China, Russia And North Korea: How The Reclusive Regime Of Kim Jong Un Is Funding Its Nuclear Weapons Programme

Reports indicate the presence of new types of sugar in North Korean local markets, as well as satellite imagery capturing trains crossing borders and cargo ships with their transponders turned off.

These are the types of indicators that experts carefully examine when trying to understand North Korea's opaque economy. Instead of relying on hard statistics, these clues provide valuable insights.

All these indicators point to a single conclusion: Kim Jong Un has discovered fresh methods to replenish his depleted coffers.

This newfound money allows him to disregard financial incentives aimed at bringing North Korea back to the negotiating table and instead focus on expanding his nuclear arsenal.

According to the United Nations, Russia has resumed sending oil to North Korea for the first time since 2020. This follows an earlier resumption of grain shipments.

While it remains unknown what is being sent in the opposite direction, both the US government and independent analysts share a common theory: North Korea is exporting munitions from its extensive stockpiles.

These interventions alone cannot fully restore a struggling and isolated economy. However, in conjunction with the reopening of trade links with China and other sources of income such as cybercrime, the assistance from Russia is helping to maintain stability in the economy. This allows Kim to continue defying the international community.

Russia and China are demonstrating their support for Kim by sending high-profile delegations to North Korea for the anniversary celebrations. These visits mark the first time foreign envoys have traveled to North Korea since the start of the Covid-19 pandemic.

The Russian group arrived on Tuesday (25 July) night and received a warm welcome from top officials.

Despite being banned from arms sales for approximately 15 years, Pyongyang denies allegations that it is supplying Russia.

However, in December, the White House stated that it had evidence of North Korea completing an initial arms shipment to the Wagner Group for use in Ukraine. This shipment reportedly included infantry rockets and missiles.

One item that Russia likely wants is 152 mm artillery shells, which North Korea possesses. These shells are compatible with the Soviet-era weaponry that has been reintroduced in Ukraine.

The conflict in Ukraine has caused the Kremlin's war machine to rapidly consume thousands of shells daily, leading to a scramble for supplies.

North Korea has a vast stockpile of munitions, potentially amounting to millions of rounds. This arsenal has long posed a threat of devastation to Seoul.

Given the UN sanctions imposed on both North Korea and Russia, both countries are actively trying to hide the extent of their trade activities. However, there are clear indications that trade is on the rise.

In late 2022, satellite images revealed that a rail link between the two countries, which had been suspended for almost three years, was restored.

The images captured a train crossing from Russia into North Korea and stopping at a freight handling station. This suggests a resumption of trade between the two nations.

A pipeline connecting two cities, which is exempt from sanctions, is believed to be supplying up to 750,000 tons (5.5 million barrels) of oil annually. This information comes from a report by specialists David von Hippel and Peter Hayes.

North Korea primarily exports commodities that can be mined domestically and traded in ways that avoid interception.

Data from IHS Markit reveals that the main international seaport in Nampo has seen a significant increase in shipping activity. In the first half of this year alone, the number of detectable vessels reached 100, and it is projected to triple the traffic seen during the pandemic years.

In March, a report from a United Nations Security Panel of Experts revealed that North Korea has exceeded the yearly limit of 500,000 barrels of imported refined petroleum products, indicating their ability to spend money.

Additionally, the panel stated that North Korea has violated sanctions by acquiring six more cargo vessels this year. Four of these ships recently sailed to China to sell iron and coal, mining commodities from North Korea for hard currency.

Another potential source of income for North Korea is cybercrime. The United States and South Korea have accused Kim's regime of deploying hackers worldwide to finance its weapons programs.

They play a role in facilitating cyber attacks and cryptocurrency thefts, which have reportedly contributed to North Korea's estimated earnings of $1.7 billion in 2022.

Due to the lack of official statistics on North Korea's overall economy, it is challenging to assess the extent of its economic activity. Much of it remains undocumented and intentionally concealed.

According to Anwita Basu, a macroeconomist and an expert on North Korea, the outlook for the North Korean economy is unclear. However, she anticipates that the economy will remain stable enough to allow Kim Jong Un to maintain his position of power.

The money spent on armaments far exceeds other costs. According to data compiled by the Korea Institute for Defense Analyses, Kim's regime spent an estimated $400 million to $650 million on building and testing 33 missiles in the first half of 2022.

In fact, the number of missiles fired off exceeded 70 in that year alone. This suggests that the regime could have spent over $1 billion on missile tests, which is approximately 4 per cent of its $25 billion economy.

Despite calls from the US, South Korea, and Japan to allocate the missile funds towards feeding the people, Kim has chosen to defy the international community. This defiance has provided him with a level of security against potential US actions.

With his weapons programme reaching a significant stage, Kim now possesses enough arsenal to launch a credible nuclear strike on South Korea and Japan, both of which host a large number of US military personnel.

Kim shows no signs of slowing down his military programme. Following a record-breaking series of tests in 2022, he has once again increased the intensity of his military activities this year.

As recent as this month, he successfully tested a new intercontinental ballistic missile designed to target the US mainland.

Russia's involvement in the conflict in Ukraine may be encouraging Kim Jong Un to act more aggressively, according to Duyeon Kim, an adjunct senior fellow at the Center for a New American Security in Seoul.

Duyeon Kim argues that both China and Russia have not effectively enforced the sanctions imposed by the UN Security Council, allowing North Korea to persist with its nuclear weapons programme and provocative actions.