Kim pro quo: North Korea is emerging from international isolation by backing Russia’s war in Ukraine

In July, the Bank of Korea estimated North Korea's economic growth at more than 3% for a third consecutive year. This marked a significant turnaround from the country's isolation during the COVID-19 pandemic, when its borders were closed and international sanctions continued to hinder trade. North Korea's resurgence can be attributed to the resumption of trade with China, large-scale development programs, and military cooperation with Russia.

Pyongyang initially responded to the pandemic with near-total self-isolation, causing its trade with China to plummet from $2.8 billion in 2019 to just $318 million in 2021. However, freight traffic gradually resumed, and by 2023, annual bilateral trade reached approximately $2.3 billion. This trade resumption provided North Korea with access to essential resources like fuel, fertilizer, machinery, and consumer goods, as well as opening up the Chinese market for its exports.

North Korea's leader, Kim Jong Un, prioritized construction and regional development, launching a program to build 50,000 new apartments in Pyongyang over five years. In 2024, the authorities introduced an even more ambitious 20x10 Regional Development Policy, which aimed at modernizing factories in 20 cities and counties over 10 years, focusing primarily on the production of food, clothing, and everyday consumer goods.

This shift in economic policy, while unprecedented for North Korea, has yielded some positive results. Satellite imagery shows construction beginning just weeks after the 20x10 policy's announcement, with factories appearing in participating localities within its first year. In 2025, the program expanded to include hospitals, leisure spaces, agricultural infrastructure, and other local projects. Pyongyang's appearance has transformed, with most of the new housing concentrated in the recently created Hwasong district.

Military cooperation with Russia has played a crucial role in North Korea's economic upturn. Since the summer of 2023, Pyongyang has emerged as a significant supplier of artillery shells and ballistic missiles for Russia, delivering over 15 million shells by August 2026. South Korean intelligence estimates North Korea's revenue from arms exports to be more than $10 billion, which has substantially aided the country's economy.

Additionally, the dispatch of about 15,000 troops to Russia has brought in hundreds of millions of dollars, although the exact amount reaching North Korea's budget remains unclear.

Nevertheless, the most significant impact of Russia cooperation is that it mitigates the effects of the sanctions imposed on North Korea in 2016. These restrictions were largely effective due to Moscow and Beijing's support, but the emergence of North Korea from international isolation suggests that the post-Cold War world order is beginning to unravel.