ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Economy

Economic turnaround enables Kim's weapons programs

Growth gives North Korea more resources for nuclear development

SOTARO SUZUKI, Nikkei staff writer | North Korea

SEOUL -- North Korea has made remarkable progress with its nuclear and missile programs in recent years, an achievement believed to owe partly to an economy that has come a long way from the famines of the 1990s.

Pyongyang has sought to pursue both economic and nuclear development under leader Kim Jong Un. North Korea's central bank estimates that real gross domestic product grew 3.9% last year -- the fastest in 17 years and a sharp turnaround from 2015's 1.1% contraction.

This expansion stems partly from infrastructure investment and mining of such resources as coal and lead. A thriving black market, built on a steady influx of goods from China, also plays a major role.

South Korean experts on the country agree that hunger is no longer a problem. This communist nation has even developed an affluent class, something the regime tacitly tolerates.

This economic growth fuels a costly weapons development program. Pyongyang has launched 13 missiles so far this year, and intercontinental ballistic missiles carry a price tag in the hundreds of millions of dollars.

The Seoul-based Korea Institute for Defense Analyses estimates that North Korea spent roughly $9 billion on defense in 2013, with just over 10% going to its nuclear and ballistic missile programs. By comparison, the U.S. is believed to spend just under 20% of its defense budget on all equipment. Pyongyang is believed to be keeping its spending on such weaponry as fighter jets and tanks within reason, in the knowledge that it could not beat Washington and Seoul in a conventional war.

Human resources are crucial as well. The government offers free housing in Pyongyang high-rises to scientists and other personnel involved in nuclear and missile development. And it is tolerant of failure, seeking to create an environment conducive to success.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more