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Who still does business with North Korea?

Inside North Korea
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Kim Jong-un, North Korea's leader, reacts jovially after conducting a successful missile test in May.
STR/AFP/Getty Images
Kim Jong-un, North Korea's leader, reacts jovially after conducting a successful missile test in May.
While China is comfortably its most important economic ally, North Korea also maintains a global network of shadowy deals, pacts and agreements.
N orth Korea’s nuclear ambitions continue to send tremors around the world. At noon local time on September 3, the so-called Hermit Kingdom conducted its sixth nuclear test: its first during the presidency of Donald Trump, and its most powerful ever. The blast, which produced a 6.3 magnitude earthquake, was felt in neighbouring South Korea, China and as far afield as Argentina.
By now, the international community’s response to Kim Jong-un’s nuclear sabre-rattling has become formulaic. National governments and international communities from Beijing to Brussels rushed to condemn Pyongyang, the world’s press talked up the possibility of a nuclear war, and President Donald Trump took to Twitter.
Having first taken aim at South Korea, an American ally for the past 67 years, for their new president’s “talk of appeasement” with Mr. Kim, Mr. Trump prompted many brows to furrow when he suggested that the US was considering “stopping all trade with any country doing business with North Korea.”
Ostensibly, Mr. Trump’s extraordinary threat appears to have been aimed at China, Pyongyang’s most important ally and the recipient of 83% of its exports. Mr. Trump, and many of his predecessors, have sought to chide Beijing into applying more pressure on Pyongyang, with little success. However, none have gone so far as to suggest that the US could sever its trading ties with China, its largest trading partner.
Experts unanimously agree that Mr. Trump’s threat is an empty one; the global economic chaos caused by a Sino-American trade war would be monumental. Nonetheless, the president’s bellicose fiscal finger-wagging does prompt an interesting question: Aside from China, who else does business with North Korea?

 Sanctuary in Southeast Asia 

Despite Pyongyang’s apparent isolation, it traded with nearly 80 countries in 2016.
“No country comes close to China’s economic relationship with North Korea,” Tristan Webb, a senior analyst at research organisation NK Pro, told The World Weekly. “Other countries are still important to the North for general trade however, particularly Singapore.”

Singapore, North Korea’s eighth largest trading partner, saw its trade with Pyongyang plummet by 90% in 2016. Nonetheless, it and other Southeast Asian countries have historically treaded carefully with Pyongyang. Vietnam was the first country to establish diplomatic relations with North Korea in 1950, and Cambodia followed suit little over a decade later. It is not uncommon to see North Korean luxury goods for sale on the streets of Singapore.
Trade between North Korea and the Philippines increased by 171% in 2016, though the Philippines suspended its trading relations with the North on September 8. 
However, in recent months, tentative friendliness has given way to hostility. In February Kim Jong-nam, the half-brother of North Korea’s leader, was killed with a nerve agent in Kuala Lumpur. Ever since relations with Malaysia have soured.
The incident exposed the extent of North Korea’s foothold in Southeast Asia. Police investigations into Kim Jong-nam’s murder revealed a web of North Korean operatives embedded in Malaysia, who are said to have aided in the assassination’s planning and execution. Both Singapore and Malaysia have now ended visa-free travel for North Koreans, which had been in place for years.

 Courting Moscow 

North Korea shares a 17 kilometre border with Russia, and Moscow has been quietly carving out a significant role for itself as tensions between Washington and Pyongyang ratchet up.
Speaking in China this week, Russian President Vladimir Putin denounced US plans to increase sanctions on North Korea, lambasting economic measures as “useless and ineffective” and suggesting that the international community offer security guarantees to Kim Jong-un. “They’ll eat grass,” Mr. Putin told reporters, “but they won’t abandon their programme unless they feel secure.”
The Washington Post reports that the Kremlin has been actively trying to engineer backchannel diplomatic discussions between North Korea and the Trump administration. Moscow has previously advocated a ‘freeze-for-freeze’ fix to the North Korean missile crisis, suggesting that the US and South Korea abandon their joint military exercises in the Korean Peninsula in return for Mr. Kim shuttering his nuclear activities. Both parties currently see that proposal as a non-starter.
Vladimir Putin greets former Supreme Leader Kim Jong-il in Pyongyang in 2000
Vladimir Putin greets former Supreme Leader Kim Jong-il in Pyongyang in 2000. Sovfoto/UIG via Getty Images
Economically, Mr. Webb explains, Russia’s relationship with North Korea “is not very important at the moment.” As it stands, Moscow and Pyongyang are reportedly attempting to increase their trade volume to $1 billion per year by 2020, though Mr. Webb thinks this is unlikely; trade in 2016 was apparently worth just $68 million, down from $92 million in 2014.
But, he adds, “it could gain a massive role if inter-Korean relations improve.” South Korea’s new president, Moon Jae-in, favours dialogue with the North.
“Russia would look forward to an astounding treasure trove of economic cooperation projects, connecting its rail, electricity, and gas networks with South Korea,” he told TWW. “That would not only be a boon for the Russian Far East, but would place Russia as a new conduit for trade routes between Europe and Northeast Asia.”
While the flow of capital between the two countries, as of yet, remains limited, the flow of labour is not. With sanctions squeezing North Korea’s ability to produce many goods (other than missile parts), Mr. Kim’s government has reportedly sent tens of thousands of its impoverished citizens to live and work in Russia with the aim of earning money for the state.
North Korean labourers helped construct a new football stadium in St. Petersburg, which will be used in next year’s World Cup, and are allegedly working on a series of luxury apartments in central Moscow. A Vladivostok company which employs a number of North Korean painters described them as “hard-working and orderly. They will not take long rests from work, go on frequent cigarette breaks or shirk their duties.”
However, while Russian employers might relish their work ethic, human rights groups report that North Korean expats are working and living in “slave-like conditions”, and several have been found dead around worksites in Moscow and St. Petersburg. Moreover, a report by a Seoul-based human rights group last year said Mr. Kim’s government seizes most of the workers’ earnings. Pyongyang allegedly earns at least $120 million annually from labourers sent to Russia.

 Circumventing sanctions 

Mr. Kim needs all the money he can get.
North Korea is the most heavily sanctioned country in the world, yet it continues to churn out missiles and advance its nuclear capabilities. Sanctions, it seems, have been unable to grind the North Korean economy to a halt.
A UN report, released in February, concluded that Pyongyang was evading international sanctions via a complex networks of overseas companies and illegal trade in prohibited goods, specifically arms.
North Korea has reportedly forged agreements with seven African countries to train soldiers, build infrastructure and sell a vast array of military equipment. Mr. Kim’s government apparently supplied Sudan with sophisticated surface-to-air missile systems. In Mozambique, North Korea signed a $6 million contract to supply anti-tank artillery and radar technology. It has trained the Angolan presidential guard in martial arts, and in Namibia, North Korean labour and parts helped build a munitions plant. The UN found that just 11 out of 54 African nations regularly report compliance with international sanctions against North Korea.
Mr. Kim has fashioned working relations with several countries in the Middle East, too. James Hoare, the former British chargé d’affaires in Pyongyang, describes “extensive links with Pakistan, including nuclear links, Egypt and Iran - the latter of which also included nuclear and missile matters. There were also links with Syria.” A leaked State Department memo in 2015 revealed that the United Arab Emirates had purchased $100 million worth of weapons from North Korea to support the Saudi-led military intervention in Yemen.
Namibia’s founding President Sam Nujoma greets a North Korean diplomat in Windhoek in 2008
Namibia’s founding President Sam Nujoma greets a North Korean diplomat in Windhoek in 2008 . STR/AFP/Getty Images
For the US to sever trade with all countries dealing with North Korea would thus be a mighty undertaking.
While the key to the future of the Korean Peninsula likely still lies with China, the North has been able to carve out a network of economic and strategic support significant enough to largely mitigate the impact of international sanctions.
If the country’s obscure and often illicit international partnerships continue to sustain Mr. Kim’s nuclear ambitions, then Mr. Trump and the rest of the international community may be forced to pursue other means of containing North Korea.
Henry Goodwin
The World Weekly
07 September 2017 - last edited 07 September 2017