North Korea's Russia Ties Bring Economic Boom
· investing
How North Korea Has Profited from Its Support for Russia
The news of North Korea’s economic boom, driven by its involvement in Russia’s war against Ukraine, has sent shockwaves through the global community. The country’s dictator, Kim Jong Un, is reportedly reaping substantial profits from the sale of munitions and deployment of troops to Moscow.
Pyongyang’s landscape has undergone a significant transformation since the influx of foreign aid and investment began. Modern skyscrapers now stand alongside imported cars and smartphone apps that would be at home in any major metropolis. However, beneath this façade lies a complex web of interests that benefit only the ruling elite.
According to reports from the South Korean Institute for National Security Strategy (INSS), North Korea’s involvement in Russia’s war effort has generated an estimated $7.7 billion to $14.4 billion in revenue, with another $8 billion coming from trade with China and other illicit activities. This windfall has allowed Kim Jong Un to consolidate his power and showcase his achievements.
The majority of North Koreans, however, have not benefited from this economic upswing. The country’s isolationist policies and strict controls on foreign currency have left many households vulnerable to rising food prices and devaluation of the national currency. Women in these families are now being forced to take on more responsibility to maintain living standards.
The partnership between Russia and North Korea is a classic example of mutually beneficial arrangements between authoritarian regimes. In exchange for military support and resources, Moscow provides Pyongyang with crude oil, grain, and military goods – including advanced technologies for building drones, missiles, and submarines. This reciprocal arrangement has allowed Kim Jong Un to shed his status as a pariah in world politics and gain greater influence on the global stage.
The implications of this unlikely alliance are far-reaching. It raises questions about the West’s ability to contain the spread of Russian aggression in Eastern Europe. The fact that North Korea is supplying half the munitions Russia uses at the frontlines is a stark reminder of the country’s growing military power and influence.
Furthermore, this partnership has significant implications for regional security. Kim Jong Un’s expansion of his military presence in Russia creates a proxy force that can be deployed to further his own interests. Ukrainian President Volodymyr Zelenskyy has warned of the dangers of such an arrangement, citing the deployment of 16,000 to 22,000 North Korean soldiers to fight against Ukraine.
The economic boom in North Korea is not sustainable or equitable. The majority of citizens are still struggling to access basic necessities, and the country’s isolationist policies continue to hold them back. It remains to be seen whether Kim Jong Un’s new role as Russia’s supporter will bring about lasting change for his people or simply cement his own grip on power.
This unlikely partnership between North Korea and Russia serves as a stark reminder of the complexities and nuances of global politics. As we monitor the implications of such an arrangement, it is crucial to stay vigilant – not just for regional security but also for the welfare of the people caught in its midst.
Reader Views
- TLThe Ledger Desk · editorial
The touted economic boom in North Korea is nothing more than a clever ruse to further entrench Kim Jong Un's authoritarian grip on the country. While the regime cashes in on its Russia tie, ordinary citizens suffer under crushing poverty and lack of access to basic necessities like food and medicine. What's striking is that this influx of foreign aid has also enabled North Korea to boost its surveillance capabilities, making it even harder for defectors to escape and those living in poverty to mobilize against the regime.
- LVLin V. · long-term investor
The article highlights North Korea's economic boom driven by its involvement in Russia's war against Ukraine, but it glosses over the elephant in the room: what happens when this patronage model inevitably falters? As an investor with long-term exposure to these markets, I worry about the fragility of Pyongyang's economy. It relies heavily on imports and illicit activities, which can be shut off at a moment's notice by its patrons or international sanctions. How will Kim Jong Un's regime maintain this facade when global politics shift?
- MFMorgan F. · financial advisor
While North Korea's economic boom is undoubtedly driven by its ties with Russia, we should not be surprised that the benefits of this partnership have largely accrued to Kim Jong Un and his inner circle. What's striking, however, is how this arrangement has allowed Pyongyang to expand its military capabilities without incurring significant costs, essentially outsourcing its defense modernization to Moscow. This raises important questions about the long-term implications for regional stability, as North Korea's upgraded arsenal threatens not just South Korea but also Japan and the wider Asia-Pacific community.