Kim Jong Il’s Support Infrastructure is Shut Down

October 18th, 2012

According to reports from Japanese news agency Kyodo News, North Korea has reportedly shut down its illicit fundraising and mysterious gift-purchasing offices. “Office 38″ for long operated as the major procurer of luxury goods for  Kim Jong Il, operating in conjunction with “Office 39″, a bureau in charge of bringing in foreign currency through drugs, weapons and other nefarious means.

For months the two offices had been the cause of a great deal of speculation and mystery for observers, even by North Korean standards. Office 38 had been responsible for acquiring the myriad luxury goods Kim enjoyed throughout his time on the throne, but also provided a steady stream of gifts to dole out to supporters in the upper echelons of the country.  Many analysts have attributed the work of this office in understanding how the Kim family successfully held on to power for so long  – through literally buying off support from elite families throughout the country.

For its part, Office 39 was  responsible for a number of extremely profitable – but extremely illegal – enterprises. These included drug trafficking, counterfeiting US $100 bills (called “super bills” because of their high quality), and even counterfeiting cigarettes.  But this office was also responsible for taking in money through legal means, via front companies which included a number of overseas restaurants. The money earned from these deals went into what was essentially a slush fund for the Kim family, but also reportedly helped fund a wide range of nuclear and missile programs.

While closing the offices might seem like a positive step, it seems they will be quickly be replaced by a new entity.  Already Kyodo have reported that their responsibilities will be “transferred to a new entity called the Moranbong Bureau, believed to belong to the cabinet.”

Daniel Pinkston, senior analyst with International Crisis Group in Seoul, says that the move “can be seen as a natural development. As [Kim Jong Un] puts together his own coalition, this is another way of easing out the old guard and moving his people in.”

So while Office 38 and 39 may be closing, this doesn’t mean that much will change. Taken together with reports that three ministers have been replaced in the past two weeks, Pinkston is almost certainly correct that the changes amount to something that might resemble a cabinet reshuffle in more democratic countries.

Though things with the leadership have seemed on the surface fairly stable since Military General Ri Yong Ho’s removal in July, this serves as a reminder that the succession process is still ongoing.

Picture from NK Leadership Watch