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If we want to understand North Korea, we are better off thinking about models that will helps us do so rather than parsing KCNA stories or foreign media coverage. Justin Hastings at the University of Sydney has made a career studying criminal and terrorist networks in East and Southeast Asia, and has an interesting new paper (forthcoming in the Review of International Political Economy; in .pdf) on Korea's drug smuggling networks. His basic insight: we should look at these networks through the lens of international value chains and their characteristics, including the nature of distribution, their governance and geographic scope.
Drawing on evidence provided by significant interdictions and busts, he begins with the state-directed production and distribution network that operated through the mid-2000s. It appears the government began to get concerned around this time with the domestic consequences of a marginalized population on meth. An interesting hypothesis is that the central government’s decision to withdraw and crack down had the perverse effect of decentralizing the nature of government involvement to provincial institutions, such as the Hamheung Chemical Engineering University and Hamheung Academy of Sciences, as well private factories. These factories operated under the protection of state security entities that became involved in shielding the industry from scrutiny—at a bribe price.
During the state-directed phase, a greater share of the drugs found their way directly to foreign buyers. North Korean vessels would leave port and meet up with criminal middlemen at sea who were members of organized crime syndicates in South Korea, Japan, and Taiwan. In the second phase China has become more central and North Koreans play a more central role in the distribution networks. Drugs are now typically smuggled out by North Koreans, who continue to operate on the Chinese side of the border before distributing to lower-level Chinese street vendors or another layer of intermediaries managing the trafficking outside of China.
Another perverse consequence is that the crackdown has probably increased domestic distribution, a development due in part to the fact that production is not located that proximate to the Chinese border.
For those who follow the drug issue closely, the empirical material may not be new. But Hastings has put it all together in a useful framework that directs our attention to changing features of the network, including the decentralization of production and distribution, ongoing state involvement but now through bribery and protection rackets, and the increasing role of North Koreans in the China market.
Witness to Transformation posts on drugs can be found here.
