- 19/07/2025
Documentary, NHK Hidden Economy: Money and Power in North Korea
Category
📚
LearningTranscript
00:00This is a new amusement park in North Korea's capital, Pyongyang.
00:17People are enjoying a momentary break from daily life.
00:29More and more recreational facilities are opening around the country.
00:37The people who use them are mainly officials of the Korean Workers' Party, the military, and their families.
00:48The man behind them is Kim Jong-un, the ruling party's first secretary and North Korea's leader.
00:59It was Kim who had his uncle and guardian purged in December 2013.
01:09In April, Kim reorganized the country's leadership lineup to solidify his power base.
01:21North Korea has become increasingly isolated under a series of international economic sanctions.
01:31The country is in financial straits. How has the totalitarian regime managed to stay in power?
01:39We posed this question to North Korean defectors, including people who were once high-ranking officials in the leadership's inner circle.
01:53You may find it difficult to understand why only senior officials have affluent lifestyles.
02:03But if you look into North Korea's unique hidden economy, you'll see how the leadership secures funds and maintains the regime.
02:13What exactly is this hidden economy? Our investigations in several countries revealed the existence of secret funds that only the Supreme Leader can freely use.
02:29Kim Jong-un's funds are foreign currency brought in from abroad.
02:39It's thought three to four billion dollars are sitting in an underground vault.
02:48How are massive funds for sustaining the regime generated? And how are they used?
02:59We'll explore the connection between money and power in North Korea.
03:04More than two years have passed since Kim Jong-un took control.
03:28The capital is undergoing a big transformation.
03:33Isn't this wonderful? It's the most modern place in Pyongyang.
03:42These new condominiums are in the city center.
03:50The residents are said to have been chosen for their contributions to the country.
03:55This husband and wife were rewarded for being exemplary workers.
04:10The moment I saw this place, I just fell in love with it.
04:18Everything is nice and of the highest grade.
04:23It's a comfortable place to live.
04:27Soon after they moved in, Kim Jong-un and his wife paid a visit.
04:40The occasion was broadcast on state-run TV.
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04:57the members of Kim Jong-un and their advisors had beenlatting spurs Ximgenov.
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05:17Giving homes and other luxury items in exchange for loyalty is part of the North Korean practice
05:26of gift politics.
05:31The recipients range from ordinary citizens to higher ups in the ruling party and the
05:35military.
05:38A former senior government official who defected and now lives in Seoul has
05:46inside knowledge of gift politics.
05:55Until the mid-1990s, Kang Myung-do worked in North Korea at an organization directly controlled
06:02by the leader.
06:08Winning the hearts of senior officials, that's the objective of gift politics.
06:13The recipients believe the supreme leader thinks highly of them.
06:18They're just about moved to tears, and a sense of allegiance swells naturally in their hearts.
06:24The aim is to make people feel they would die for their leader.
06:30The person who began gift politics was Kim Jong-un's father, the late General Secretary Kim Jong-il.
06:43In the early 1970s, he emerged as the successor to his father, Kim Il-sung, the founder of
06:49North Korea.
06:52He showered his supporters with expensive gifts and ruthlessly removed those who opposed him.
07:02This effective use of carrots and sticks enabled him to firmly establish power.
07:12Kang says the organization he worked for has a section designated to procuring and distributing
07:17gifts.
07:18He says the staff gathered luxury goods from all over the world.
07:28We were busy, especially before New Year and the Supreme Leader's birthday.
07:35Germany, Austria, Guangdong Province in China, and Macau.
07:44Staff were sent there to buy presents for senior officials.
07:59China was one of the official's regular shopping destinations.
08:15A man who says he was once involved in gift buying agreed to an interview.
08:23Kim Jong-rul was in charge of managing luxury cars for North Korea's senior officials.
08:28He says that over a twenty-year period, he was often sent to Europe to buy cars and other
08:38extravagant goods.
08:49He was given detailed instructions, along with a list of items to purchase.
08:55The gifts officials received varied by type and price according to their rank.
09:02Look under comment and price according to their definition, a number of supplies has been
09:31or I'd be disobeying orders.
09:34I had no choice.
09:40Kim Jong-il's gift politics is said to have become progressively more extravagant.
09:49If he gave cheaper gifts or stopped altogether,
09:53subordinates' loyalty might waver.
10:01You have to always give something better than before,
10:06otherwise a present could have a negative effect.
10:11So Kim Jong-il put top priority on gift politics.
10:21Kim Jong-un inherited this method of governing.
10:25The young leader doesn't just give presents,
10:32but also builds recreational facilities
10:34where senior officials, their families and other people can enjoy themselves.
10:39Sources say he spends some $600 million a year on gift politics,
10:45about twice as much as his father did.
10:47Kim Jong-un's power base is weak,
10:54so he has to give out more presents.
10:57If people receive two or gifts,
11:00they would say he's less of a leader than his father was.
11:06Where does Kim Jong-un obtain such huge amounts of money?
11:10People with inside knowledge say
11:16he uses a system that's unique to North Korea.
11:19Kim Jong-un was an executive at North Korea's finance division
11:42before he defected to South Korea.
11:44He's known as one of the foremost experts on North Korea's economy.
11:49He says North Korea has two distinct economies.
12:03One is the people's economy for the general public.
12:07The other is the royal court economy and is controlled by the leader.
12:16The supreme leader has created his own economy,
12:19that he personally manages separate from the national coffers.
12:28The royal court economy is the financial foundation of the Kim dynasty.
12:39The people's economy is a typical socialist economic system.
12:44Citizens use plans compiled by the party and the cabinet
12:51to produce goods and services.
12:55They receive supplies in return.
13:04The distribution of supplies constituted the backbone of the people's economy.
13:09The government guaranteed that it would provide citizens with all of their food
13:18and daily essentials.
13:27But Kim Jong-il started using public funds as his own property
13:32to strengthen his power.
13:36That's how the royal court economy began.
13:45The supreme leader siphoned off large amounts of money
13:48that he could use as he wished,
13:50without seeking the party's approval.
13:52He used the money for gift politics
13:56and also for military projects,
13:58such as developing missiles and nuclear weapons.
14:04The royal court economy has expanded
14:06at the expense of the people's economy
14:08and is now believed to account
14:10for more than 60 percent
14:12of the nation's entire economic activity.
14:14In the meantime,
14:25many citizens live in poverty.
14:32In the 1990s,
14:34the distribution of supplies
14:35that the public relied on effectively collapsed.
14:38Because of that and natural disasters,
14:41huge numbers of people died of starvation.
14:44The royal court economy
14:49is the nourishment
14:51that maintains the Kim dynasty.
14:55It is a parasite
14:56that sticks a straw
14:59into the people's economy
15:01and sucks out the flesh.
15:06It's like a cancer on socialism.
15:14How are the massive funds
15:19that support the royal court economy collected?
15:27Our research shows that North Korea
15:29has an organization dedicated to that task.
15:32A former senior official
15:40told us where it is.
15:47This is room 39.
15:51All the money it gathers
15:52goes to the leader.
15:54He says it's an organization
16:01located in central Pyongyang
16:03known as Room 39.
16:08It has played a key role
16:10in supporting the royal court economy.
16:12Sources say
16:17Room 39 controls
16:19all sorts of businesses
16:20from trading companies and mines
16:22to farms
16:23and livestock producers.
16:29The foreign currency
16:30collected by Room 39
16:32flows directly to the Supreme Leader.
16:35It's kept separate
16:36from the state budget.
16:37The former official says
16:43the money is stored
16:44in party headquarters
16:46near Room 39.
16:58At the party's
16:59three-story headquarters
17:01there's a sturdy facility
17:03like an underground palace.
17:07It holds huge amounts
17:10of Japanese yen
17:12dollars
17:13and euros.
17:23It's unclear
17:24just how much
17:26foreign currency
17:26the people at Room 39
17:28have helped to gather.
17:30But it's estimated
17:32to amount to more than half
17:33of the billions of dollars
17:35the country receives
17:36in foreign currency
17:37revenues each year.
17:45The royal court economy
17:47is made possible
17:48by massive amounts
17:50of foreign funds.
17:51We visited one of
17:53Room 39's operational hubs
17:54Macau
17:55to find out how it works.
17:57Macau's regulation
18:08of financial institutions
18:10has traditionally been loose.
18:12Because of this
18:12the territory
18:13attracts money
18:14both legal and illegal
18:16from around the world.
18:17A former high-ranking
18:27North Korean official
18:28who worked in Macau
18:29until recently
18:30agreed to talk to us
18:31on condition of anonymity.
18:41Macau.
18:42It's so easy
18:44to move money
18:45in Macau.
18:51There's no place
18:53like it
18:53for making secret deals.
18:56That's why
19:04Macau was selected.
19:12The man guided us
19:13to a certain place.
19:14room 39
19:33had an office here.
19:35He says
19:40he used to meet
19:41military-related
19:42personnel
19:42from different
19:43countries here.
19:45They would discuss
19:45weapons deals
19:46a major source
19:48of foreign currency.
19:52The weapons
19:53were destined
19:53for Southeast Asian nations
19:55like Vietnam
19:56and Myanmar
19:57those in the Middle East
19:58such as Iran
19:59and Syria
19:59and even some
20:01countries in Africa.
20:05I earned
20:12a lot of foreign
20:14currency
20:14through the weapons
20:15trade.
20:21I sent the money
20:22to North Korea
20:24through Macau.
20:35How were these
20:36top-secret
20:36transactions made?
20:39We heard in detail
20:41from a former
20:42senior military official
20:43who was directly
20:44involved in the deals.
20:50We had buyers
20:52visit Pyongyang
20:53as government envoys.
20:55We showed them
21:01weapons at the
21:02factories
21:02and negotiated
21:04prices.
21:09We signed contracts
21:11using false product
21:12names
21:13such as printers.
21:25He says
21:26deceptive measures
21:27were also used
21:28during transport.
21:34We have filled
21:35containers
21:36with weapons
21:37and moved them
21:39to another ship
21:40at a Chinese port.
21:41Then we piled
21:47other goods
21:48on top
21:49of the weapons
21:49and filed
21:51forged papers.
22:02North Korea
22:03has benefited
22:04greatly
22:05from the arms trade.
22:07The deals
22:07are believed
22:08to have provided
22:09as much
22:09as a billion
22:10dollars
22:10in foreign currency
22:11a year.
22:22Governments
22:23are now
22:23working together
22:24to cut off
22:25the North's
22:26funding sources.
22:33A non-governmental
22:35organization
22:35in the U.S.
22:36received a request
22:37from the United Nations
22:38for information.
22:39Transarms
22:41monitors
22:41North Korea's
22:42weapons trafficking.
22:46208 active
22:48North Korean
22:49flag.
22:53The group
22:55keeps track
22:55of North Korean
22:56vessels and aircraft
22:57around the clock.
22:58staff check location
23:08data from satellites
23:09against official paperwork
23:10and try to spot
23:12suspicious movements.
23:13destinations.
23:23Destination is Diana.
23:25Diana.
23:26However,
23:27this ship...
23:29But Finardi says
23:30the ship does not
23:31seem to be staying
23:32on course.
23:33Resolve for Diana
23:35and destination.
23:36closer monitoring
23:41has led to a number
23:42of raids
23:43on North Korean
23:44vessels.
23:48In July 2013,
23:51authorities seized
23:51a large shipment
23:52of arms
23:53in the Panama Canal
23:54from a North Korean
23:55cargo ship.
23:57Hidden under
23:58large bags of sugar
24:00were fighter jets
24:01and disassembled missiles.
24:15Governments are also
24:16joining hands
24:17to stop the flow
24:19of money
24:19to and from
24:20North Korea.
24:21The first target
24:28was Banco Delta Asia,
24:30a small bank
24:31based in Macau.
24:37The U.S. government
24:38forced BDA
24:39to freeze accounts
24:41held by North Korea
24:42in 2005.
24:51North Korea
24:53had been settling
24:53accounts
24:54with its worldwide
24:55business partners
24:56through this institution.
25:00The bank
25:01froze North Korea's
25:02accounts.
25:04This cut off
25:04an important channel
25:05for conducting
25:06international transactions
25:08and funneling money
25:09to Pyongyang.
25:11No banks
25:12will do business
25:14with them,
25:15especially
25:15in the western countries.
25:18Like the market
25:19in Hong Kong,
25:20it's a financial
25:20major market.
25:20Japan,
25:22Hong Kong,
25:22Singapore.
25:31David Asher
25:32was involved
25:33in the decision
25:34to impose
25:34financial sanctions.
25:36He says officials
25:37thoroughly investigated
25:39North Korea's
25:39accounts at BDA.
25:46Bank,
25:47Bank of Delta
25:47linked in the banks
25:48all over the world
25:49and bank accounts
25:50all over the world.
25:51We mapped out
25:52how their regime
25:53financed from Kim's
25:54perspective.
25:55And our goal
25:56was to send a message
25:58to Kim
25:58that if he didn't
25:59cooperate,
26:00we could cut him off
26:03personally
26:04and he would be
26:05held responsible.
26:06How does North Korea's
26:18leadership obtain foreign currency
26:20now?
26:29This man is the former
26:31high-ranking official
26:32who was in charge
26:33of procuring foreign funds
26:34in Macau.
26:35He says North Korea
26:37has remained active here
26:38even since
26:39the sanctions
26:40took effect.
26:45He led us to a place
26:46that's separate
26:47from the office
26:48used for arms deals.
26:54It's on a street
26:55lined with small shops.
26:57The door's closed.
27:06There's no sign.
27:12He says gold is traded here.
27:20North Korea's gold deposits
27:22are among the largest
27:23in the world.
27:24As arms deals
27:25became increasingly difficult,
27:27officials tried to earn
27:28foreign currency
27:29by selling gold
27:30and other mineral resources.
27:34All the gold
27:36is gathered here.
27:39Hundreds of kilos
27:41are brought by plane.
27:47The man tells us
27:49that gold transactions
27:51are always conducted
27:52in cash.
27:56No money passes
27:57through bank accounts
27:58so no trace
28:00of the transactions
28:01exists.
28:04Since the UN sanctions began
28:07the country has earned
28:09money with gold.
28:12They sold it in Macau
28:14last year too.
28:16cash, all in cash.
28:24The North Koreans
28:25use illegal means
28:27to move the precious metal.
28:36Hong Soon-kyong
28:38is a former diplomat
28:40who worked
28:40at the North Korean embassy
28:42in Thailand.
28:42He says he was ordered
28:48to transport gold
28:50using the diplomatic immunity
28:52that exempted him
28:53from baggage inspections.
28:58We used our diplomatic passports
29:00to smuggle it out
29:02without going through customs.
29:06Diplomats at most
29:07North Korean embassies
29:08engage in such illegal activities.
29:11The international community
29:18is engaged
29:19in a battle
29:19with North Korea
29:20whose leaders
29:21are determined
29:22to obtain
29:23foreign currency.
29:26A tug of war
29:27continues
29:28behind the scenes.
29:30Kim Jong-un
29:44is resorting
29:44to various means
29:45of scraping together
29:46foreign currency
29:47in a bid
29:48to keep his grip
29:49on power.
29:49foreign currency
29:50in a bid
29:51to keep his grip
29:51on the border.
29:52But there are signs
29:59that it's becoming
30:00increasingly difficult
30:01for him
30:02to keep the royal court
30:03economy going.
30:04A scholar
30:15has picked up
30:16on signs
30:17that something
30:17unusual is happening.
30:23Kim Sun-chul
30:25defected
30:25in the 1990s.
30:27For more than a decade,
30:28he's been studying
30:29North Korea's power structure.
30:31He's been analyzing
30:40Kim Jong-un's
30:41recent movements.
30:49He found out
30:51that Kim is offering
30:52fewer presents
30:53than before
30:54and is relying
30:55on words of thanks
30:56instead.
31:01records of Kim Jong-un's
31:05inspection tours
31:06say he expressed gratitude.
31:09This means
31:09a gift of words only.
31:15Compared to
31:16two years ago,
31:17the number of such gifts
31:20jumped last year.
31:22I believe this shows
31:24that funds
31:25for the royal court economy
31:26are getting tighter.
31:27The royal court economy
31:40is crucial
31:41for Kim Jong-un
31:42to maintain power.
31:44The leader
31:44is under pressure
31:45to find new ways
31:47of earning foreign currency.
31:48The Mansudei Art Studio
31:56is a player
31:57in this scheme.
31:58It produces
31:59bronze propaganda statues
32:01for the government
32:01in Pyongyang.
32:10Its artisans
32:11have produced
32:11every statue
32:12of the country's leaders.
32:14Now,
32:19they're using their skills
32:20in other parts
32:21of the world.
32:35Their works
32:36can even be found
32:37in Africa,
32:3813,000 kilometers
32:40from North Korea.
32:41In Senegal's capital,
32:49Dakar,
32:50a huge bronze
32:51stands on a hill.
33:04The 50-meter artwork
33:06is taller
33:07than the Statue of Liberty
33:08and costs
33:09around $25 million.
33:11to build.
33:12It was created
33:13by the Mansudei Art Studio.
33:2160 workers
33:22from North Korea
33:23spent more than
33:24two years
33:25building it.
33:25in North Korea.
33:26This man
33:39worked with them.
33:40These men in the picture are from North Korea, they are true craftsmen.
34:03They can do everything, from welding to stone cutting.
34:14Of the total construction cost of 25 million dollars, it's said that half was paid to North
34:21Korea.
34:22Oh yeah, what I can tell you is that they were very happy with this project.
34:31They did make money, they were very happy, and I guess after that they are still in Senegal
34:35and looking for other projects here in Senegal and elsewhere in Africa.
34:44In March, a new statue was completed in Namibia in Southern Africa.
34:53North Korean craftsmen built it too.
34:59Representatives wearing Kim Il-sung badges attended the unveiling ceremony.
35:09North Korea has crafted nearly 30 statues and structures in Africa.
35:25The government is also earning foreign currency by mobilizing thousands of workers.
35:31Even ordinary citizens are being sent overseas.
35:41This is Ulaanbaatar, the capital of Mongolia.
35:49In mid-March, more than 50 North Korean laborers were seen at an apartment construction site.
36:08They work in the bitter cold.
36:16The crew is under constant surveillance by North Korean authorities.
36:23Is it colder than in North Korea?
36:26I like it better in North Korea.
36:29It's our home.
36:37This man is the president of the Mongolian construction company.
36:40He pays each worker a monthly salary of about $500.
36:44Yet most of that money is said to wind up in the hands of North Korea's government.
36:50They seem to get enough cash to buy cigarettes and sweets, but no more.
37:06I think North Korea is getting quite a lot of money.
37:13North Korean women work at a sewing factory in Mongolia.
37:27In the past, leaders in Pyongyang strictly limited people's mobility to minimize their exposure
37:32to information from abroad.
37:38But they've abandoned that principle and have been sending a stream of workers overseas.
37:52It's estimated that there are now 100,000 North Koreans working around the world.
38:07North Korea is doing whatever it can to earn foreign currency.
38:15But it seems they can't gather enough funds to keep the royal court economy afloat.
38:26The shortage of funds triggered a power struggle at the top.
38:38The result was the purge in December 2013 of Chang Song-taek, the de facto number two in
38:46North Korea's leadership.
38:53Chang was Kim Jong-un's uncle.
38:59As Kim's advisor, Chang was given the task of getting the economy back on its feet.
39:07What happened between the two men?
39:20Kim Jong-un officially took office in 2012.
39:27When Chang visited China that year, he was received by Hu Jintao, who was then president.
39:33Kim expected Chang to leverage his strong connections with the Chinese to obtain foreign currency.
39:50Chang was trying to promote Chinese-style reforms and more openness.
39:55Kim Jong-un's symbol of his efforts was North Korea's Rasson Special Economic Zone.
40:05A large shopping center was built in the zone with Chinese funding.
40:27There's also a hotel with a casino.
40:35Chang tried to earn foreign currency by attracting Chinese companies to the economic zone.
40:48And power began to flow toward Chang.
40:59He was the head of the party's administration department.
41:07Until then, Room 39 was used to channel foreign currency to Kim Jong-un.
41:15But Chang's administration department began to gain influence over the mines and trading companies that generated the funds.
41:25As a result, foreign currency began accumulating around him.
41:38It's thought that Kim began to fear that Chang would seize the money.
41:54Kim's son Chul has been following Kim Jong-un's movements.
42:01He thinks the money enabled Chang to begin wielding more power.
42:08Chang started doing as he wished.
42:15That, and the fact that First Secretary Kim was in need of funds, resulted in the purge.
42:26In the end, it came down to a battle over who gets the money.
42:33In December 2013, Chang was held responsible for the economic problems of the nation and executed.
42:51Chang's son Chul had executed.
42:58He kept the money, and had given to the border with the country's political power.
43:00He was a man who had called the Chinese government and collected the power of foreign countries.
43:03He made the money, and he made the money and his own power by Patreon through the country,
43:08and made the money and its own power.
43:10He kept the money and his own power.
43:11He put the money, and he laid out to the country, and he made an asset.
43:14Some experts question how much power Chang really had.
43:31Kim Kwon Jin is an expert on North Korea's economy.
43:36He thinks Chang was trying to normalize economic conditions.
43:43In North Korea, the leader himself has upended the people's economy.
43:54Chang aimed to create a society where people could live in prosperity.
43:59I think he was trying to rebuild the economy using foreign currency.
44:08No one knows what Chang's true intention was.
44:13Kim Jong-un purged Chang.
44:23That caused relations with China to deteriorate and further limited North Korea's channels
44:29for obtaining foreign currency.
44:32Yet another recreational facility has opened in North Korea.
44:49It's a large-scale ski resort.
45:04Kim Jong-un continues gift politics to maintain his hold on power.
45:14But the cost of constructing facilities is mounting.
45:17It's said that financing them is becoming more and more difficult.
45:26Everyone knows the current system is wrong.
45:29Why is it that only North Korea is impoverished?
45:34Officials know how building recreational facilities will negatively impact the economy.
45:44In March, Japan and North Korea held their first high-level government talks in more than a year.
46:01It's believed the North Koreans want Japan to ease economic sanctions.
46:10It's said they'll try to use the unresolved abductions of Japanese nationals as a bargaining chip.
46:16What does the future hold for North Korea?
46:28Kim Jong-un's regime is under pressure to govern, even as the volume of foreign currency keeps shrinking.
46:35As military chiefs and party leaders fight over a smaller pie, the power structure will gradually become unstable.
46:49The international community must cut funds for the royal court economy that torments the people of North Korea.
47:00The problem must be addressed as soon as possible.
47:05There must be a global effort.
47:16For 40 years, the royal court economy has supported North Korea's power structure.
47:23As funds dwindle, will North Korea open up, or will it continue to provoke other nations?
47:43The world is watching.
47:46The world is watching, Washington, Washington, the US.
47:51The world is only watching.
47:53The world is the way of folding and operating.
47:54It's also doing all these things apart in North Korea.
47:56The world is over golf priced at 5- pairs.
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41:48
44:00
51:16
1:27:04
59:13