyang, which in turn was adhering to communist propaganda from Moscow.

For the first 30 or 40 years of Kim's dictatorship everything went according to plan, but in the early 1980s, basic flaws emerged in the system run by the 20th century's longest-serving despot.

The backward economy, food shortages and poor harvests, coupled with continued isolation from the West and reduced support from China and the Soviet Union, forced Pyongyang to find other means to earn cash.

So it started on a policy of state-sponsored smuggling and crime. Ever since, and especially in the last few years, North Korean diplomats have become involved in drug trafficking, gun running and the smuggling of rhino horns, elephant tusks and by-products of other endangered species.

Just last month, Pyongyang officials working in Macau were arrested for alleged involvement in a counterfeit cash scam involving millions of dollars.

Western experts see Pyongyang's latest moves as a means to circumvent the threat of US-instigated trade sanctions which were to be used in a last-ditch effort to get Kim to allow international inspections of his nuclear programme. Now the North's illegal money-making ventures are gradually being exposed by defectors, criminals and intelligence and investigating agencies.