SEOUL, September 3 — A recent report by the South Korean National Strategy Institute has revealed that the North Korean government has acquired nearly $6.3 billion in illegal income from 2017 to 2023. The report highlights the regime’s reliance on cyberattacks and other illicit activities to bolster its coffers amidst international sanctions and economic isolation.
Background and Findings
The report, released on September 3, compiles data from South Korean government sources, foreign governments, and specialized institutions to estimate the scale of Pyongyang’s illegal earnings. The findings indicate that North Korea has employed various illegal methods to generate revenue, including cyberattacks, the export of IT personnel and laborers, and the smuggling of coal.
Cyberattacks and Illicit Earnings
One of the most notable methods is the use of cyberattacks. The report estimates that North Korea has earned approximately $13.5 billion through cyber activities, which include hacking into financial institutions and cryptocurrency exchanges. These cyber operations have allowed the regime to circumvent international sanctions and gain access to hard currency.
Coal Smuggling and Labor Exports
Another significant source of illegal income is the smuggling of coal, which has generated an estimated $21.5 billion. North Korea has long been accused of exporting coal to neighboring countries through clandestine channels to evade international trade restrictions.
Additionally, the export of IT personnel and laborers to countries like Russia and China has brought in about $17.5 billion. These workers are often sent abroad under the guise of legitimate labor contracts but are subjected to exploitation and have little to no rights, according to the report.
Arms Sales to Russia
The report also delves into North Korea’s arms sales to Russia, which have intensified in recent years. By analyzing data from the South Korean Defense Ministry, the White House, and the State Department, as well as the Ukrainian Defense Ministry, the report estimates that North Korea provided Russia with significant quantities of ammunition between July 2023 and February 2024. Specifically, it is believed that North Korea supplied 937,500 152mm artillery shells, 187,500 122mm artillery shells, nine KN-23 missiles, and nine KN-24 missiles, earning approximately $5.4 billion in the process.
Economic Impact
The illegal income has had a significant impact on North Korea’s economy. Over the past seven years, the country has experienced an $82.5 billion trade deficit in legal transactions. However, when the illegal income is factored in, the deficit is reduced to $19.7 billion, highlighting the importance of these illicit activities in propping up the regime’s finances.
International Response
The report’s findings are likely to intensify calls for stronger international action against North Korea’s illegal activities. The United Nations and other international bodies have repeatedly condemned Pyongyang’s nuclear program and its proliferation of weapons of mass destruction, but the regime’s illegal income generation has also become a major concern.
Experts argue that the international community needs to address these activities more effectively to limit North Korea’s ability to finance its weapons programs and its oppressive regime.
Conclusion
The report by the South Korean National Strategy Institute underscores the lengths to which the North Korean regime is willing to go to maintain its grip on power. With the country facing severe economic challenges and international isolation, the regime’s reliance on illegal activities to generate income is a stark reminder of the need for a robust international response to contain its nuclear ambitions and support human rights in the region.
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