Discord looms in N Korea

2004-12-24 19:57

Tokyo - North Korea's hardline regime shows signs of instability as economic reforms widen the gap between rich and poor, Japan's public security intelligence agency said in a report released on Friday, according to local media.

As a result, cracks could appear in the power structure supporting North Korean leader Kim Jong Il and discord could emerge among the leadership as factions vie to install a successor, the agency said in an annual report on matters affecting Japan's security, public broadcaster NHK reported.

Economic reforms begun in North Korea in July 2002 that allow limited private enterprise have fuelled inflation and created classes of "winners" and "losers", the report said.

Theft and robbery have increased, indicating the North Korean regime's tight grip over the country is loosening, Kyodo News quoted the agency as saying.

If the economic situation worsens, North Korea could try to raise revenue by smuggling more drugs overseas, increase its counterfeiting of foreign currency, and lift its exports of long-range missiles, the report said.

North Korea denies peddling drugs, distributing phoney money or illicitly importing weapons technology.

But the US military estimates Pyongyang reaped $560m from missile sales in 2001.

Australian seizures last year of alleged North Korean narcotics valued at $120m suggest a sizable drug trade.

- AP