There couldn’t be a starker contrast. Since its first confirmed case of an infection in late January, South Korea has responded swiftly and decisively, setting in motion a series of medically and technologically effective measures in a comprehensive, ‘all-government’ strategy to contain the coronavirus. The state has been transparent in its messaging throughout the health crisis; as of 13 May, there had been 11 018 cases and 260 deaths, a remarkably low incidence and death rate compared to several Western countries.

By contrast, the peninsula’s communist autocracy, North Korea, in a vein that is consistent with its isolationist stance, has not disclosed how many have been infected with COVID-19 or how it has been countering the spread of the infection. Admittedly, North Korea was one of the first countries to suspend international travel, shutting its borders on 22 January and bringing public life to a standstill. The government’s Orwellian rumour mill has since maintained there has not been a single reported case. But, given its fragile health system which, presumably, severely limits its capacity to either test or treat, and its long border with China, which is penetrated by illicit traders and smugglers, a zero rate is highly unlikely. And China’s president is said to have expressed concern about the threat of the virus to the Asian giant’s impoverished neighbour, and offered to help.

As we have analyzed in other contexts, government interventions in response to the virus are likely to have the combined effect of both suppressing some organized criminal supply markets, while simultaneously allowing certain criminal enterprises the opportunity to exploit the crisis by adapting to the new COVID market dynamics. The same dynamics most likely apply to the Korean Peninsula.

Well before the world was hit by the pandemic, in the Korean Peninsula, organized crime started to become increasingly diversified and sophisticated, firstly, after the demise of the military regime in South Korea in 1987 – which ushered in an era of less stringent law enforcement – and, secondly, following increasing globalization and regional economic growth. Organized transnational crime has become a major concern facing the regional governments and the international community.

Around 1990, the Seoul government responded to the growing threat of criminal cartels by announcing a war on organized crime. One effect was that large cartels fragmented, downsizing in the face of the government’s crackdown in an attempt to diminish their footprint. According to a 2016 White Paper issued by the Korean national police agency, more than 3 000 individuals associated with a large number of organized-crime groups were arrested in 2015; a third of them were found to be members of newly established criminal groups. The proliferation and splintering of larger cartels into smaller gang clusters led to the emergence of a new territorial financial model of organized crime in South Korea. No longer predominantly bankrolled by their traditional revenue sources (e.g. money from drug sales), the gangs sought to generate cash from extortion in the turf they controlled, targeting especially local businesses.

Later, the Korean state’s efforts to disrupt overt gang territorialism and extortion – largely supported by intensive technological monitoring and tracing solutions (e.g. the installation of a high concentration of CCTVs in the major cities) – forced crime groups to repurpose themselves. They responded to the increasing state surveillance measures by diversifying into real estate, the gambling industry and financial loan services, where blackmail and corrupt relationships have enabled criminal groups to conceal to some degree their activities within the guise of legitimate businesses. They have also reportedly become increasingly transnational, forming coalitions with their counterparts in Japan, China, Hong Kong and the United States, and several countries in Southeast Asia. Today, many crime groups originating in South Korea are relocating overseas, posing a challenge to the Korean authorities in what may become an increasingly transnational problem for the region.

Sometimes likened to the last relic of the Cold War, in North Korea the dynamics of organized crime are somewhat different from those of its democratic, industrialized southern neighbour. For some analysts, the state itself is akin to a centralized, clan-run mafia organization, a mechanism whose primary purpose is funding and self-perpetuation – an anachronistic machine fuelled by a network of illicit activities and enterprises. The elites of the country – if one adheres to this idea of the North Korean state as a mafia  (and it’s a compelling argument, where others have sought to warn of North Korea as a menacing nuclear-weapon-wielding pariah) – maintain and perpetuate this self-serving, bloated system through the threat of violence and through corruption.

There have been numerous instances over the years of the North Korean state’s (and, in many cases, its diplomats’) involvement in smuggling legal goods and minerals; drug trafficking; manufacture and distribution of counterfeit pharmaceuticals; counterfeiting US dollars; human trafficking; arms trafficking; and smuggling gold and luxury goods. The list goes on.

More recently, some transnational organized criminal groups in the Korean Peninsula have been quick to identify ways of exploiting the shift in market landscape brought on by responses to the pandemic, particularly in cybercrime, fraud and smuggling.

For example, a number of scams have been reported, where fraudsters prey on their victims’ heightened vulnerability during the pandemic. In February, the South Korean government warned the public of a rise in scam text messages. The messages (known as smishing – a conflation of ‘SMS’ and ‘phishing’) use misinformation impersonating official COVID-19 messaging disseminated by government agencies. The messages purport to provide free face masks or healthcare support. Reportedly, nearly 10 000 such messages had been distributed by mid-February. Those who fall for the scam click on a link in the message, which allows malware to be installed on their cellphones, which then extracts personal financial information. South Korean police have carried out investigations and have warned the public about the fraud.

In another case of criminals exploiting the social dynamics during the pandemic, on 17 February, South Korea’s antitrust regulatory body found that several online sellers of face masks were trading in violation of fair trade laws amid surging demand for personal protective equipment triggered by widespread reaction to the virus. Traders were found to be hiking prices beyond reasonable, competitive market rates, or stockpiling masks and sanitizer in anticipation of higher future market prices. The government has imposed tough penalties on anti-competitive behaviour by vendors of such products.

Cross-border restrictions on movement, meanwhile, have had the effect of reducing human smuggling and trafficking activity between North Korea and China. North Korea’s underground economy has long relied on illicit trade flows with China, its largest trading partner. Along the 1 400-kilometre-long shared border with China operate a ‘robust flow’ of traders and smugglers.

To take just one example of trafficking along this border, a 2019 report by Korea Future Initiative reveals that 60 per cent of North Korean women refugees in China are subjected to sex trafficking, sexual slavery, sexual abuse, prostitution, cybersex trafficking, forced marriage and forced pregnancy.

The US has described North Korea as one of the worst nations for human trafficking. US Secretary of State Mike Pompeo said in 2019 that the North Korean government ‘subjects its own citizens to forced labor both at home and abroad, and then uses proceeds to fund nefarious activities’. North Koreans are able to facilitate human trafficking and smuggling to China through cooperation with border guards and by bribing soldiers to turn a blind eye.

The arrival of the pandemic appears to have disrupted such arrangements. According to North Korean portal 38North, the country all but closed its border to China on 27 January to mitigate the spread of the virus, allowing one checkpoint to remain open to allow imports of essential goods. In early February, North Korean sources reported that the leader, Kim Jong Un, ordered violators of these quarantine regulations to be dealt with by applying military law, and that soldiers and police officers in the border area who violated the order would be executed. The organized criminal groups arranging for both human trafficking and smuggling of North Korean defectors into China appear to be pausing, holding their breath at this uncertain time, and refraining from activities.

The pandemic has also forced up prices of smuggled essential goods owing to diminished supply. The volume of smuggling with China decreased in January because of the border restrictions, significantly reducing the volume of goods entering North Korea. According to sources, the price of rice imported on the black market doubled, and prices of other daily necessities, such as flour, cooking oil, sugar and gasoline, suddenly rose by between 20 and 60 per cent. These price fluctuations will be a major blow to North Koreans who make a living by smuggling at the North Korea–China border, and may lead to heightened food insecurity and social chaos due to shortages of basic commodities.

In terms of cross-border smuggling of goods moving in the other direction, the picture is unclear, like much of the information that emerges from the closed communist regime. However, if official trade exports to China, which declined by a massive 72 per cent in January and February, are any indication, it is probable that there has also been a decline in smuggling by North Korea. There is anecdotal evidence to suggest that smuggling has decreased as well as official trade. If that is the case, we could expect the economic decline in North Korea to be steeper, that it will struggle even more to pay off its large national debt and that its citizens will face even tougher economic austerity in future months.

These snapshots of the Korean Peninsula, as with elsewhere in the world, make clear the long-term implications of policy choices in response to COVID. South Korea looks likely to rebound, having minimalized both the public health and economic consequences of the virus, and the efficacy of the response is likely to build trust in the state and its institutions, allowing it to message effectively around the issue of counterfeit products and disinformation. By contrast, in North Korea, a highly securitized approach may have effectively sealed borders and reduced illicit trade for the time being, but at the same time human insecurity is likely to heighten even further.

Cover: Anton Strogonoff – Seoul (21 March 2020)

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Authors

Joongyoung Hahm

Joongyoung Hahm is a specially appointed professor at the Graduate School of International Studies (GSIS) in Hanyang University in Seoul, Republic of Korea.

In his 30 years career, he had served as a diplomat, government official, UN professional at UNODC and researcher in Institute for National Security Strategy (INSS) mainly focusing on the Transnational Organized Crime and Terrorism. He holds a Ph. D. majoring in International Relations (IR) from the Hankook University of Foreign Studies (HUFS) and teaches at the Hanyang University and HUFS.

As a member of the Korea Association of National Intelligence Studies he is researching and writing articles especially on the North Korean illegal activities which is related to the TOC at large. He is also much interested in the issue of North Korean defectors, mostly women who are escaping to China and being sold as victims of human traffickers.

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Mark Ronan

Mark Ronan is senior editor at the Global Initiative Against Transnational Organized Crime, where he coordinates the editorial production and copy editing of the GI’s reports, papers and online communications.

His role at the Global Initiative is to oversee editorial best practice, by helping develop high-quality publications in line with the organisation’s strategic communication goals, by supporting the network of experts on editorial content and by mentoring staff.

He has over 20 years’ experience in the publishing industry. Since 2007, Mark has been a freelance editor and journalist, providing editorial and writing services to several international research organizations and publishing houses.

He writes an editorial column on trade, business and economic relations between South Africa and China for the Hong Kong Trade Development Council and has reported on issues such as China’s illegal ivory trade, abalone smuggling from South Africa to Asia and Beijing’s One Belt, One Road trade policy in terms of how it impinges on Africa.

In the UK, Mark worked for several years as a managing editor / operations manager of technical journals for a range of specialized readerships.

Mark has a degree in modern languages from Oxford University, and has worked in the media ever since graduating.

He is based in Cape Town, where he started a publishing consultancy that project-manages the editorial production of manuscripts for several South African and UK publishing houses and research organisations.

He speaks reasonably good, but increasingly rusty French and Italian, and has a pathological obsession with correct English language usage.

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