North Korea Is Broke, But Sitting On $10 Trillion In Mineral Wealth
Key point: Due to international sanctions, the North’s mineral and energy resources likely will remain untapped for the foreseeable future, barring an abrupt shift in policy by Pyongyang.
With China accounting for an estimated 90 percent of North Korea’s international trade, the sanctions are set to bite on one of the regime’s last major remaining sources of cash.
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“There are very limited ways for North Korea to make money: selling weapons, smuggling and mining,” according to Choi Kyung-soo, president of the North Korea Resources Institute in Seoul.
“Because of sanctions, it’s very hard for them to make weapons or to sell [narcotic] drugs, so the only legitimate way for North Korea to make money these days is from selling minerals.”
Yet should the situation change, Russia and even South Korea are reportedly eyeing plans to tap the North’s mineral wealth.
In May, South Korea’s infrastructure ministry invited bids for possible infrastructure projects in the North, including those concerning the resource sector. It reportedly sees such resources as potentially covering the cost of repairing the North’s infrastructure, should reunification occur.
Another strategic gamble for Kim Jong-un could be abandoning plans to become a nuclear power in favor of international support to develop the nation’s mining and energy sector.
Previously, the regime has traded off its nuclear ambitions in return for international economic aid. The estimated $10 trillion in resource wealth could fund “several more generations of leaders called Kim,” as the Guardian puts it.
In the meantime though, the North’s mineral and energy resources likely will remain untapped for the foreseeable future, barring an abrupt shift in policy by Pyongyang.
Anthony Fensom, a Brisbane, Australia-based freelance writer and consultant with more than a decade of experience in Asia-Pacific financial/media industries. You can find him on Twitter: @a_d_fensom.
This article originally ran in December of 2017.
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