Korea: House Of Canards


June 27, 2017: Despite the growing food shortages in North Korea most people manage to cope, often in spite of government efforts to help. Case in point is hungry people quietly turning unused land into private gardens. This is especially useful (or necessary) for people in towns and cities. Allowing “private plots” is common in communist police states where food shortages are the norm. The communist approach to agriculture involves outlawing farmers owning the land they work. But to prevent starvation in rural areas communist officials always find it prudent to look the other way as people supplement their food supply with “family gardens.” This has helped keep the peace in North Korea but now officials have been ordered to seize land used for these family gardens, especially outside towns and cities, so that the government can deal with the need to replenish the tree supply. This reforestation effort is an aftereffect of the mass famine and economic collapse of the 1990s. Since the 1990s illegal tree cutting has become increasingly common in North Korea as people sought fuel with which to survive the cold weather and increasing electric and coal shortages. Satellite photos show the sharp difference between forestation in the north and south. South Korea is the only nation on the planet to have succeeded at artificial reforestation since World War II. Other nations (mainly in the West) have regrown depleted forests but usually as a result of rural populations moving to urban areas over many decades and allowing forests to naturally return to abandoned fields and settlements. But in areas where huge areas have been stripped of trees, that solution can take centuries, not decades, to work. Both Koreas were heavily deforested in the last two centuries but South Korea fixed the problem while in North Korea it got worse. Even North Korea recognizes this and is willing to adopt the techniques South Korea has used and try to replace its depleted northern forests. But the South Korean effort did not do this at the expense of the food supply. In the north the government decided that continued resistance to seizing land used for family gardens is treason and local officials have been ordered to act accordingly. In practice this meant local officials could justify demanding larger bribes to move mandatory (as demanded by the central government) tree planting somewhere else. So when you see whose garden got replaced by new trees you know which family is not doing well in an increasingly competitive North Korea.

One reason for the renewed North Korean emphasis on replacing lost forests is that the northern leadership knows the world is watching. North Korea has no problem staying in the news because the North Koreans have decades of experience giving the media in nations with market economies (now most of the world) what the editors want. Fire off some ballistic missiles regularly (there are plenty of older ones that must either be used or scrapped), schedule outdoor activity around missile and nuclear test sites or plant a lot of trees on long-barren hillsides to ensure that the growing number of photo satellites (commercial and military) will get good pictures. Have the right sort of replies (evasive but threatening) ready for foreign governments asking about the latest “weapons test” or visible activity on long range ballistic missiles or nuclear weapons. Blame foreigners for every internal problem and issue vague threats to all as needed (or randomly, it is unclear how that works).

Meanwhile the government stays ahead of all the sanctions and its own economic incompetence by continuing to tolerate more and more market economy activity. That means GDP slowly increases but most of that additional wealth is obtained by the new donju (entrepreneurs) and the preferred way to spend that new wealth is to get yourself and your family out of North Korea or make preparations for a quick exit if this increasingly corrupt house of canards government suddenly collapses.

Even the hundreds of families at the top of the pyramid are losing people to the people smugglers. These high-caste North Koreans report that there is a sense in the ruling families that the system isn’t working and is doomed. When North Korea was founded in the late 1940s a caste system was created as a way to maintain the survival of the new communist government. The newly established secret police and communist party reported on everyone making it possible to create an official list of every family assigned to one of 51 social classes. From the beginning most (29) of these classes were composed of people considered either hostile to the government or leaning that way. These new lower classes are where most of the new (and often quite wealthy) donu are coming from. Most of the population falls into these 29 social classes, and they are getting increasingly hostile to a government that seems to do nothing but create one disaster after another. Members of higher-caste families are catching on as well and younger members are increasingly abandoning promising careers to flee the country. All that bribe money that makes its way to the higher caste North Koreans doesn’t just go to buy an easier life in North Korea.

The Oil Panic

China has been talking about cutting off fuel supplies for a long time but in 2017 China began reducing shipments more than ever. It began in April, with free market and black market traders were preparing for a Chinese oil embargo that had not officially happened yet. During April the market prince (in North Korea) of oil (paid in Chinese currency) tripled. That rapid price increase has since halted, but the market price of petroleum products in North Korea is still very high. Since March anyone who is able to has been hoarding oil and other petroleum products in the expectation that because North Korea is extremely vulnerable to China halting all oil exports, China will take measures to reduce the supply still further. China is the only source of petroleum for North Korea and China has already cut the tonnage over the last year but is reluctant to halt all shipments. This year China has not only reduced oil shipments but restricted the amount of fuel trucks and other vehicles headed for North Korea can carry. North Korean truck drivers can no longer fill nearly empty fuel tanks before crossing back into North Korea. Chinese border guards have been particularly attentive to attempts to smuggle fuel into North Korea. While on the North Korean side of the border the inspectors are demanding larger bribes from people caught smuggling petroleum products in. With the huge disparity between what oil products sell for in China and North Korea there is money to be made for those willing and able to smuggle the stuff into North Korea. These days the North Korean government quietly encourages this sort of smuggling.

Further reducing the amount of oil getting into North Korea risks triggering the total economic and government collapse there. Despite trying to adapt some oil is necessary to keep the Kim dictatorship going. For example, North Korea has, for over a decade, been converting thousands of trucks to run on coal gas. This sort of thing was popular in Japan and Germany during World War II because of oil shortages but largely disappeared after 1945. In North Korea these coal powered trucks are an increasingly common sight. But coal gas is half as efficient as petroleum fuels, and vehicles using it are slower, have less range and require more maintenance. Thus coal gas is not suitable for most police and military vehicles or combat operations. The sluggish and smoky coal powered trucks remind North Korean that their government is a failure and the enemy of the people. But despite giving the military priority on petroleum products for heating, electricity (often local generators) and heating there is not enough. The ballistic missile and nuclear programs have a higher priority and the average North Korean has no official priority at all. But if you have cash some temporary priority can be obtained.

Always Look On The Bright Side Of Death

China continues to go through the motions of enforcing the sanctions on North Korea. In effect China makes it a crime on their side of the border to export a growing list of goods to North Korea. Couple that with the increasing anti-corruption efforts in China and border security personnel in both countries note that this is a situation where boldness can make to rich. This is less of a problem in China, where living standards have grown rapidly since the free market economic reforms of the 1980s. For Chinese corruption is a problem but in North Korea corruption is often a matter of life or death but for those collecting the bribes it is way to get out alive. By amassing enough money to bribe your way out of the country you and members of your family get to live. With the corruption spreading throughout the North Korean security services there is hardly anything you cannot bribe your way out of or past. But for most North Koreans the heavier use of bribes means that the cost of everything goes up. More police and security personnel now see it as a fringe benefit of their job to demand bribes whenever they can. So they do.

What the government wants to avoid most is any evidence of another massive decline in population due to starvation as occurred in the 1990s. So the people must be fed enough to avoid that. Local officials who cannot get that done are replaced. The North Korean bureaucracy has become a very competitive organization. Meanwhile the corruption at the border (both sides) and the need for essential (food, medical, and so on) items to get into North Korea provides ample opportunities for North Korea to continue its smuggling operations. A total blockade of the border would give the North Korean government an excuse to blame foreigners for the resulting starvation deaths and other privations among the general population. As communist police states have demonstrated for the last century, the government can keep itself running for years under those conditions. Russia did this during the 1920s, China in the early 1960s and North Korea in the 1990s.

WannaCry For More Cash

Early on most Internet security experts suspected North Korea was the source of WannaCry ransomware outbreak in May 2017. Internet security firms and intel agencies, after scrutinizing WannaCry in detail, saw that it was probably the work of North Korean hackers. These North Korean hackers, the only ones allowed to attack worldwide, was nicknamed Hidden Cobra and has been active since 2009. These hackers are mainly for making money, not espionage or Cyber War. The WannaCry outbreak was apparently a test that got out of hand. That happens in this business. What North Korea prefers is for Hidden Cobra to stay out of the headlines and concentrate on obtaining desperately needed foreign currency for North Korea, as well as finding more secure ways to move North Korea cash around the world. The U.S. has become more effective at blocking North Korean access to the international banking system and Hidden Cobra has been noted as very interested in that aspect of hacking. But mainly it is about raising money and quietly moving it. This is even more urgent now that China is cooperating more with the West and shutting down North Korean access to the Chinese banking system (which is largely state controlled and under a lot of scrutiny for corruption and poor performance). This comes at the same time that Japan, long somewhat lax towards how trading companies did business, recently announced new laws that made it more difficult for Japanese firms to sell or even be involved in transporting goods to North Korea that might be used for weapons construction, manufacture or development. That means a lot of “dual use” items can no longer be sold to North Korea or any other nation or firm known to be providing such goods to North Korea. All these restrictions and bans don’t cut North Korea off but does make it more expensive and time consuming to get forbidden items. Thus the North Korean need for more foreign currency because that’s the only payment smugglers will take and it is often payment in advance.


Despite ending four decades of generous economic aid to North Korea in 1991 (and triggering a famine that killed up to ten percent of the North Korean population) Russia has now become the only friend North Korea has in the world and is willing to do business with them. This annoys China, another Russian frenemy that is currently a “close ally” of Russia. But both North Korea and Russia are having economic problems and neither is willing to pass up an opportunity to help each other out. China is now the major economic and military power in the area and Russia cannot replace China as a supplier of essential goods to North Korea. Russia has not got the goods in many cases and its rail and road links to North Korea have wasted away since the 1980s while those between China and North Korea have grown. But Russia and North Korea can pretend and China is willing to tolerate that.

June 23, 2017: In South Korea newly elected president Moon witnessed another successful test of a locally made ballistic missile with a range of 800 kilometers. Moon backs the missile program, which had a successful test in April and after two more such tests will be ready to enter service and mass production. The new missile carries a half ton warhead and has no official name yet. This missile enables South Korea to hit targets anywhere in North Korea with weapons (ballistic missiles) that North Korea is not equipped to stop. A similar test in 2015 involved a ballistic missile with a range of 500 kilometers that came to be known as the Hyunmoo 2C. That test ended decades of restrictions (at the behest of the United States) on South Korean ballistic missile development. South Korea has never released much information on how many of its ballistic or cruise missiles it has but has at times indicated that they are aimed at North Korean targets. These South Korea missiles can be launched from anywhere in South Korea and hit any area in North Korea. Apparently North Korean leader Kim Jong Un and his various underground headquarters are prime targets. Unlike North Korea, which has chemical weapons and, eventually, nuclear bombs for its warheads, South Korea is restricted to conventional explosives. But even with this such missiles can do considerable damage to underground facilities and major above ground facilities.

June 19, 2017: An American tourist (Otto Warmbier) died after being released from North Korean imprisonment because he had been in a coma for over a year. His family did not allow an autopsy but doctors who examined the comatose Warmbier soon after his return to the United States on June 13th concluded that he had apparently suffered a stroke or heart attack at least a year ago and had been in a coma ever since. North Korea could provide no satisfactory explanation about what happened to Warmbier, who had been convicted in March 2016 of “hostile acts” against North Korea two months after his arrest at the end of a five day visit (arranged by a Chinese company). Warmbier was accused of trying to steal a propaganda poster from the hotel he was staying in and sentenced to 15 years in prison. North Korea then sought to extort cash or other favors from the United States for his release, never indicating that the prisoner was in a coma.

Since Kim Jong Un took over in 2011 he has spent over $400 million on new tourist attractions like a ski resort, a water park and horseback riding facilities. North Korea has two gambling casinos that mainly cater to Chinese. Most tourists come from China and popular Chinese vices are discreetly catered to. By 2014 North Korea was attracting about 250,000 tourists a year and was advertising more frequently in China because that’s where many tourists come from and where most of the new ones would come from as well. Western tourists spend more money, but there are far fewer of them and they require more security because, unlike the Chinese, the Westerners don’t know how to behave properly in a police state.

There was a 37 percent decline (to 3,851) in tourist visits to North Korea during 2014. While few in numbers the North Korean government gets a lot of foreign cash (about $2,000 per person) out of these visitors and foreign currency is one thing that is always in short supply. That’s especially true when you consider that the North Korean GDP is only about $35 billion. The tourists stopped coming because of bad behavior and greed on the part of North Korea. Despite saying they welcome foreign tourists, North Korea will occasionally kill or arrest one or add new fees and restrictions without warning. This is especially true of Westerners in general and Americans and Canadians in particular. Currently North Korea is still holding two U.S. and one Canadian citizens and demanding “compensation” for the trouble these visitors caused.

June 15, 2017: A North Korean warship seized a Russian yacht that was 80 kilometers off the coast. The yacht and the vessel towing it to Vladivostok were definitely in international waters and the Russian ambassador has demanded the release of the yacht and three man crew. This is similar to a May 2016 incident where North Korean warship seized a Russian sailing yacht some 160 kilometers from the east coast of North Korea (very much in international waters). The yacht and crew of five were taken to a North Korean port. The yacht was released two days later and continued on its way to its original destination (Vladivostok) for a sailboat race. North Korea would not say why they took the yacht and then released it.

Further down the peninsula South Korean aircraft and warships began two days of training around the Liancourt Rocks in the Sea of Japan. South Korea currently controls these tiny unoccupied islands which Koreans (north and south) call Dokdo but the Japanese call Takeshima. Both Koreas and Japan claim ownership. The South Korea training exercise was described as all about defending Dokdo from foreign aggression. American efforts to get South Korea and Japan to tone down the political tensions over who owns Dokdo Island have failed despite years of effort. At one point the U.S. suggested that Japan cede to South Korean claims on Dokdo. But the worthless outcroppings are an emotional issue that makes rational solutions very difficult to implement. South Korea has long been willing to sacrifice good relations with Japan over the issue of who owns the uninhabited Dokdo “Islands” in the waters between Japan and Korea. There are two large rocks permanently above water and 35 smaller ones (and about 50 that are seen only at low tide). What is really going on here is continued Korean resentment of Japanese colonial occupation and centuries of Japanese aggression towards Korea. Both countries have been sending more air naval reconnaissance missions to the rocky outcroppings, and the mass media in both countries have been jumping all over the tension. Japanese politicians would take an enormous domestic political hit if they managed to get the votes in their parliament to give South Korea Dokdo. The dispute over what the rest of the world considers a navigation hazard has been a recurring source of bad feelings between the two countries. This dispute is an enormous benefit to North Korea as it prevents South Korea and Japan to cooperate closely on keeping an eye on North Korea. Yet in the end North Korea declares it also has a claim on what foreigners call Liancourt Rocks and warn ships to avoid.

June 13, 2017: South Korea revealed that it had recently found and examined a North Korean UAV that had crash landed near the DMZ in early May. Since the UAV came down in a remote area it was not found for weeks. When it was discovered South Korean intel experts knew what to do. The miniature aircraft carried flight control software similar to that found in small commercial UAVs, as well as a commercial digital camera containing 551 photos taken during a May 5th flight that began about 30 kilometers north of the DMZ and had the UAV travel low and slow some 230 kilometers into South Korea where it took photos of the new THAAD anti-missile battery recently established there. Then, under computer control and using GPS the UAV turned around and headed back for North Korea. For reasons not revealed it crash landed just south of the DMZ. South Korean radar has spotted some of these clandestine UAVs and one was fired on earlier in 2017 but apparently not hit.

This is similar to what happened in 2014 when South Korea obtained its first physical evidence of North Korean UAVs operating south of the DMZ. In April 2014 it had been discovered that two of the three North Korean UAVs found in South Korea over the previous five months were from a Chinese manufacturer (Taiyuan Navigation Technology). Two of the crashed North Korean UAVs were identical to the SKY-09P UAV offered for sale in China. North Korea modified the SKY-09P with a new paint job (to make it harder to spot), a muffler (to make it less detectable) and installed a different camera. The SKY-09P was used via its robotic mode, where the SKY-09P flew to pre-programmed GPS coordinates, taking digital photos over selected areas. The SKY-09P is a 12 kg (26 pound) delta wing aircraft with a wingspan of 1.92 meters (6.25 feet), a propeller in the front and a payload of three kg (6.6 pounds). It is launched via a catapult and lands via a parachute. Endurance is 90 minutes and cruising speed is 90 kilometers an hour. North Korea has built some small UAVs of its own, using Chinese commercial UAVs as models. No military secrets are involved, just copying what can be bought openly in China (and many other parts of the world).

June 9, 2017: The newly elected South Korean government made it clear that there would be no major changes regarding North Korea and current defense arrangements. A large minority of South Koreans oppose “strong measures” (more defense spending, anti-missile missiles) to deal with North Korea. That group supported the newly elected reform president. But the main reform people wanted was progress on reducing corruption, not measures to defend South Korea from North Korean aggression. The majority of South Korean voters no longer support playing nice with the north and ignoring the evil things that are taking place up there.

June 8, 2017: North Korea test fired what it described as a new cruise missile it called the Kumsong-3. It was obvious (from the pictures) that the missile was an old model that had been seen before but that the mobile launcher (on tracks, carrying four missiles in canisters) was new. The missile being used is a Russian Kh-35 anti-ship missile. Russia denies it sold the missiles to North Korea thus the only other likely source is Burma, which has been conducting an illegal (and always denied) arms trade with North Korea for over a decade. The Kh-35 is similar to the American Harpoon but lighter (610 kg/1,340 pounds, compared to 728 kg/1,600) and has less range (130 kilometers compared to 224 for the latest version of Harpoon). The Kh-35 (also known as the SS-N-25 or Switchblade) can be fired from helicopters, aircraft, ships, or shore batteries, which can be fixed or mobile.

June 2, 2017: The UN approved new sanctions on North Korea which included sanctions against organizations and individuals connected with ballistic missile and nuclear weapons programs. China will apparently go along with these new sanctions.


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