Illicit Trade and International Relations

The debate of whether bilateral (licit) trade increases or reduces the risk of conflict between two countries is ongoing, but the ‘yeas’ have it for now. But what about illicit trade?

Sheena Chestnut Greitens, a doctoral candidate at Harvard, discussed this last weekend in the context of North Korea. She has this advice for an aspiring kingpin:

First, find the money. Kim Jong-un seems to have done that. One of the last photos released of Kim Jong-il shows him riding a supermarket escalator. Behind him are Kim Jong-un and Jon Il-chun, manager of the infamous Bureau 39.

Second, control the people who earn the money. Illicit activity brings the risk of freelancing, especially when you’re forced to let others do the distribution. As North Korea outsourced the drug trade, its profit margins dropped — and more and more insiders skimmed off the system to line their pockets. Today, reports indicate that methamphetamine is widely used in North Korea (partly because it dulls hunger pains), and the state is cracking down on the trade it once monopolized. Even Kim Jong-il couldn’t maintain perfect control and had to send operatives abroad to retrieve misbehaving agents. These are delicate tasks easily botched by a novice.

Finally, keep the money coming. Criminal activity was never North Korea’s ultimate objective; the aim was always hard currency. Kim Jong-un needs cash without political conditions to stay in power. But there aren’t many good options for getting it these days, which is why North Korea is likely to pursue new and expanded forms of illicit activity.

Further reading: the SINO-NK blog has a good follow-up here.