North Korean Munitions Factories Turn to Fishing to Generate Foreign Currency

2017-08-09
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Fishing boats are anchored in the North Korean port of Nampho in South Pyongan province in a file photo.
Fishing boats are anchored in the North Korean port of Nampho in South Pyongan province in a file photo.
AFP

Authorities in North Korea have tasked munitions factories with operating fishing vessels to generate hundreds of thousands of U.S. dollars for the isolated cash-strapped regime of leader Kim Jong-Un, sources inside the country said.

Though authorities have already assigned other general factories and firms to engage in activities that can earn hard-to-get foreign currency, they have allowed munitions factories continue to focus mainly on producing arms for North Korea until earlier this year, sources said.

The munitions factories are exporting the fish that they catch or selling them in local markets where they receive payment in Chinese renminbi or U.S. dollars.

Some munitions factories in Chongjin, capital of North Korea’s North Hamgyong province and the country’s third-largest city, are operating fishing vessels in the East Sea, also known as the Sea of Japan, sources said.

“The waters of Chongjin are full of munitions factories’ fishing vessels,” said a source from the province who requested anonymity. “Many fishing vessels from Base 317 of Department No. 6 under the Second Economic Committee are making an effort to earn foreign currency by catching squid.”

The military has other major fishery bases, including Okryu, Maebong, and Heemang, in Chongjin’s Sinjin Port, Saenaru Port, East Port, and West Port, he said.

“The Puyun munitions factory at Base 317 is new to the Sinjin Port, and its fishing vessels are there to earn foreign currency,” the source said.

The base is a military unit of the Puyun munitions factory in Chongjin’s Puyun district which used to produce weapons, the source said.

“Base 317 is on red alert to secure fishing vessels as soon as they are assigned to generate foreign currency,” he said.

Officials at the base are recruiting fishing vessels from other bases to work for them, the source said.

Base 317 owns three large 200-horsepower fishing vessels and operates smaller 22-horsepower boats and more than 40 32-horsepower barges, he said.

“Their assignment is to generate U.S. $2,000 a year per ship,” he said. “The base’s yearly assignment is to make U.S. $500,000.”

Foreign currency shortage?

The Second Economic Committee, which is in charge of North Korea’s military-defense industry and manages plants that produce small arms, ships, and aircraft, assigned the munitions factories, including Base 317, to take to the high seas to make money for the regime, sources said.

Run by the Central Committee of the Workers’ Party of Korea, the committee also oversees foreign arms and missile sales through several front companies to countries that have included Iran, Cuba, Sudan, Algeria, Pakistan, Syria, Libya, Egypt, the United Arab Emirates, and reportedly Myanmar.

North Korean residents are perplexed as to why the Second Economic Committee has assigned munition factories to undertake activities that generate foreign currency, sources said.

They have speculated that the country is slowing down its weapons production or experiencing a shortage of foreign currency, sources said.

Another source from North Hamgyong province told RFA that all Base 317’s fishing boats are in the East Sea to fish for squid before the fishing season ends this month.

“They are pushing themselves to accomplish their U.S. $500,000 goal,” said the source who requested anonymity.

“Base 317's fishing vessels operate in open waters 100 miles offshore for a month at a time,” he said. “Daily fishing activities cost them more because they have to bribe coastal security patrols or other state officials to obtain departure approval and pass inspections.”

The North Korean regime relies on foreign currency for business deals with its neighbor and main ally China and to purchase raw materials from abroad. Coal exports to China, North Korea’s largest trade partner, are thought to be the country’s greatest source of foreign currency.

North Korea has also sent its workers to Russia, China, and places farther afield such as the Middle East and Africa for years, requiring them to remit much of their earnings to the government, which is believed to use the cash to fund its illicit weapons programs.

Reported by Jieun Kim for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Roseanne Gerin.

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