[Exclusive Full Interview] Interview with Ri Jong-ho, Highest-Ranking North Korean Defector (2017)

Ri Jong-ho, a former senior official in North Korea's ruling Workers’ Party Office 39, who defected via South Korea and arrived in the United States in 2016, has given his first media interview, marking the beginning of his public activities. Before his defection, Mr. Ri held key positions such as President of the Daehung Shipping Company, Executive Director of the Trade Management Bureau under the Daehung General Bureau, and Chairman of the Korea Kumgang Economic Development Group. He was the head of the Daehung Corporation branch in Dalian, China before his defection and was awarded “Labor Hero” highest civilian honor in North Korea in 2002. Ri played a pivotal role in foreign trade with China, Russia, and Japan—dealing in minerals, oil, and seafood—and even led efforts to attract Hong Kong capital to explore oil in North Korea’s western seas.

[Full Interview]

Journalist: To start, I’d like to express my gratitude for your willingness to participate in this interview. 

Ri Jong-ho: Thank you as well.

Journalist: Please begin by introducing the work you did before leaving North Korea.

Ri Jong-ho: My name is Ri Jong-ho. For the past 30 years, I worked in central agencies directly under the Workers’ Party of North Korea. From 1998 to 2004, I served for 7 years as Executive Director of the Trade Management Bureau under the Daehung General Bureau of Office 39. In 2007, I was appointed by Chairman Kim Jong-il as Chairman of the Korea Kumgang Economic Development Group, affiliated with the National Defense Commission. Before defecting, I was the head of the Daehung Group’s Dalian office in China. I settled in South Korea in October 2014 and then came to the United States in March 2016. I was awarded the Labor Hero title in 2002, North Korea's highest civilian honor, and received a master’s degree in economics after publishing a paper in 2004 on North Korean's economic reform strategies.

Journalist: You held senior posts in North Korea. What motivated your decision to defect?

Ri Jong-ho: The year I defected, 2014, was an extremely brutal period. After the execution of Jang Song-thaek, there were mass purges of high-level officials. Hundreds of his close associates and their families were executed by anti-aircraft guns, and thousands were purged. I personally knew several high-ranking officials who were executed in this horrific way, and even our children’s friends were dragged off to political prison camps. That was a tremendous shock to my family and me. We could no longer bear to witness such tragedies.

Journalist: But such purges and executions also occurred during the reigns of Kim Il-sung and Kim Jong-il, didn’t they?

Ri Jong-ho: Yes, there were purges and executions during their times as well. However, I never witnessed anything as unprecedented and barbaric as what occurred under Kim Jong-un. I never imagined such horrors could unfold under a socialist system.

Journalist: So before witnessing those events, had you ever even vaguely considered defecting?

Ri Jong-ho: Not at all. Before those incidents, I considered myself quite patriotic. I often looked at our underdeveloped homeland with sorrow and tried to contribute meaningfully to North Korea’s economic development through productive business initiatives.

Journalist: You worked in Dalian, China. What kind of work did the Daehung Corporation's Dalian branch do?

Ri Jong-ho: All North Korean overseas branches, not just those of Office 39, are expected to propose beneficial initiatives to develop their headquarters, provide information on new technologies and products, and carry out projects to advance the country's prosperity. I performed many such beneficial tasks in line with those responsibilities.

Journalist: This is the first time a high-ranking Office 39 official is speaking publicly. While you say you did beneficial work, Office 39 is generally seen as managing the North Korean regime’s slush funds. Could you explain what this organization actually does?

Ri Jong-ho: I’ve heard that perception too, but it’s not accurate. The official function of Office 39 in North Korea is to manage governance funds for the country's leadership and oversee foreign-currency-earning production and trade. The direct superior is the Supreme Leader himself. Because North Korea is so opaque, it’s difficult for the outside world to understand it clearly.

Journalist: How many people work under Office 39, and what kind of organizational structure does it have?

Ri Jong-ho: Office 39 has hundreds of thousands of people under its system. North Korea operates under a unique system where the Workers’ Party leads every sector of the country. Thus, Office 39 has structured branches across all provinces, cities, and counties. The central agencies include the Kumgang General Bureau, Daehung General Bureau, Daesong General Bureau, Daesong Bank, and External Construction Bureau, as well as departments like Moran, Sunbong, Daekyung, Yukyong, and Nakwon. It also oversees foreign-ship agencies and companies like Chogwang Cheonmyong. Organizations like the Rungra and Eunha General Bureaus and the 828 Trading Company operate under its policy direction. Depending on the size, the heads of these central agencies are treated at the ministerial or vice-ministerial level.

Journalist: Earlier, you said Office 39 is not as secretive as people think. But externally, it's known as a hub of North Korea’s illicit economy and slush fund operations. How do you respond to that?

Ri Jong-ho: Yes, I’m aware of that perception, but the North Korean leadership strictly prohibits Office 39 from engaging in illegal economic activities. They believe that even small illegal actions could jeopardize larger objectives and damage the image of the Workers’ Party. That’s why, for example, Daehung General Bureau stopped producing and exporting drugs about 25 years ago. The drugs, counterfeit currency, and fake cigarettes that some people talk about now are the work of entirely different special units, unrelated to Office 39. Office 39 legally operates a vast organizational system for earning foreign currency through production and trade, and it even manages formal banking activities. However, because it cannot access international banking systems, it opens personal or borrowed-name accounts to conduct transactions.

Journalist: From the outside, it’s these borrowed-name accounts that raise suspicions—people believe they are used to funnel funds to North Korea’s nuclear and missile programs. Since you mentioned such accounts, who helps set them up, and where are they opened?

Ri Jong-ho: Well, North Koreans in trade have their foreign partners. They persuade those partners to help them open borrowed-name accounts. They also set up multiple personal accounts. Because sanctions have blocked many financial routes, they’re simply trying to find alternate paths.

Journalist: Daehung General Bureau is known as one of North Korea’s top foreign-currency-generating institutions. You worked there too, right?

Ri Jong-ho: Yes, that’s correct. Daehung General Bureau is a central agency under Office 39 that sets foreign-currency-earning policies and oversees the implementation of production and trade activities. It has regional Daehung Management Bureaus in each province and local Daehung No. 5 departments in each city and county, along with hundreds of enterprises including seafood companies. Tens of thousands of workers are employed under its umbrella.

Journalist: The Trade Management Bureau and the Shipping Company under Daehung General Bureau are engaged in trade with foreign countries, correct?

Ri Jong-ho: Yes. The Trade Management Bureau operated externally as the Korea Daehung Trading Corporation. I served as its Executive Director for seven years. It managed four trading companies, multiple processing factories, and about ten trade ships. We conducted various trade operations. For example, we had state monopoly rights over exporting pine mushrooms and red king crabs, and sent delegations to Japan annually. I also visited Japan multiple times as company President.

Journalist: The Korea Kumgang Economic Development Group, also known as KKG, has drawn attention. In the U.S., doing business with it can get you sanctioned. It’s quite a secretive entity—is it under Office 39 too?

Ri Jong-ho: As reported in the media, the Korea Kumgang Economic Development Group is not part of Office 39. However, as a member of Office 39, I attracted investment from a Hong Kong company and proposed the company’s establishment and development to Chairman Kim Jong-il, which led to its founding. KKG is affiliated with the National Defense Commission and is a joint venture with China Sonangol International Holding Ltd from Hong Kong. KKG completed oil exploration in North Korea’s western sea and agreed to build six thermal power plants with a combined capacity of 300 MW, but the project did not progress. At the time, the power plant project alone was worth about $1.5 billion. Other projects included modernization plans for steel and cement factories, mines, the fisheries industry, research institutions, and banks. I served as chairman of the joint-venture in 2007.

Journalist: You’ve had an up-close view of North Korea’s export industry. One of the most important sectors is mineral exports. What’s the scale and nature of those operations?

Ri Jong-ho: North Korea’s exports are primarily resource-based, focusing on coal, iron ore, and seafood. Annual exports reach about $3 billion, with mineral exports accounting for around 45% of that total.

Journalist: So coal is a major export. That would require extensive mining. What’s the scale of North Korea’s coal mines, and what are the working conditions like?

Ri Jong-ho: Frankly, most of North Korea’s coal mines are neither large-scale nor well-equipped. Working conditions are very poor, and productivity is low. However, when demand for coal surged around the 2008 Beijing Olympics, everyone rushed to export coal, and hundreds of small-scale mines sprang up. Some of these mines even employed homeless children—called kkotjaebi—offering them food in exchange for labor, which stirred controversy.

Journalist: That’s illegal even under North Korean law, right?

Ri Jong-ho: Yes, that’s illegal. But even though the state tries to regulate it, such practices haven’t stopped.

Journalist: So we can say that the proportion of anthracite coal exports is excessively high compared to other exports?

Ri Jong-ho: That’s right. There has been growing criticism within North Korea that excessive coal exports are depleting national resources. In response, the government introduced a quota system to limit anthracite exports to 5 million tons per year starting in 2008.

Journalist: That was the official quota, but wasn’t the actual export volume much higher?

Ri Jong-ho: Yes, that’s true. Despite the quota, the military and Workers’ Party administration led efforts to increase coal exports, and by 2013, annual anthracite exports exceeded 10 million tons. This led to large-scale purges of Workers’ Party officials. One of the main accusations was that they sold coal cheaply, draining the country’s resources. The leadership considers this a very serious issue.

Journalist: Specifically, by how much did anthracite exports increase?

Ri Jong-ho: In 2016, North Korea’s anthracite coal exports were estimated to reach around 22 million tons, with total export revenues of about $1.2 billion. That’s four times the official annual export quota and double the amount exported in 2013. This clearly indicates that North Korea’s economic situation was not good at the time.

Journalist: It sounds like North Korea’s economy is overly dependent on a few key sectors, and if one fails, the whole system could collapse. Did you witness such vulnerabilities firsthand?

Ri Jong-ho: Yes. North Korea’s current economic structure heavily relies on resource exports. If mineral exports are halted, numerous coal mines and mining facilities would shut down, and all related businesses—including factories, restaurants, and shops—would suffer. When the Workers’ Party administration was purged in December 2013, coal exports were temporarily suspended for a few months. During that time, I personally witnessed Pyongyang’s markets, restaurants, stores, and service sectors suffer serious downturns.

Journalist: That was over just three months. If sanctions entirely block mineral exports, what would happen specifically in North Korea?

Ri Jong-ho: As I mentioned earlier, the direct hit would be on the coal and mining sectors and all associated industries. We estimate that hundreds of thousands of people would be affected. If coal production drops, power plants that rely on coal will also reduce output. North Korea’s total power generation is about 2.5 million KW, which is only enough for one city in most countries. In such a fragile system, reduced power output would severely impact countless factories, companies, restaurants, shops, and services across the country. This is a recurring problem in North Korea. Additionally, the amount of foreign currency circulating among individuals is estimated to be around $5 billion. If mineral exports are blocked and foreign currency stops flowing in, people will quickly tighten their wallets, and the impact will snowball.

Journalist: That describes the broader social impact of sanctions. But there’s debate about whether sanctions really affect the top leadership. What do you think?

Ri Jong-ho: Sanctions do significantly affect the leadership. Most companies involved in mineral exports are military-run or linked to special institutions. Revenue from minerals funds major construction projects, nuclear and missile development, and even military operating costs. If that revenue stream is cut, the leadership will inevitably be affected. Continued sanctions will weaken the regime’s control, expand private market activity, and lead to widespread corruption and disorder. This indicates a weakening of the regime’s grip and a crumbling of the leader-centered system.

Journalist: North Korea claims its nuclear weapons are aimed at deterring the United States. But have you ever heard discussions suggesting they might actually target South Korea?

Ri Jong-ho: Yes. I can read the thinking of the leadership fairly well. When North Korea threatens to strike the U.S. with nuclear weapons or missiles, its true intentions lie elsewhere. If sanctions and pressure become unbearable, the leadership might, as a last resort, attempt to unify the Korean Peninsula by launching a nuclear attack on South Korea. Their primary nuclear target is, without a doubt, South Korea. That has always been the case.

Journalist: Do officials openly talk about South Korea being the nuclear target—during leadership meetings, for example?

Ri Jong-ho: Internally, it is discussed all the time. All high-ranking elites and the military know it. Some media and experts in South Korea are dangerously complacent, but North Korea’s true adversary is South Korea. The North has always defined the South as the main target.

Journalist: That’s why the U.S. keeps urging China to exert more influence over North Korea. Given your experience with Chinese businesspeople, did you get any sense—direct or indirect—of China’s willingness to enforce sanctions?

Ri Jong-ho: I don’t believe China will continue to align with the U.S. on sanctions. China’s strategic goals differ. Its real ambition is to bring the entire Korean Peninsula under its sphere of influence, using North Korea as a tool to eventually draw South Korea closer to Beijing. China has nothing to gain from the collapse of the North Korean regime. If the regime falls and South Korea or the U.S. fills that vacuum, China ends up with nothing—what we call “a dog chasing a chicken for nothing.” So I believe China will not cross the red line. And the North Korean leadership is very aware of China’s strategic dilemma and actively exploits it.

Journalist: Let’s pivot back to economics. There have been multiple reports about a sharp increase in gasoline prices at gas stations in Pyongyang. What’s causing that?

Ri Jong-ho: Yes, I’ve seen reports about fuel prices rising sharply at Pyongyang gas stations. That’s likely due to disruptions in gasoline imports from China via oil tankers.

Journalist: Through what channels does oil enter North Korea? How much oil does China provide as aid?

Ri Jong-ho: Most of North Korea’s oil comes via tankers from Russia’s Far East ports like Vladivostok and Nakhodka, and also from China. North Korea imports between 200,000 to 300,000 tons of oil annually from Russia, and another 50,000 to 100,000 tons of gasoline from China. All the oil sold in Pyongyang gas stations and used nationwide is essentially imported by tankers from these two countries. Additionally, China supplies about 500,000 tons of crude oil annually through a pipeline. This is processed at Bonghwa Chemical Factory, which yields about 100,000 tons of gasoline and 100,000 tons of diesel, along with lubricants, naphtha, and other chemical products. But the amount usable in trucks, cars, and tanks totals only about 200,000 tons, most of which is allocated to the military or stockpiled.

Journalist: So most of North Korea’s oil is imported. Recently, the U.S. Secretary of State said countries supplying oil to North Korea would be severely sanctioned. What impact would that have?

Ri Jong-ho: If the U.S. actually enforces such sanctions and blocks oil imports, the North Korean regime will suffer devastating consequences. Blocking the tanker routes from Russia and China would be like cutting off the regime’s lifeline.

Journalist: You were involved in North Korea’s oil imports, correct? Can you explain how those transactions work and who the partners are?

Ri Jong-ho: From 1997 to 2005, I was involved in operating three oil tankers—Daehung-6, Daehung-7, and Daehung-12—for oil import transactions from Russia. At that time, North Korea had only one oil tanker, and we pioneered this system. I became quite familiar with the oil import structure and tanker movements. Singapore is the hub of Asian oil trade, so we signed contracts with Singaporean companies and imported oil from Russia through them.

Journalist: Could you elaborate on how those deals were structured?

Ri Jong-ho: First, we signed oil contracts with Singaporean companies. Then, those companies would make sub-contracts with Russian oil companies and earn a margin in the process.

Journalist: Do you think that kind of transaction is still ongoing?

Ri Jong-ho: I believe so. Those tankers are still moving.

Journalist: Despite international sanctions?

Ri Jong-ho: Yes, exactly.

Journalist: Some say that under Kim Jong-un’s leadership, the North Korean economy has improved. People returning from Pyongyang mention new construction projects and suggest the regime may have more economic capacity. What is the reality?

Ri Jong-ho: It’s true that people’s lives in North Korea have improved somewhat. Modern buildings are indeed going up in areas like Ryomyong Street in Pyongyang. But I don’t believe this is the result of improved leadership or economic policy. What’s really happening is that the regime is pouring all national resources and capital into showcase construction projects in Pyongyang. From an economic standpoint, North Korea’s foundation remains extremely fragile, so the relative cost of these projects is very high.

Journalist: So the apparent improvement in the economy isn’t because of policy change, but rather the unintended expansion of the market?

Ri Jong-ho: Yes, that’s how I see it. The apparent economic growth comes from people having built independent lives outside the state system over the past 20 years. They’ve strengthened their personal foundations and expanded their space for market activity. Another reason is that the number of institutions, enterprises, shops, and restaurants earning foreign currency has increased severalfold over the past decade. These operate on market principles, compete, and pursue profit. That’s likely why the economy seems more active.

Journalist: So should we call that North Korea’s economy—or just Pyongyang’s?

Ri Jong-ho: It’s more concentrated in Pyongyang, but other regional cities are also experiencing increased activity. However, this clashes with the principles of the North Korean system. Despite the market’s growth, the regime does not legally recognize private economic freedom or property rights. Another reason for the recent boom is the massive influx of foreign currency due to increased mineral exports—two to three times higher than before. This money is being invested in Pyongyang’s construction and has flowed into the pockets of rising elites and wealthy individuals, boosting consumption and market activity. But exporting resources at this scale risks depleting them, which could stop the economy altogether. If mineral exports decline, the economic situation could contract sharply.

Journalist: We’ve discussed foreign trade and economic conditions. Let’s rewind a bit. You mentioned the “Arduous March” period earlier. You were a cadre at that time, correct?

Ri Jong-ho: Yes, I was.

Journalist: How much of a crisis did the leadership and elite class feel during that period?

Ri Jong-ho: During the Arduous March, the leadership felt an enormous threat to the regime. In 2000, Kim Jong-il said, “I don’t even know how we survived that difficult period. If the South Korean puppets or the Americans had known that we had run out of money in Office 39, they might have invaded immediately.” That recollection shows just how threatened the leadership felt at the time. That’s why they adopted the “military-first policy” and became obsessed with nuclear development. North Korea’s nuclear program was born out of this sense of crisis. Then, in 1998, the Kim Dae-jung administration launched the Sunshine Policy in South Korea. North Korea’s leadership saw that policy as a very dangerous and hostile act aimed at exposing and destabilizing the regime. They analyzed it as a threat that could not be viewed in a friendly light.

Journalist: As a cadre attending leadership meetings at the time, how were you instructed to respond to the Sunshine Policy? How did you personally interpret it?

Ri Jong-ho: Because it was seen as a hostile act, North Korea turned to a pragmatic strategy. We were told to extract everything we could from the South—capital, materials, everything—by any means necessary. That was the so-called “extraction strategy.” But the ideological elements of capitalism that came with it had to be completely blocked. So we were told to build a “double or triple mosquito net” around the country—accept the sweet, reject the bitter.

Journalist: But despite those internal fears, there was significant interaction with South Korean officials and companies. Were there pro-Sunshine Policy sympathizers inside the system?

Ri Jong-ho: Yes, there were many. When North Korean officials met South Koreans, they found they could communicate easily, and that created a sense of empathy. But during internal reviews, dozens of people were executed or purged. Their families were among our acquaintances, and resentment toward the Sunshine Policy grew. South Korean companies also came to do business in the North, but most failed. The regime didn’t allow them to gain a foothold.

Journalist: One last topic. Last year, South Korean media reported that a former senior Office 39 official would lead a North Korean government-in-exile. That report generated a lot of interest. Were they referring to you?

Ri Jong-ho: Yes, they were.

Journalist: So was that report true?

Ri Jong-ho: I was shocked when I saw it. I believe certain forces were trying to use me, plotting behind the scenes, with invisible actors involved. I immediately contacted the South Korean media outlet and demanded that the report be deleted and addressed the matter accordingly. It was a baseless story with no value.

Journalist: As we saw with former North Korean diplomat Thae Yong-ho, once an interview like this goes public, the regime is likely to respond harshly, even viciously. Are you prepared for that?

Ri Jong-ho: Yes, I’m prepared. Of course, it depends on how the regime perceives things, but once someone leaves the “original circle,” the regime automatically considers them an enemy.

Journalist: Finally, could you share your future plans?

Ri Jong-ho: I plan to establish an economic development research institute in Washington soon. My goal is to design a vision for North Korea’s future economic development and modernization. When the time comes for North Korea to transition to a market economy, I want to help attract capital and technology from the U.S., Japan, and global enterprises to modernize the country.

Journalist: Thank you for your time and for sharing such detailed insight today.

Ri Jong-ho: Thank you.

To read the original Korean article, click here: https://www.voakorea.com/a/3918439.html

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