Japanese colonial government that controlled the Korean Peninsula before World War II. Their descendants now work in mines and factories. They are not allowed into universities.
Besides dictating career opportunities, the system shaped geographic destiny, with the core class allowed to live in and around Pyongyang. Many members of the hostile class were resettled to distant provinces along the Chinese border. Some members of the wavering class could move up in the system by joining the Korean People’s Army, serving with distinction and, with luck and connections, securing a lower rung in the ruling party.
Rapid growth of private markets made some traders from the wavering and hostile classes wealthy, allowing them to buy and bribe their way into better living standards than some of the political elite.[8]
For government positions, though, family background decided nearly everything, including who had the right to throw stones at Shin.
The only North Koreans considered trustworthy enough to become guards in political prison camps were men like An Myeong Chul, the son of a North Korean intelligence officer.
He was recruited into the Bowibu at nineteen, after two years of military service. As part of the process, the loyalty of his entire extended family was checked. He was also required to sign a document saying he would never disclose the existence of the camps. Sixty per cent of the two hundred young men who were recruited with him as guards were also the sons of intelligence officers.
An worked as a guard and driver in four labour camps (not including Camp 14) for seven years in the late 1980s and early 1990s. He fled to China in 1994 after his father, who supervised regional food distribution, ran afoul of his superiors and committed suicide. After finding his way to South Korea, An found work as a banker in Seoul and married a South Korean woman. They have two children. He also became a human rights activist.
After his defection he learned that his sister and brother were sent to a labour camp, where his brother later died.
When we spoke at a Chinese dinner in Seoul in 2009, An wore a dark blue suit, white shirt, striped tie and half-frame glasses. He looked prosperous and spoke in a quiet, careful way.
When he was training to be a guard, he studied the Korean martial art of tae kwon do, learned riot- suppression techniques and was instructed not to worry if his treatment of prisoners caused injury or death. In the camps, he became accustomed to hitting prisoners who did not meet work quotas. He remembers beating up a hunchbacked prisoner.
‘It was normal to beat prisoners,’ he said, explaining that his instructors taught him never to smile and to think of inmates as ‘dogs and pigs’.
‘We were taught not to think of them as human beings,’ he said. ‘The instructors told us not to show pity. They said, “If you do, you will become a prisoner.”’
Although pity was forbidden, there were few other guidelines for treatment of prisoners. As a result, An said, guards were free to indulge their appetites and eccentricities, often preying on attractive young female prisoners who would usually consent to sex in exchange for better treatment.
‘If this resulted in babies, women and their babies were killed,’ An said, noting that he had personally seen newborns clubbed to death with iron rods. ‘The theory behind the camps was to cleanse unto three generations the families of incorrect thinkers. So it was inconsistent to allow another generation to be born.’
Guards could win admission to college if they caught an inmate trying to escape — an incentive system that ambitious guards seized upon. Sometimes they would enable prisoners to make an escape attempt, An said, and shoot them before they reached the fences that surround the camps.
Most often, though, prisoners were beaten, sometimes to death, simply because guards were bored or in a sour mood.
Although prison guards and their legitimate children belong by blood to the core class, they are fringe functionaries locked away for most of their working lives in the freezing hinterlands.
The core of the core live in Pyongyang in large apartments or single-family homes located in gated neighbourhoods. Outsiders do not know with any certainty how many of these elite there are in North Korea, but South Korean and American scholars believe they are a tiny fraction of the country’s population, numbering between one and two hundred thousand out of twenty-three million.
Trusted and talented members of the elite are periodically allowed outside the country, where they serve as diplomats and traders for state-owned companies. In the past decade, the United States government and law enforcement agencies around the world have documented that some of these North Koreans are involved in criminal enterprises that funnel hard currency to Pyongyang.
They have been linked to counterfeiting hundred-dollar bills, cyberterrorism, trafficking drugs ranging from heroin to Viagra, and marketing high-quality brand-name (but counterfeit) cigarettes. According to UN officials, and in violation of United Nations resolutions, North Koreans have also sold rockets and nuclear weapons technology to countries including Iran and Syria.
One well-travelled member of the North Korean elite told me how he earned his keep while securing the support and affections of Kim Jong Il. His name is Kim Kwang Jin and he grew up in Pyongyang as a member of the blue-blood elite. He studied British literature at Kim Il Sung University, which is reserved for children of top officials. His professional expertise, before defecting to South Korea in 2003, was managing a state-run global insurance fraud. It collected hundreds of millions of dollars from some of the world’s largest insurance companies on falsified claims for industrial accidents and natural disasters inside North Korea, and it funnelled most of the money to the Dear Leader.
The festive annual highlight of this scheme took place in the week before Kim Jong Il’s birthday on 16 February. Foreign-based executives of the Korean National Insurance Corporation, the state monopoly that orchestrated the fraud, prepared a special birthday gift.
From his office in Singapore, Kim Kwang Jin watched in early February 2003 as his colleagues stuffed twenty million dollars in cash into two heavy-duty bags and sent them, via Beijing, to Pyongyang. This was money that had been paid by international insurance companies, and it was not a one-time offering. Kim said that in the five years he was based in Pyongyang for the state insurance corporation, bags of cash always arrived in time for his leader’s birthday. He said they came from Switzerland, France and Austria, as well as from Singapore.
The money, he said, was delivered to Office 39 of the Korean Workers’ Party Central Committee. This infamous office or bureau was created by Kim Jong Il in the 1970s to collect hard currency and to give him a power base independent of his father, who was then still running the country. According to Kim (and scores of other defectors and published accounts), Office 39 buys luxury goods to secure the loyalty of the North Korean elite. It also funds the purchase of foreign-made components for missiles and other weapons programmes.
As Kim explained it to me, his country’s insurance scam worked like this: Pyongyang-based managers for the state insurance monopoly would write policies that covered costly but common North Korean disasters such as mining accidents, train crashes and crop losses resulting from floods. ‘The major point of the reinsurance operation is that they are banking on disaster,’ he said. ‘Whenever there is a disaster, it becomes a source of hard currency’ for the government.
Kim and other foreign-based operatives of the North Korean insurance company were dispatched around the globe to find insurance brokers who would accept seductively high insurance premiums to compensate North Korea for the cost of these disasters.
Reinsurance is a multibillion-dollar industry that spreads the risk assumed by one insurance company to a number of companies around the world. Each year, Kim said, North Korea would do its best to shuffle its offerings among the major reinsurance players.
‘We pass it around,’ he told me. ‘One year it might be Lloyd’s [of London]. The next year it might be Swiss Re.’
By spreading relatively moderate losses among many big companies, North Korea concealed how bad a risk it was. Its government prepared meticulously documented claims, rushed them through its puppet court, and demanded immediate payment. But it often restricted the ability of reinsurers to dispatch investigators to verify claims. According to a London-based expert on the insurance industry, North Korea also exploited the geographical ignorance and political naivete of some reinsurers and their brokers. Many of them thought they were dealing with a firm from South Korea, the expert said, while others were unaware that North Korea is a closed totalitarian state with sham courts and no international accountability.
Over time, reinsurance companies got wise to frequent and costly claims for train crashes and ferry
