While Chinese, South Korean and other Asian criminal networks have historically been active in the Democratic People's Republic of Korea (DPRK), traditionally the North Korean government was also a major participant in illegal activities. It is known to have been engaged in narcotics production and trafficking, people trafficking and currency forgery. However, as the country's planned economy implodes and social conditions deteriorate, the state finds itself increasingly unable to participate in or regulate these activities. And criminal gangs have been quick to pick up the slack.

The DPRK's involvement in organized crime dates back to at least the mid-1970s, when North Korean diplomats were first intercepted carrying hashish and opium out of the country. Overall, drug production and distribution were carried out on a relatively small scale, with revenues probably used to fund the country's cash-strapped diplomatic missions. In the mid-1990s, a series of poor harvests reduced poppy supply, and domestic economic conditions deteriorated sharply. Nearly all funding for diplomatic missions was cut off, and around this time the government became involved with methamphetamineproduction and distribution. 

Motivated by the need for foreign exchange, Pyongyang has also been implicated in a range of counterfeiting activities (.pdf), including pharmaceutical products, cigarettes and currency forgery. Many analysts believe the DPRK to be the source of so-called "superdollars" -- fake $100 bills whose quality exceeds that of the originals -- although the exact provenance of these forgeries has never been fully established.

Reports have also linked the North Korean state, particularly military units stationed along the country's northern border with China, with human trafficking -- largely, but not exclusively, of women. China's one-child policy has created a sizable gender imbalance among its population: There are currently around 120 males for every 100 females. As a result, a market for trafficked North Korean brides has emerged. North Korean women, who are especially vulnerable once they have entered China illegally, also work as prostitutes and under other forced labor conditions in Chinese cities, particularly those close to the DPRK border.

However, since around 2005, fundamental changes have been observed in the scale and dynamics of North Korean organized crime. The steady implosion of state industries in the planned economy and deteriorating socio-economic conditions have weakened the government's operational capabilities, while simultaneously fostering the conditions for organized criminal networks to assume a greater role in illegal activities. 

Reports suggest that government cadres are becoming increasingly corruptible, and organized gangs are operating with greater freedom in the country. For example, foreign customs agencies have noticed a reduction in officially produced narcotics coming out of the country, but a steady increase in privately manufactured product. North Korea's role as a supplier of military hardware on international black markets also seems to have diminished as state factories have been forced to close, while traditional criminal rackets such as counterfeit goods, drugs and prostitution have expanded both inside the country and across its borders.

Domestically, as state-provided rations have tailed off, black markets for legal goods have expanded. Similarly, the collapse of the state health system has increased the use of "medicinal methamphetamine," a phenomenon also seen in the 1990s. Rising poverty is also contributing to increasing domestic demand for drugs and forcing more women into prostitution. Moreover, criminal gangs have been able to move into abandoned industrial facilities and convert them into narcotics laboratories.

Notably, when the markets for illegal goods were controlled by the government, they were generally "for export only." The increasing lawlessness currently on display is indeed consolidating the country's position in transnational Asian criminal networks. However, as conditions worsen and criminal networks become more entrenched in the country, their activities are rapidly becoming major domestic problems as well.

Traditionally, China, as the DPRK's most important ally and protector, has turned a blind eye to such activities. And without China assuming a leadership role, the international community clearly has little chance of controlling these alarming developments. 

Of late, however, it appears that China is becoming more concerned by the implications for its own social situation of a deteriorating DPRK. More and more migrants and narcotics are crossing the hard-to-police China-DPRK border, and northeast China now has some of the country's highest drug abuse rates. Beijing has increased border controls and allowed greater reporting of cross-border smuggling activities into the public domain. 

Despite this, the Chinese authorities have yet to articulate a reasonable or responsible strategy for containing the issue. Beijing classifies North Korean defectors as economic, rather than political, migrants and routinely repatriates them. Moreover, China remains the most important market for the DPRK's criminal products, a situation that is likely to persist until domestic law enforcement improves. In fact, the recent expansion of gang activities in the DPRK may be related to growing legitimate Chinese business interests in the country, which often have close ties with Chinese and North Korean organized crime outfits.

Asia's dense organized crime networks are notoriously difficult to break down, particularly when they enjoy the protection of officials and business interests on both sides of the China-DPRK border. As such, until economic stability returns to the country, the alarming trend of growing organized criminal activities in the DPRK is likely to continue.

**Iain Mills is a Beijing-based freelance writer.