August 16, 2022

Funding a DPRK diplomatic deficit: Cigarettes, alcohol and hashish

How North Korea's Scandinavia based diplomats resorted to creative means to generate revenues during 1970s

In 1975, Japan’s External Trade Organization (JETRO), conducted a study that found North Korea with a $600 million trade deficit to Western countries. It paved the way for North Korea to become the first country in the Communist Bloc to default on its debts to the West, which refuted the then-common supposition that Communist countries repay their debts and make good borrowers.

After Western companies discovered that trading with North Korea was more trouble than it was worth, Pyongyang had to invent new ways to earn hard currency. One of the ways in which the regime earned foreign exchange was through the illicit activities of diplomats, which was convenient for Pyongyang since North Korean embassies were scattered across the world as a result of the inter-Korean competition for votes in the United Nations during the 1960s and 1970s.