According to reports from visitors and international analysts following border reopenings, North Korea has experienced a surprising economic shift, characterized by a rising middle class, digital payment systems, electric vehicles, and high-rise developments in Pyongyang, despite ongoing Western trade sanctions and historical isolation.
Pyongyang Reopens with Neon Skyscraper Skylines and Digitized Daily Life
Visitors returning to North Korea after years of pandemic-era border closures report significant changes to the capital’s skyline and infrastructure. According to Brisbane tour guide Rowan Beard, who visited for the Pyongyang International Film Festival after more than 100 previous trips, the city has developed rapidly with new buildings and increased traffic. “What struck me most was how quickly the city had developed,” Mr. Beard told news.com.au. “The skyline had changed considerably, there were many more cars on the roads and life had become digitised.” Citizens now utilize state-made mobile phones for ride-booking apps, online banking, and QR code payments in restaurants, though these devices operate on a restricted national intranet without direct internet access.
University of Sydney Professor of International Relations and Comparative Politics Justin Hastings noted that mobile technology remains heavily regulated. “This control stops North Koreans from organising together outside the state, and stops information reaching them,” Professor Hastings said. Alongside digital integration, the urban landscape features modern residential districts like Hwasong, where nighttime satellite data shows illumination levels have tripled over a five-year period. Koryo Tours guide Gergo Vaczi also observed a massive influx of private vehicles, including luxury cars and electric models, signaling a departure from past infrastructure shortages.
Russia and China Trade Fuel Economic Growth Amid Sanctions
Economic indicators point to consecutive years of GDP growth exceeding 3 percent, driven largely by external partnerships and military exports. According to reports cited by news.com.au, North Korea has supplied Russia with approximately 15,000 troops—with numbers expected to reach 50,000—alongside millions of artillery shells and dozens of missiles following the 2022 invasion of Ukraine. These defense sales and troop deployments have reportedly earned the regime up to $14 billion, providing financial relief and resources that Professor Hastings suggests make Kim Jong-un feel more secure and less cornered.
Did you know? North Korea has recorded three consecutive years of GDP growth of more than 3 per cent, largely bolstered by foreign currency inflows from arms exports and trade.
At the same time, trade with China has surged by nearly 20 percent, encompassing exports such as hair products, wigs, and ore. Professor Hastings observed that China’s lax enforcement of sanctions and Russia’s outright rejection of them have allowed the regime to bypass traditional economic restrictions more easily.
Room 39 and Illicit Foreign Revenue Streams
Beyond traditional exports and military sales, North Korea continues to rely on specialized state units to generate foreign currency. Office 39, a secretive government organization valued at approximately $5 billion, oversees revenue generation through arms sales, drug trafficking, and cyber operations, including cryptocurrency theft. According to investigators, these operations have extended internationally, with North Korean IT workers securing employment at foreign firms, including dozens of Australian companies, by using fabricated identities and manipulated software.
“The fundamental issue outsiders don’t understand about North Korea? That they’re incredibly entrepreneurial and flexible,” Professor Hastings said. “They must be to survive.” Despite these economic advancements and visible middle-class growth in Pyongyang featuring luxury fashion stores like Daesong, United Nations estimates indicate that nearly half of the country’s 26 million residents remain malnourished, highlighting a stark divide between urban elites and the general population.
Frequently Asked Questions
How is North Korea experiencing an economic boom despite sanctions?
According to analysts and foreign visitors, North Korea’s recent economic growth is primarily driven by arms sales and troop deployments to Russia worth an estimated $14 billion, increased trade with China, and illicit revenue streams generated by cyber operations and overseas workers.
What changes have recent visitors observed in Pyongyang?
Travel guides and international observers have reported a modernized skyline with high-rise buildings in districts like Hwasong, an increase in private electric and luxury vehicles, widespread smartphone usage for payments and ride-booking, and the opening of luxury fashion stores.
Are living standards improving for all North Korean citizens?
While reports indicate a rising middle class in Pyongyang with access to new consumer goods and housing projects, United Nations data shows that nearly half of the country’s 26 million residents continue to face malnutrition and difficult living conditions.
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