Just five years ago, North Korea, and seemingly Kim himself, appeared to be on the ropes. Fear of Covid triggered border closures that caused a plunge in trade with China, North Korea’s main benefactor. Energy shortages caused coal mines to halt production. Basic food items such as vegetable oil and sugar became scarce on store shelves, Moscow’s then ambassador to Pyongyang told Russian state media in 2021.
Kim made a rare admission that the country’s economic policies had failed, acknowledging widespread food shortages and shedding tears in public. He lost considerable weight. “Almost all sectors fell a long way short,” he said in early 2021.
The economic slump began to reverse after Russia’s February 2022 invasion of Ukraine, which North Korea publicly endorsed.
More than a year into the war, North Korea became a munitions supplier to Moscow, generating more than $10 billion from the summer of 2023 to the end of last year, according to INSS, the think tank—a big boost to an economy with an estimated GDP of about $27 billion.
In 2023, Kim made his first overseas trip after Covid, to Russia’s Far East to meet Russian President Vladimir Putin. The following year, Putin visited Pyongyang, where the two leaders signed a mutual defense pact.
That set the legal framework for North Korea’s troop deployment to fight alongside Russia, which brought in more than half a billion dollars, according to INSS. Most payments will come in the form of sensitive military technology, weapons parts or other materials, the think tank estimates.
North Korea’s new warships and drones resemble Russian designs, weapons experts say. Moscow has already sent air defenses to Pyongyang, according to South Korean officials.
The deeper relationship with Russia is the biggest gain North Korea could have wanted, especially the “free advertising” afforded to the Kim regime’s weapons and fighters active on the Ukraine war battlefields, said Jung H. Pak, who was a senior official handling North Korean issues during the Biden administration. “The regime is wealthier than ever,” she said.
Russian military know-how has enabled Kim to shift more resources to bread-and-butter areas. North Korea’s pre-Covid economy had increasingly centered on black markets selling goods smuggled from China or under-the-table local goods—and with it the rise of a “donju” merchant class who made their wealth outside state control.
Kim has asserted more centralized control during the rebound years, demanding state-manufactured goods appear on shelves and expanding market surveillance.
Over the past year, North Korea has completed major construction projects that had stalled for years, including Pyongyang’s largest hospital, a greenhouse complex bigger than New York’s Central Park and a new beach-resort compound. His marquee “20×10” initiative—new factories in 20 cities and counties a year for the next 10 years—calls for local economic revitalization requiring a modern healthcare facility, light-industry factories and a leisure complex.
North Korean leader Kim Jong Un, in a white jacket and straw hat, inspecting a greenhouse farm.
Kim Jong Un, center, inspecting a greenhouse farm in North Pyongan province, in a picture released by North Korea’s official Korean Central News Agency. KCNA/AFP/Getty Images
The regime is expanding state-run shops and pharmacies to replace black market activity, and new factories in rural areas are producing state jobs for traders who previously engaged in smuggling, said Lee Sang-yong, a researcher who has a network of sources inside the Kim regime.
“Some of the funds that the Kim regime made through selling weapons and hacking are trickling down to the residents,” said Lee, who heads a data-research center owned by DailyNK, an online publication.
Ben Weston, who runs a YouTube channel about North Korea, visited a special economic zone near the China and Russia borders last year. Far from Pyongyang, Weston spotted a new fleet of taxis, plus modern buildings replacing older houses. “These projects seemed to be happening all over the country,” he said.
Fancy cars
Austrian filmmaker Brigitte Weich hadn’t visited North Korea since 2018 before arriving at the Pyongyang International Film Festival last fall. The first thing she noticed was busier streets. Electric vehicles and imported cars were abundant, she said, and more locals appeared to own cars.
“The cars look quite fancy,” Weich said. Her North Korean tour guide said EVs were preferred because they were better for the environment.
Driving is now so widespread that state-run television recently aired a two-part segment about updates to traffic laws. Among the revisions: new bans on jaywalking, walking pets without a leash and smoking while driving.
In April, Kim toured a new neighborhood of residential skyscrapers in the “Hwasong” district, which shares a name with North Korea’s intercontinental ballistic missiles capable of reaching the U.S. mainland. A pair of 40-story residential towers was painted red to resemble missiles. Earlier this year, families of North Korean soldiers killed in Russia were given apartments in the district.
People walk in a street of the Hwasong area in Pyongyang.
A new neighborhood of residential skyscrapers in Pyongyang’s Hwasong district. Kim Won Jin/AFP/Getty Images
Chinese exchange students have provided glimpses on social media of life in Pyongyang, including photos of department stores featuring cosmetics with Chanel’s logo and sunglasses with Ray-Ban’s.
In May, North Korea held its first full-scale Spring International Trade Fair since the pandemic. More than 290 companies attended, including ones from Russia, China, Mongolia, Switzerland and Thailand.
A North Korean electronics company showcased “intelligent TVs” that enabled viewers to purchase goods. Smartphones, some costing more than $500, were exhibited in red, blue and orange.
Jindallae mobile phones displayed at a trade fair in Pyongyang.
Domestically produced cellphones on display during the 24th Pyongyang Spring International Trade Fair in May. Kim Won Jin/AFP/Getty Images
“We are listening to the people’s demands,” a saleswoman told North Korea’s state broadcaster. “To further advance our domestic electronic goods.”
Zoe Stephens, a British citizen, has led groups to North Korea as a tour guide. Before the pandemic, she recalled, all payments were in cash. Visiting Pyongyang last year, she saw more locals buying with their smartphones. There are apps to order food, basic staples, even prescription medications.
“They were using delivery services, cash-payment apps you can pay through your phone,” she said.
‘Wealthier than ever’
Just five years ago, North Korea, and seemingly Kim himself, appeared to be on the ropes. Fear of Covid triggered border closures that caused a plunge in trade with China, North Korea’s main benefactor. Energy shortages caused coal mines to halt production. Basic food items such as vegetable oil and sugar became scarce on store shelves, Moscow’s then ambassador to Pyongyang told Russian state media in 2021. Kim made a rare admission that the country’s economic policies had failed, acknowledging widespread food shortages and shedding tears in public. He lost considerable weight. “Almost all sectors fell a long way short,” he said in early 2021. The economic slump began to reverse after Russia’s February 2022 invasion of Ukraine, which North Korea publicly endorsed.
More than a year into the war, North Korea became a munitions supplier to Moscow, generating more than $10 billion from the summer of 2023 to the end of last year, according to INSS, the think tank—a big boost to an economy with an estimated GDP of about $27 billion. In 2023, Kim made his first overseas trip after Covid, to Russia’s Far East to meet Russian President Vladimir Putin. The following year, Putin visited Pyongyang, where the two leaders signed a mutual defense pact. That set the legal framework for North Korea’s troop deployment to fight alongside Russia, which brought in more than half a billion dollars, according to INSS. Most payments will come in the form of sensitive military technology, weapons parts or other materials, the think tank estimates. North Korea’s new warships and drones resemble Russian designs, weapons experts say. Moscow has already sent air defenses to Pyongyang, according to South Korean officials. The deeper relationship with Russia is the biggest gain North Korea could have wanted, especially the “free advertising” afforded to the Kim regime’s weapons and fighters active on the Ukraine war battlefields, said Jung H. Pak, who was a senior official handling North Korean issues during the Biden administration. “The regime is wealthier than ever,” she said. Russian military know-how has enabled Kim to shift more resources to bread-and-butter areas. North Korea’s pre-Covid economy had increasingly centered on black markets selling goods smuggled from China or under-the-table local goods—and with it the rise of a “donju” merchant class who made their wealth outside state control. Kim has asserted more centralized control during the rebound years, demanding state-manufactured goods appear on shelves and expanding market surveillance. Over the past year, North Korea has completed major construction projects that had stalled for years, including Pyongyang’s largest hospital, a greenhouse complex bigger than New York’s Central Park and a new beach-resort compound. His marquee “20×10” initiative—new factories in 20 cities and counties a year for the next 10 years—calls for local economic revitalization requiring a modern healthcare facility, light-industry factories and a leisure complex. North Korean leader Kim Jong Un, in a white jacket and straw hat, inspecting a greenhouse farm. Kim Jong Un, center, inspecting a greenhouse farm in North Pyongan province, in a picture released by North Korea’s official Korean Central News Agency. KCNA/AFP/Getty Images The regime is expanding state-run shops and pharmacies to replace black market activity, and new factories in rural areas are producing state jobs for traders who previously engaged in smuggling, said Lee Sang-yong, a researcher who has a network of sources inside the Kim regime. “Some of the funds that the Kim regime made through selling weapons and hacking are trickling down to the residents,” said Lee, who heads a data-research center owned by DailyNK, an online publication. Ben Weston, who runs a YouTube channel about North Korea, visited a special economic zone near the China and Russia borders last year. Far from Pyongyang, Weston spotted a new fleet of taxis, plus modern buildings replacing older houses. “These projects seemed to be happening all over the country,” he said.
Fancy cars
Austrian filmmaker Brigitte Weich hadn’t visited North Korea since 2018 before arriving at the Pyongyang International Film Festival last fall. The first thing she noticed was busier streets. Electric vehicles and imported cars were abundant, she said, and more locals appeared to own cars. “The cars look quite fancy,” Weich said. Her North Korean tour guide said EVs were preferred because they were better for the environment. Driving is now so widespread that state-run television recently aired a two-part segment about updates to traffic laws. Among the revisions: new bans on jaywalking, walking pets without a leash and smoking while driving. In April, Kim toured a new neighborhood of residential skyscrapers in the “Hwasong” district, which shares a name with North Korea’s intercontinental ballistic missiles capable of reaching the U.S. mainland. A pair of 40-story residential towers was painted red to resemble missiles. Earlier this year, families of North Korean soldiers killed in Russia were given apartments in the district. People walk in a street of the Hwasong area in Pyongyang. A new neighborhood of residential skyscrapers in Pyongyang’s Hwasong district. Kim Won Jin/AFP/Getty Images Chinese exchange students have provided glimpses on social media of life in Pyongyang, including photos of department stores featuring cosmetics with Chanel’s logo and sunglasses with Ray-Ban’s. In May, North Korea held its first full-scale Spring International Trade Fair since the pandemic. More than 290 companies attended, including ones from Russia, China, Mongolia, Switzerland and Thailand. A North Korean electronics company showcased “intelligent TVs” that enabled viewers to purchase goods. Smartphones, some costing more than $500, were exhibited in red, blue and orange. Jindallae mobile phones displayed at a trade fair in Pyongyang. Domestically produced cellphones on display during the 24th Pyongyang Spring International Trade Fair in May. Kim Won Jin/AFP/Getty Images “We are listening to the people’s demands,” a saleswoman told North Korea’s state broadcaster. “To further advance our domestic electronic goods.” Zoe Stephens, a British citizen, has led groups to North Korea as a tour guide. Before the pandemic, she recalled, all payments were in cash. Visiting Pyongyang last year, she saw more locals buying with their smartphones. There are apps to order food, basic staples, even prescription medications. “They were using delivery services, cash-payment apps you can pay through your phone,” she said.