How North Korea Survives Sanctions?

The latest round of negotiations between Donald Trump, i.e. President of the United States and Kim Jong Un, the dictator of North Korea, held at Hanoi, seemed to have failed once again. Donald Trump claimed that he decided to walk away since North Korea’s demands were untenable. On the other hand, Kim-Jong Un claims that Korean demands were very reasonable. It is only the high handedness of the American regime that has led these talks to end inconclusively.

The failure of peace talks between America and the hermit kingdom is nothing new, and neither is the blame game that follows. This makes one wonder, how is it possible that a country like North Korea which is literally on the verge of bankruptcy is able to survive without assistance from the outside world.

America has accused North Korea of trying to build nuclear weapons. Building these weapons obviously, require a lot of money. Hence, North Korea’s continued efforts in this regard mean that North Korea does have some sources of revenue from which they are able to generate enough money to survive.

In this article, we will have a closer look at the economic actions which are undertaken by North Korea which help it survive.

Covert Support from Allies: The first and foremost reason that North Korea is able to survive is that it is not as isolated as America wants the world to believe. There are many countries which respect the economic sanctions that are levied by the United States from time to time. However, there are many other powerful countries which do not pay much attention to these economic sanctions.

For instance, countries like Russia, China, and Iran are known enemies of the United States. This is the reason why these countries support North Korea. In the past, Russia has openly admitted to not following some of the sanctions that were levied on North Korea. The stated reason was that Russia did not want Pyongyang to become more unstable since that would be bad for the entire region as well as the world. Also, Iran has been selling oil to countries like North Korea since there are sanctions in place which prevent it from dealing with other countries.

The most important country that holds the key to pressure on North Korea is China. China has a land boundary with North Korea. Also, Beijing and Pyongyang have been trading partners for a very long time. While the rest of the world stopped trading with Pyongyang, China continued to do so. This is the reason that as of today, more than 90% of the foreign trade of North Korea happens with China. Once these goods enter China, they are then sold off to the rest of the world as Chinese goods. China typically acts late to international pressure. For instance, if the world is pressuring China to stop trade with North Korea, China will double trade for six months while resisting pressure. Then it will pretend to halt trade for the next six months.

The bottom line is that it is the covert support that North Korea receives from many other countries that allow it to survive economically.

Slave Labour: There have been allegations that North Korea has been selling slave labour to other countries in Eastern Europe and the Middle East. This is because traditionally North Korean citizens do not have too many working opportunities outside the country. However, in the past few years, an increasing number of North Korean workers now work at jobs which require hard labour. Interestingly, these labourers regularly send over 90% of their earnings back home! Also, many journalists have uncovered the fact that these workers work in horrific slave-like conditions. Many of them work for 14 hours a day, 6 days a week!

Journalists and international agencies have uncovered proof that these labourers are not voluntarily moving to other countries in search of better opportunities. Instead, the North Korean state is using them to fund its operations.

Selling Weapons: The North Korean economy is not well developed. However, the North Korean military does have the ability to produce some advanced weapon systems. It has been alleged that North Korea has been selling these weapons to many banned groups in the world. Evidence has surfaced which shows that arms deals have taken place between the state of North Korea and groups like Hamas, ISIS, etc. The international community has recently alleged that North Korea has sold weapon systems like anti-tank missiles to terrorist groups in Syria and Iraq.

Hacking: The state of North Korea has also been known to openly encourage hacking and cybercrime. The North Korean army has formed groups of hackers who are supposed to bring in certain sums of money every year via blackmail, online gambling, and cyber thefts. One of the most high profile cases of North Korean criminal activity happened when the country broke into the SWIFT network and stole close to $860 million. These hackers have also attacked the American Federal Reserve wherein they were able to siphon off more than $81 million from Bangladesh’s account. Similar attacks have also happened on groups in Ecuador, Philippines, and Vietnam.

To sum it up, the covert support received from many powerful nations as well as several illegal activities have kept the nation of North Korea afloat.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.