The Gangster Confederacy
by Tom Holsinger
January 29, 2003

News reports about North Korea assume little has changed in twenty years, but the world changed and so did North Korea. Loss of Soviet economic aid following the USSR's demise turned the weird old North Korea into a gangster confederacy which uses nuclear weapons to raise hard currency.

North Korea's hallmark secrecy is a leading cause of foreign ignorance, and outright fantasies, concerning its military power and regime stability. Both have eroded to the point where collapse into a Lebanese, perhaps even Somalian, type of failed state could come with little warning - perhaps even this year. That foreign gangsters are moving in proves its police state is dying fast.

How North Korea got here is a useful guide to what is left of its future, and mitigating the worst of its final collapse. This starts with consistent incompetent leadership plus refusal to promote anyone better lest he be a threat. Stalin appointed 36 year-old Red Army veteran Kim Il Sung as North Korea's ruler in 1948 based on loyalty and usefulness to the USSR, not on ability. Kim didn't ruthlessly climb to power a la Saddam Hussein. Stalin wanted someone to impose Communism on North Korea and rule it in Soviet interests, i.e., independent nature or potentially uncontrollable personal competence was dangerous.

Kim Il Sung's "rule" lasted until his death in 1994, with a brief exception during and shortly after the Korean War when China effectively controlled the country. Kim's one known example of political ability occurred immediately after the Chinese left - he regained power against the factions installed by the Chinese and Soviets to sort of rebuild the war-shattered North Korea. Kim and his faction were deemed too incompetent to do that.

At that point his regime began deviating from the Communist norm in a fashion which led to North Korea's imminent collapse. North Korea's peacetime active army was, and is, so large relative to its population that it became the center of political power. The combined Communist Party, labor/prison camp population and active military forces of Stalin's USSR rarely exceeded 10% of its population. Korea's active military forces were rarely, if ever, less than 6-10% of its total population in the 1960's and 1970's. Even today it is 1.1 million of 23 million (4.8%).

Such proportionately large peacetime militaries are terrible economic drains, so governments mitigated that by having troops help with harvests and other labor-intensive tasks. This leads to corruption, though - civilian elites resort to bribing officers to obtain free labor, and worse. China's army went into business big-time after Mao's death, and was only recently dragged away from that by a vastly larger and more powerful Communist Party.

But North Korea's army had no checks on its corruption due to its size - it devoured the state. Kim Il Sung remained as nominal leader until he died because he didn't threaten devolution of power to various army factions (really criminal gangs) which seem to be organized by corps boundaries. Further proof of this lies in the slow transfer of nominal authority to Kim Il Sung's son, the notoriously weak, incompetent placeholder Kim Jong Il, after his father's death, plus the pattern of official drug smuggling - organized by the separate army corps (among others) rather than being entirely centralized through the intelligence apparatus.

The final straw in North Korea's breakdown was cessation of Soviet economic aid in 1992 after the USSR expired. North Korea's economy was a shaky clone of the 1930's "Stalinist railroad" wasteful coal/steel model. Loss of Soviet aid precipitated a collapse of which the famine is just one aspect. Bad weather only contributed - the root cause was titanic mismanagement when it was no longer propped up by Soviet aid.

Things got worse. Years of nationwide famine eliminated an already corrupted military's remaining discipline and effectiveness - the officer corps are just gangsters now. Maintenance was deferred during a collapse which never really stopped, and the "Stalinist railroad" model requires vast inputs just to maintain existing production.

North Korea's transportation infrastructure consists solely of railroads and coastal shipping. Road traffic requires oil but North Korea doesn't produce any, lacks the hard currency to buy more than a little and so relies almost entirely on free Chinese oil. The rail system's continued viability is questionable at this point. Its collapse would be the regime's final end. Millions would starve in a few months given their weakened condition and the absence of stocks, and millions more would flee to the South and China.

North Korea's rail system is also its wartime weakest link. The country is so mountainous that precision-guided bombing of its many unconcealable railroad bridges and tunnels would irrevocably collapse the rail system in less than a month, even if we are then invading Iraq. North Korean attack on the South would be suicidal. Its gangster confederacy knows this even if Western newsmen and not a few military officers have no idea how to run a railroad.

Three things have kept North Korea going since 1994 - food and oil aid from China and the West, and hard currency income from counterfeiting, narcotics traffic and missile sales (ordinary exports are minimal). The hard currency buys goodies for the regime's elites and protective forces, plus crucial economic items.

China's tyrannical oligarchy is deathly afraid of having a border with a free, unified Korea following the North's collapse, especially as millions of ethnic Koreans live on its side of the border, and so gave the North significant food and oil. North Korea extorted more from the West using the 1994 nuclear crisis, but that recently ended upon discovery that it had violated the deal by secretly continuing its nuclear weapons program.

But some of the North's tiny food stocks are now being sold for hard currency though renewed famine is imminent, and the regime recently ordered civilians to exchange their dollars for European currency. How did the civilians get enough dollars to matter? Are some elites activating escape plans?

Next: Soft Landings For Falling Dominoes