The most surreal image from North Korea over the past two years has not been missiles, but residents of Pyongyang sipping cappuccinos while strolling through shopping malls. Over the last decade, imports from China—such as massage devices and treadmills—have multiplied exponentially. Pianos, watches, carousels, roller coasters, and water slides have gradually appeared on the import lists of a nation long under sanctions.
Recent data from South Korea’s central bank indicates that North Korea’s economy has grown for several consecutive years. After visiting Pyongyang, Singapore’s Foreign Minister Vivian Balakrishnan remarked that the capital’s development “rivals any modern city in East Asia.”
The transformation is concentrated in Pyongyang. In newly opened luxury shopping centers, locals sip coffee while selecting home appliances; beer halls offer all-night drinking. Near the China–North Korea border, several high-end hotels have opened in quick succession, new ski resorts are under construction, and a seaside resort in Rason has drawn so many domestic tourists that hotel rooms are hard to book. In upscale retail spaces, Rolex and Omega watches hang side by side. Mobile payment systems have also taken root—visitors report being able to purchase almost any item with relative ease. Officially, numerous leisure complexes across the country have either been completed or are under construction.
Where does the money come from? Russia. Both South Korean analysts and Bloomberg have estimated that North Korea has generated substantial foreign exchange earnings by participating in the Russia-Ukraine war. Ammunition, weapons, manpower, along with cryptocurrency transactions and mineral exports, have fueled this surge in foreign currency inflows.
Ironically, international sanctions still prohibit trade in luxury goods, energy, and minerals. Yet North Korea has found ways around these restrictions: its military production capacity and human resources have become its most valuable export commodities. Shells are traded for foreign currency, which funds the operation of shopping malls. These malls stabilize prices and maintain social stability, thereby strengthening leverage at the negotiating table.
This logic has no precedent in the past three decades. The classic narrative was “sanctions → scarcity → capitulation.” Pyongyang now operates under a different script: “involvement in conflict → infusion of capital → prosperity → consolidation of the regime.”
Yet the reality must be assessed with caution. Growth is built on an extremely low base. All visitors are domestic; no foreign exchange is generated. High-end malls primarily serve a small urban middle class, while rural food security remains unaddressed in official statistics. Most critically, control rests firmly in Moscow. As long as the arms agreement with Russia remains effective, supply chains remain intact. But if Russia withdraws support, the entire financial flow faces immediate disruption.
The scent of coffee and the sight of ski gondolas exist simultaneously with United Nations sanctions, forming one of the most jarring contradictions of our time. North Korea has demonstrated a stark truth: sanctions can restrict trade, but they cannot eliminate the channel through which military capability is monetized. While beaches in Rason teem with tourists, the fields of eastern Ukraine remain barren where shells continue to fall.
Original source: toutiao.com/article/1876819476236491/
Disclaimer: The views expressed in this article are those of the author alone.