They traffic heroin, opium and methamphetamines, sell arms and rent out highly trained thugs. They counterfeit cash and hawk ivory and other endangered-animal products on the black market. Their top boss favors dark sunglasses and has a taste for deadly weaponry. A Mafia crime family? Hardly. We're talking about North Korea. The rogue regime long ago ran short of legitimate stuff to sell, so it gets by instead with a range of dodgy trades.
Exporting speed to drug addicts in Tokyo is sleazy. But selling missile technology, which Pyongyang already does, or plutonium, which it may soon be able to do, is called proliferation—and that has become a major worry as the world tries to assess the precise nature of the threat posed by North Korea. Two weeks ago, the Vienna-based International Atomic Energy Agency (IAEA) told the U.N. Security Council that Pyongyang had violated its international commitments by revving up its nuclear weapons program. The Security Council could ultimately order sanctions both to punish Kim and to prevent the proliferation of nuclear material and missiles.
Economically weak already, North Korea would be unusually vulnerable to sanctions. But Pyongyang fully recognizes that vulnerability, and has already said it would consider sanctions to be a declaration of war—scary rhetoric from a country with a million-strong army. Sanctions therefore could be hazardous, but so, too, is allowing Kim to produce enough plutonium to make several atom bombs over the next few months. Starved of cash, North Korea could conceivably earn a lot of green by trading some of its nuclear wares to another rogue state or even a terrorist group such as al-Qaeda. "The North Korean regime is willing to sell anything that makes money," warns a former high-ranking North Korean official who defected to South Korea. "If they could produce enough plutonium and uranium to sell, there is absolutely no doubt they would do it."
The North Koreans certainly don't have a record of self-restraint. Ballistic missiles are its top foreign-exchange earner; according to U.S. government estimates, that trade pulls in between $150 million and $300 million a year—a tidy sum, given that the country's legitimate exports amount to about $600 million. No country sells more missiles; Egypt, Iran, Libya, Syria, Yemen and possibly Iraq have all been customers. And the North is willing to sell its know-how, too. Pakistan's Ghauri missile, which gave Islamabad the capability to fire a nuke at India, is based on North Korea's Nodong missile. An analyst estimates that North Korean help has given these states a five- to 10-year technological jump.
The country's other revenue sources, though, are shriveling. Income from North Korean-owned business ventures in Japan (including pachinko parlors) has plunged, according to Japanese intelligence and media reports—a casualty of Japan's economic woes and disenchantment with Pyongyang among the country's North Korean community. Arms dealing was once lucrative but North Korean guns are now too outdated to fetch steep prices. Drug shipments to Japan, South Korea and Taiwan—sometimes smuggled through customs by North Korean diplomats—still earn the country more than $100 million a year, says Marcus Noland, a North Korea economy expert at the Institute for International Economics in Washington, D.C. But a police crackdown in Japan has hurt that business.
Not surprisingly, Kim's diplomatic initiatives tend to be driven by financial desperation. In 1994 he cozied up to Seoul, Washington and Tokyo, and secured a windfall of foreign aid in return. But Kim isn't playing Mr. Nice Guy anymore—and since he kicked out IAEA inspectors last December, he can do what he likes with his nuclear material. Selling to terrorist groups—a risk cited by U.S. Deputy Secretary of State Richard Armitage in testimony to the Senate Foreign Relations Committee earlier this month—would invite instant retribution from America. More likely, Kim could offer plutonium to a state trying to acquire nuclear weapons in return for cash or bomb technology he needs. Says Peter Hayes, director of the Nautilus Institute, a California-based think tank: "That's definitely something we should not allow to happen."
Meanwhile, in the absence of foreign inspectors, Kim has announced that he is reactivating a nuclear reactor he shuttered in 1994, and he could also move to finish the two uncompleted nuclear reactors that were closed that year. Completion of the process would take several years, but the cia estimates that he could eventually use them to churn out 281 kilograms of plutonium a year. That would be more than enough for home use—with plenty left over for sale abroad.
—With reporting by Perry Bacon Jr./Washington, Hiroko Tashiro/Tokyo and Kim Yooseung/Seoul
