North Korea’s economy has shown unexpected recovery, achieving 3.7% growth last year, the highest rate in eight years, despite strict international sanctions.
This recovery is largely due to the expansion of military cooperation with Russia, which has provided significant foreign currency inflows, as well as rapid growth in trade with China, stimulating consumption and construction activity, particularly in Pyongyang.
Signs of Recovery and Construction Boom
Signs of economic growth are visible in the capital, where taxi services using smartphones and QR code payment systems have recently emerged. According to The Wall Street Journal (WSJ), citing testimony from foreigners, satellite images, and reports from South Korean analytical centers, there has been a significant increase in Chinese electric vehicles and imported cars in Pyongyang. Additionally, pet stores, internet cafes, and luxury car showrooms have opened.
In North Korea, a construction boom is underway: last year alone, 10,000 new houses were built in Pyongyang. Reports indicate that in provincial areas, projects for the construction of hospitals, factories, greenhouses, and coastal tourist resorts are being implemented. Satellite images confirm these changes, showing an increase in ship traffic around oil storage facilities, a rise in the number of vehicles in parking lots, and nighttime lighting that is approximately three times higher than it was five years ago.
Russian Factor and Cyber Revenue
The most important factor in North Korea’s economic recovery is its close ties with Russia. WSJ analyzes that military cooperation between North Korea and Russia has rapidly expanded following Russia’s invasion of Ukraine. According to estimates by the Institute for National Security Strategy, affiliated with the National Intelligence Service of South Korea, North Korea has provided over 15,000 troops and significant amounts of ammunition to the Ukrainian front.
North Korea has earned over $10 billion (approximately 15.4 trillion won) from arms sales to Russia from the summer of 2023 to the end of last year, as well as received over $500 million (approximately 770 billion won) in additional revenue in exchange for military cooperation. There are indications that some payments may have been made in the form of advanced military technology, weapon parts, or various supplies instead of cash. Cyber hacking activity is also identified as a key means of earning foreign currency, with North Korean hackers operating from bases in China.
Source: Seoul Economic Daily