A Capitalist in North Korea

by Felix Abt

  Without much real work on the table, they instead observed and analyzed what they saw and reported it to their respective governments. If this was considered espionage – and I would not challenge this notion - then the consultant was right in his judgement. On the other hand, it’s expected of diplomats to gather information about their host country in a way that wouldn’t always be considered spying. Journalists and businesspeople have been known to dive in and feed intelligence to their embassy; take, for instance, the famed reporter Pham Xuan An who, in the Vietnam War, was a Time magazine correspondent and a double agent who played both the CIA and North Vietnam’s intelligence bureau.

  Outside of diplomatic circles, the expatriate community consisted of international donor organizations such as the World Food Programme (WFP), the UN children’s fund (UNICEF), the International Federation of Red Crescent and Red Cross Societies (IFRC), and the World Health Organization (WHO). Fewer than a dozen NGOs hired foreigners in North Korea, and a third of the groups came with religious backings. The North Koreans were wary of them, because spies could be among them.

  A Frenchman who was fluent in Korean, after working for an NGO in North Korea, never revealed his language skills until the day a UN organization offered a better paid job to another expatriate. A few weeks later, when his visa expired, the government did not extend it - without giving a reason. Foolishly hiding his Korean language skills, and potentially using them to listen to North Koreans unaware of this, was obviously considered an act of espionage.

  Some ABB executives privately told me that they believed that the American woman who took care of my laptop-matter at the Group’s compliance department, was a CIA agent. Given how the CIA works overseas, such an allegation wouldn’t be surprising if true. Historically, the Agency’s case officers have been notorious for convincing “agents,” or freelancers working for governments and companies, to feed them information. Henry Luce, the founder of TIME magazine, was one example of a pro-Washington conservative who allowed spies to take covers as journalists throughout the Cold War.

  In August 2005, state officials made a turnaround that backed their anti-spy paranoia: they announced that most expatriates not attached to diplomatic missions should pack up and leave North Korea by the end of the year. The DPRK, they explained, had received humanitarian aid that helped them pull through the famine, but that the aid stretched on much longer than the usual 2 to 3 years in case of similar natural calamities. The result, officials rightly feared, was that do-gooders were creating a “culture of dependence,” one official said in the announcement. Using that phrase, they meant that the government needed to enact more of its own development cooperation from now on.

  Still, the Koreans, in a usual pragmatic way, left open a caveat: foreign organizations could maintain their offices in Pyongyang if they were managed by Koreans. The arrangement came with all sorts of benefits, most importantly that the risk of espionage would have been minimized to almost zero.

  Unlike in Cambodia and Africa, there is no risk of being overrun by foreign NGOs in North Korea as its government does its best to keep them in check. After months of negotiations with nervous foreign groups, the regime came to a compromise: UN organizations were allowed to stay as long as they reduced the number of foreign staff, while European NGOs were allowed with fewer staff to operate “undercover” using an EU banner.

  Suddenly, they had to give up their fake EU status because, as one European diplomat told me, it was a “face-saving deal” for all parties involved. Most NGOs agreed, and a minority among them decided to leave the country. This was because they did not want to lose their identity as an NGO. In their eyes, this may also have diminished the chances of being funded by private sponsors.

  The benefits of continued aid and of future development projects disguised as humanitarian aid—since EU countries rejected any development cooperation with the development of nuclear weapons—outweighed the risk of contaminating pure Korean minds and of spying and plotting against the Korean fatherland.

  The CIA “branch office”

  Over a period of seven years, the only Americans living in Pyongyang were the two successive heads of the country’s WFP offices, and they were not spies. But expatriates joked about the impressive WFP compound, calling it the de facto “American embassy” or the “CIA branch office.” At the time, the US was the largest food donor to the country taking up three-quarters of donated food, and all of it was funnelled through the WFP. But many foreigners living in Pyongyang, including myself, would never have believed that the U.S. offered the goods out of a purely humanitarian motivation.

  The reasons for the so-called “humanitarianism” included, of course, gathering information. All donated food was distributed through large parts of the country in the presence of the WFP staff to alleviate the possibility it would be diverted. Those staff had remarkable access to a large part of the country except areas considered sensitive by the North Koreans, most for military use, making them privy to valuable information that probably exceeded the diplomatic importance of the food aid. But the approach had its drawbacks to information gathering: in times of heightened political tensions, such as when missiles were tested, the foreign donors didn’t allow food to arrive and be distributed.

  This made the needy particularly vulnerable to any vacillations in global political moods. The satellites and the flights of unmanned espionage planes the U.S. sends over DPRK territory on a daily basis were of limited value; they could not make up for direct contacts with as many North Koreans as possible on the ground. The legendary U-2 “Dragon Lady,” an icon of the Cold War, was the airplane used by the CIA to spy on North Korea for more than 35 years.3

  Were some of these American aid workers actually with the CIA? I can’t say for certain, but the circumstances were sometimes suspicious. For a few years the second-in-command leader at the WFP in Pyongyang, a fluent Swiss-German speaker, claimed he was a Swiss man. From his suspicious remarks, he seemed convinced that the few foreign business people in Pyongyang, including me, were regime-supporting opportunists involved in fishy business.

  It was only later that a secret he tried to keep strictly confidential came out: He was also an American citizen and, well, a patriot. But quite a few foreigners, myself included, believed he projected his “Swissness” on purpose to get more information out of people. In this sense, he could have been some sort of informant for the US government, even if he was not an official employee.

  A French NGO staffer was similarly put off by the humanitarian field. He told me he was surprised that his French bosses asked so many questions that had nothing to do with the organization’s work in the DPRK. After discussions with the Korean staff and official at the time, the reason for this clicked. North Korea was watching the invasion of Iraq, preparing to fend off a potential threat to its sovereignty. They knew that charity groups in Iraq fed information to NGOs, which was then used by the U.S. and the British to prepare the Iraq War.

  A Russian journalist from the country’s Information Telegraph Agency (Itar-Tass) films a trade fair in Pyongyang. Most North Koreans would offer a few common explanations for his inquisitiveness: 1. “This foreigner is preparing a report for a foreign country in praise of our great country and its great leadership.” Or 2. “This foreigner might be spying on us during this exhibition.” More worldly cadres might have a third explanation: “This foreigner may be doing 1. and 2. at the same time.”

  Strangely, only foreign journalists accompanied by government minders on their visits—from the moment they stepped from the airplane in Pyongyang until they boarded the flight back home—had to wear a clearly visible “press” marking on their arm. Yet this journalist and his resident foreign colleagues did not have to wear it and were free to move around in Pyongyang on their own. They essentially had the same freedoms as other expatriates.

  Snooping for information

  I was surprised to learn from the head of a humanitarian organization in Pyongyang, a ser
ious man who did not tend to sensationalize stories like other expats, that American government officials had contacted some foreigners arriving in Beijing to interview them. Since it happened in broad daylight, the Chinese authorities must have known, but stayed quiet.

  That wasn’t the first chatter I heard. A Belgian businessman who, a decade earlier, ran a Pyongyang-based diamond cutting business told me that he was contacted in Beijing by the former South Korean spy agency, the Korean Central Intelligence Agency (KCIA). When he told them he did not want to get involved, they tried to blackmail him by denouncing him as a “collaborator” with a North Korean security agency.

  South Korea has a history of this. The now-defunct South Korean CIA (KCIA), once at the forefront of the Cold War, has been forced to add nuance to its tactics after being renamed the NIS. This was especially true after South Korean president Kim Dae-jung launched his “sunshine policy” towards North Korea. The purpose was to focus on a more constructive engagement after the Cold War ended, bringing the two rivals together via diplomacy rather than separating them through thuggery.

  Ironically, the spy agency was later accused of having facilitated the first historical meeting between the Northern and the Southern presidents by secretly delivering a payment to the Northern side. Covert operations have taken on a different form, it seems!

  With the post-Cold War transformation, the incident that rankled the Belgian businessman would have been unthinkable when I lived in Pyongyang. The new world reality gives credibility to my estimate that nearly all business people in North Korea are not spies.

  That they themselves are spied upon, however, is completely certain, and most likely by more than one country. For example, the son of the secretary to the German ambassador, a quick-witted IT student, spent his holidays in Pyongyang. I asked him to revise all programs installed on my computer and he removed more than a dozen Trojan and other spyware programs. According to him, the programs were of both Western and Eastern origin and could have been installed to gather political information.

  Emails, though, are like postcards that many can see, and the North Koreans government is not unique in spying on its citizens. Special government services all over the world—especially the US’s communications and cryptography service, the National Security Agency (NSA)—have the ability to read each and every email they choose with enough effort. The only way to fool them, for those who fancy doing so, is to include disinformation in the messages and to avoid writing and storing sensitive things.

  I would do that to protect my e-mail account sometimes, and attempt to annoy all those who were snooping. But with my lack of technological prowess, I didn’t take on a systematic approach to misleading them. My counterparts in those agencies were certainly not amateurs like me.

  Defector tales

  Rather than targeting businessmen like me, South Korean and American spy agencies rely on the 20,000 or more North Korean defectors living in South Korea.

  And although they bring harrowing stories of suffering, some of the refugees are indeed feeding information to intelligence agencies and journalists. As 70 percent of them remain jobless in South Korea, they can make a living by selling dubious information.

  When I first heard that North Korean defectors claimed the DPRK was counterfeiting sophisticated US dollar super bank notes, I was skeptical. This would have been the most high-tech product made in North Korea. All the machines came from Switzerland, which could not even sell them to North Korea and, for those they already sold, kept track of the whereabouts. The special high-tech paper and special high-tech ink required to fabricate such bank notes come only from the US, according to the renowned bank note expert Frank Bender.

  Further raising questions, the U.S. also limits its bank-note sales to an exclusive club of supposedly “serious” bank note printers that basically consist of people on good terms with the government. I also was wondering if these defectors forgot that North Korea would first and foremost replace its torn and tattered bank notes adorned with the portrait of god-like Kim Il Sung. That’s at least before undertaking the costly effort of printing super notes that would earn the country, according to its accusers, a measly $20 million. So how could North Korea have possibly been counterfeiting dollars?

  Not all defectors are making up their stories, and many of their terrible experiences are true. But some academics and authors seem to blindly accept all stories at face value, especially when they stem from North Korean defectors, even though there’s no way to verify them. This is true with the biography of one defector, Shin Dong Hyuk, a man born and raised in a labor camp from which he later escaped. Washington Post journalist Blaine Harden wrote his story in his book, Escape from Camp 14, published in 2012. The problem was that he initially presented his story differently from how he told it later. The “insight,” of course, isn’t entirely true.

  In 2007, I saw how the American government can quickly turn against its friends out of spite. The English-language media ran a big news story about Steve Park, a Korean-American man who imported the North Korean version of Soju into the United States. The importer, of course, was later arrested as a spy – but, strangely, not one hired by North Korea but from South Korea! To my surprise, spying inside the U.S. against an enemy country is allowed and, in certain politically convenient episodes, is encouraged—as long as the sleuth is registered with a U.S. government agency. The man neglected to do so and was jailed.

  At first glance, it appeared the U.S. burned a snitch siding with them thanks to the country’s burdensome and unwavering bureaucracies. But it’s also possible that they embarked on a cover-up to attain a hidden goal: to make the North Koreans, already paranoid enough, even more wary of spies camouflaged as investors. The idea was to make business with foreigners more difficult and to corner the country further.

  From a North Korean standpoint, then, it’s understandable why the paranoia grew during the Bush administration. “Had we not built a strong deterrent, we would have been invaded like Iraq and Afghanistan and would we not strongly control the influx of people and anything else we would be infiltrated and sabotaged like Iran,” Dong Jie Han, a top party cadre explained to me over coffee.

  He made a fair point, even if outsiders never fully grasped why the regime would pursue its massive army and weaponry. It was relatively easy to invade Saddam Hussein’s Iraq which, unlike North Korea, lacked the nuclear arsenal to deter its enemies. Iran’s enemies, such as Israel, also had a smoother time launching a cyber war, assassinations and systematic acts of sabotage in Iran. Compared to North Korea, Tehran maintains a degree of openness.

  The retrenchment against outside influences bodes ill for a future opening up and for economic reforms, or at least that’s what Haggard and Noland argue in their study, Witness to Transformation.

  The West, meanwhile, is clinging tightly to false hopes that North Korea will give up its nukes – its best deterrent, and likely to remain that way. After all, the Western policies of cornering North Korea for more than half a century resulted in Pyongyang going nuclear. Yet U.S. Secretary of State Madeleine Albright, who met North Korea’s former leader Kim Jong Il, wrote that she was “prepared to trade military concessions for a combination of economic help and security guarantees.” A glimmer of hope remains that somebody with a good pragmatic sense starts seriously engaging with North Korea like U.S. President Nixon did with Chairman Mao Zedong’s China in the early 1970s.

  An American détente would allow North Korea to relax its securitization, freeing up its behemoth resources that are currently tied to the military. That money could then be invested in the build-up of a modern infrastructure and the rehabilitation of the economy. It would also attract large foreign investments that would contribute to make North Korea a new “tiger economy,” as happened in the 1960s and 1970s with South Korea, Taiwan, Japan, the Philippines, and Malaysia (the latter two were only partially successful in their transformations, having reached a middle-income level and then stopping. But t
hat is nevertheless a good improvement compared to the gut-wrenching poverty they experienced beforehand).

  There shouldn’t be any doubt that the North Korean people see patriotic national development as a priority, especially when you consider that some are reportedly jumping into torrential floods at the risk of their lives to save portraits of Kim Il Sung. I saw their nationalistic fervor upfront, but never betrayed them or spilled their secrets. Only after moving from North Korea to another country I was approached by some organizations and dubious individuals. I did not betray my principles and will take those secrets to my grave.

  1 Seung-Ho Joo, “Korean Foreign Relations Toward The Twenty-First Century: Reunification and Beyond,” American Asian Review, Vol. XVI, No. 3, Fall 1998, p. 104.

  2 Norman D. Levin, “What If North Korea Survives?” Survival: The IISS Quarterly, Vol. 39, No. 4, Winter 1997-98, p. 158.

  3 http://www.huffingtonpost.com/2012/02/29/spy-planes-north-korea_n_1309877.html

  PART II

  Chapter 7:

  Southerners, Yankees, and “Chinese Lips”

  “We oppose the reactionary policies of the U.S. government, but we do not oppose the American people. We want to have many good friends in the United States.” — Kim Jong Il

  For a moment, the room came to a standstill. At a dinner in Pyongyang, Dr. Tejbir S. Walia, the Indian-Canadian head of the local WHO office, mentioned that he went on a work trip to meet with the South Korean Ministry of Unification, which was donating medical equipment. While in Seoul, he bumped into a group of South Korean youngsters and asked them what they thought about the prospects for unification.

  The answer wasn’t optimistic. The scenario would cost too much for the South, and the southerners said they’d rather keep comfortable lifestyles. Indeed, the drastically high cost of unification was estimated by the state-run South Korean Institute for National Unification at $47 billion to $216 billion1 in the first year of unification alone.