An insurance business in North Korea is being managed as one of the socialist economic systems so that all factories, farms should insure their properties with the state. They should pay a certain portion of their income as a premium for that insurance and the state itself uses those resources for the socialist policies, free medical care, free education, etc.
Based on this socialist insurance system, which is run in North Korean won, we just re-insure with foreign companies and we pay a higher premium to them. When there are accidents, disasters or whatever, in North Korea we claim these damages and earn foreign cash, U.S. dollars. We receive U.S. dollars and give it to Kim Jong Il as his birthday present.
[Kim Jong Il (1941 – 2011) succeeded his father and led North Korea from 1994 until his death in 2011. In the September/October 2011 edition of World Affairs, Kim Kwang-jin reveals the North Korean regime’s systematic falsification of insurance claims for foreign cash.]
So the internal insurance business is legitimate of course, according to their socialist system. But our re-insurance operation is to make foreign cash based on that internal business and then to raise funds for Kim Jong Il’s rule. So this is not legitimate business in terms of North Korean law and in terms of socialist principles. With this foreign cash and resources, Kim Jong Il and the Kim family invest in their own priorities. Their utmost priority is developing missiles and a nuclear program. They are using the lion’s share of these resources for that and then they are living a luxurious life. So this is how they invest and use this money.
They are also keeping their funds abroad in secret accounts. They are also buying [Mercedes] Benzes, Omega watches, all these luxury goods for the elite to buy their loyalty. So he uses his money for these things.
In September 2003, Kim Kwang-jin and his family rushed to an airport in Southeast Asia to fly to freedom in Seoul, South Korea. Months earlier, Kim lived a privileged life working for the government’s overseas banking operations in Singapore. Then Kim fell out of favor after he was suspected of leaking information about the regime to foreign nationals. Before being summoned back to North Korea face severe punishment, Kim made the decision to defect with his family.
During his banking career, Kim helped earn millions of dollars for what he calls North Korea’s “Royal Court Economy,” i.e., the enterprises and often illegal schemes that financially supported the country’s totalitarian dictatorship.
Since defecting, Kim Kwang-jin helped expose the North Korean government’s underhanded financial practices. He has also become an advocate for North Korean freedom and human rights. Kim currently works at the Institute for National Security Strategy in Seoul and is a columnist for Radio Free Asia.
North Korea (the Democratic People’s Republic of Korea) is a country of 23 million people in northeast Asia, ruled by Communist dictator Kim Jong-Un. His deceased predecessors—father, Kim Jong-Il, and grandfather, Kim Il-Sung – respectively retain the titles of “Eternal President” and “The Great Leader.”
The Korean War began in 1950, when Kim Il-Sung, backed by the Soviet Union and China, attacked South Korea. The conflict ended in a cease-fire rather than a peace treaty, and the border between the two Koreas remains tense and heavily militarized.
Kim Il-Sung employed harsh tactics to consolidate his power and propagated an extreme personality cult that has been continued by his successors. A blend of communist doctrine, state terror, xenophobia and hyper-nationalism has given North Korea its unique ideology. Despite some recent openings, North Korea remains largely isolated from the rest of the world.
With the end of Soviet communism and withdrawal of economic support, North Korea’s economy collapsed in the 1990s. A massive famine, aggravated by the regime’s indifference, killed as many as 2 million people between 1994 and 1998. While conditions have improved, even today, North Korea faces problems of malnutrition and insufficient access to food.
Tensions between North and South Korea remain high. In 2010, North Korea sank a South Korean naval vessel, killing 46 sailors and attacked a South Korean island, killing four civilians. North Korea has developed and tested nuclear weapons in contravention of several international agreements. The country withdrew from the Nuclear Non-Proliferation Treaty in 2003 in order to test ballistic missiles and eventually a nuclear device. Multilateral negotiations have so far failed to constrain North Korea’s arms buildup and nuclear program.
North Korea is among the world’s most repressive states, engaging in widespread and systematic human rights violations, including extrajudicial executions, torture, forced abortion, arbitrary detention, and denial of the rights of expression, association, assembly, and religion. The government pervasively regulates all aspects of the lives of its citizens, each of whom is categorized as “core,” “wavering,” or “hostile,” according to the history of his or her family’s relationship with the regime. Access to housing, employment, education, and other social and economic goods depend heavily on these security classifications. The government determines where each citizen will live, and travel within the country is strictly limited.
Emigration is prohibited. Refugees who have escaped to China have frequently been forcibly returned to North Korea where they are imprisoned, subjected to torture and other ill-treatment, and sometimes executed. The government operates a network of forced labor camps for an estimated 120,000 political prisoners. While persons convicted of ordinary crimes serve fixed sentences, those convicted of political crimes are confined indefinitely. Punishment is extended to three generations – the offender’s parents, siblings, and children are also incarcerated, as a way to pressure North Koreans to conform. Political offenders are often denied food, clothing, and medical care, and many die in prison.
Freedom House’s Freedom in the World report classifies North Korea as “not free” and as one of nine nations whose lack of political rights and civil liberties are considered the “worst of the worst.”
See all North Korea videos