By Girish Linganna
The North Korean military reportedly launched one short-range ballistic missile into the sea on January 1, as Pyongyang continued its record-breaking blitz of launches in 2023. The South Korean military reported the launch.
According to Yonhap, which cited the Joint Chiefs of Staff as their source, the object originated near the Yongseong neighbourhood of Pyongyang and ended up in the East Sea, also referred to as the Sea of Japan.
Seemingly Impossible: Hermit Kingdom’s Missile Program
Not only is North Korea boosting its missile launches, but it is also investing in next-generation missile weapons. Kim Jong Un, the leader of North Korea, witnessed the December test of a new solid-fuel rocket engine that could improve the country’s ability to launch quick-strike, longer-range missiles capable of delivering nuclear bombs. This is the largest solid-fuel motor test North Korea has ever performed. Solid fuel missiles require less preparation before launch because the fuel is baked into the missile body during construction. Ultimately, shorter launch times improve the system’s survival. The engine could be utilised for North Korea’s Pukguksong series of submarine-launched ballistic missiles, a two-stage, nuclear-capable rocket with the range to strike Japan. It might also be utilised for longer-range missiles, such as intercontinental ballistic missiles capable of delivering a nuclear payload to the United States mainland.
Missile development and manufacturing are expensive for most nations, but North Korea has managed to build its missile technology and missile factories.
China, Taiwan, and South Korea have transformed the world with their innovative manufacturing and supply chain procedures for various items, including semiconductor chips, vehicles, and virtually any other product. While other East Asian nations are successfully interconnected to the world economy, this is not the case for North Korea, which maintains an isolationist path and has no connections to the global economy. This is largely owing to the policies of the Kim dynasty, which has dominated North Korea since Kim Il-sung assumed power in 1948 and passed down through generations, with Kim Il-grandson sung’s Kim Jong Un now in power since 2012.
North Korea’s exports amount to a meagre $2,2 billion. Due to its nuclear weapons programme, North Korea has also experienced numerous economic penalties. Since North Korea conducted its first atomic test in 2006, the United Nations has approved many resolutions that practically render exporting products to Pyongyang worthless unless they are essentials such as food, water, and sanitation. In addition, the European Union has imposed an export ban on practically all North Korean goods.
This makes us ask if North Korea is so isolationist and how it can generate cash to maintain its economy despite these sanctions.
North Korea’s Primary Exports: Coal and Textiles
China and North Korea have robust commercial ties. This is primarily due to geopolitical considerations, as China views North Korea as the ideal counterbalance to the United States’ strong ties with Japan and South Korea.
According to a 2017 Statista analysis, a staggering 75 per cent of its total trade is with China. This is illustrated by the fact that China accounts for 94% of North Korea’s imports and 91% of its exports, as seen in the diagram. So what does North Korea export primarily?
COAL is one of its primary exports. North Korea ranks 35th in the world regarding proven coal reserves, with 661 million tonnes. It is generally stated in a 2017 Observatory of Economic Complexity (commonly known as OEC) research that North Korea exports roughly $368 million worth of coal to China, which is one of the country’s largest customers.
China said in 2017 that it would cease all coal exports from North Korea to comply with the many sanctions North Korea received due to its nuclear programme. However, according to a classified United Nations study, North Korean coal is still illegally shipped to China. According to a Financial Times report from 2021, China’s coal exports have surged despite the country’s energy problem. North Korea’s exports to China also include textiles, a key commodity. According to the same 2017 OEC study, North Korea exports textiles valued at approximately 584 million dollars, including non-knit coats, suits, and activewear. As many of these textiles are re-exported around the world with a “Made in China” label, this is a major source of controversy in North Korea. North Korea can also export ferrosilicon, potato flour, and electronic watch components.
Most trade between North Korea and China is conducted through China’s northeastern port of Dandong. This is separated from Sinuiju, the closest North Korean city, by the Yalu river.
If there is one commodity that North Korea sells on a global scale, it is its famed seafood, including pine mushrooms, molluscs, and processed fish. There are restaurants dedicated to the North Korean government in Vietnam, the Netherlands, and other countries.
Arms Deals Drive North Korea’s Economy
The North Korean economy is driven by its arms deals. Due to the strong ties, they enjoyed in the 1960s in the cause of socialism; North Korea has formed relations with several African Union countries. A further element in their favour is that only seven African countries have engaged in United Nations sanctions.
According to the Institute for Security Studies (ISS), a South African research tank, the yearly value of commerce between African states and North Korea has reached 216.5 million dollars. Pyongyang’s construction of arms factories in the Democratic Republic of the Congo, Ethiopia, Madagascar, and Uganda is mostly to blame.
Additionally, it has been hired to build military sites in Namibia. Egypt and Libya have also purchased ballistic missile lines from North Korea.
It is widely believed that North Korea has collaborated with Iran on developing nuclear weapons. According to a 2016 UN assessment, North Korea has also sold weapons to countries in the Middle East.
Stealing for the State: North Korea’s Hackers in Action
Multiple sources have indicated that there are 6000 hackers in Pyongyang. The government of North Korea teaches them the fundamentals of hacking, from beginner to advanced levels, after discovering them as math geniuses at government-run schools around the country. By utilising this information, hackers can steal large sums of money kept globally, which they must subsequently donate to the government. In 2019, a confidential UN report revealed that hackers stole approximately $2 billion to fund their nation’s nuclear weapons programme.
It is commonly assumed that North Korean hackers were behind the WannaCry ransomware attack that targeted the United Kingdom’s National Health Service and other government-run entities worldwide. In 2016, they were also allegedly responsible for the cyber theft of 81 million dollars from Bangladesh’s account at the New York Federal Reserve. This is not restricted to a single domain. According to the Chainlysis report on Crypto Crime for 2022, hackers stole approximately $400 million worth of cryptocurrency last year.
North Korean hackers also hacked Sony Pictures and leaked the company’s valuable information. This was primarily due to Sony Pictures’ production of The Interview, a comedic film about the assassination of their leader Kim Jong-un.
North Korea’s Slave Labour Industry: A Cash Cow for the Regime
Between 50,000 and 100,000 North Koreans have been taken abroad to work in industries such as mining, construction, and textiles in countries such as China and Russia. Constant observation ensures that labourers have no leeway despite terrible working conditions and virtually nonexistent compensation. Money is exchanged for agonising labour, but it goes directly to the North Korean government’s coffers.
Robert Manning, a senior fellow of the North Atlantic Council (the key decision-making body of NATO), has stated that this cash can also benefit North Korea by purchasing the support of numerous world leaders. In addition, he feels that the revenue generated by the sort of “slave labour” described above is one of its most important causes.
Despite facing sanctions and global isolation, North Korea has been able to continuously develop its missile program and maintain its economy through various means. From the use of its highly trained hackers to steal large sums of money, to its exports of coal and textiles to China, to its participation in arms deals with countries around the world, North Korea has found ways to generate income and fund its military and nuclear programs. The international community needs to continue closely monitoring and addressing these activities to address the threat posed by North Korea’s missile program and nuclear weapons. China is the primary factor in North Korean economic growth. However, since the US and Western countries have imposed sanctions on Russia, North Korea will have another avenue to obtain foreign markets and technology for its defence needs.
The author is Defence and Aerospace Analyst.
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