A recent UN report revealed that a large portion of North Korea’s overall income is brought
in through outsourced slave labor.
Primarily focused in China and Russia, tens of thousands of North Koreans are forced to
work as much as 20 hours a day, while up to 2.3 billion dollars a year in wages are collected
by their government.
But slavery isn’t the only criminal activity from which North Korea sees profit.
So we wanted to know, how exactly does North Korea make money?
Well, North Korea’s economy has always seen abysmal growth.
According to UN statistics, both North and South Korea started out with a similar GDP
in 1970,: around $300 dollars per capita.
By 2013, South Korea’s GDP had grown by nearly than 9,000%.
Meanwhile, North Korea’s GDP only doubled over those 4 decades.
But most financial figures surrounding their economy are unknown, as North Korea has one
of the most closed economic systems in the world.
This is the result of a cultural philosophy known as “juche”, or “self-reliance”.
The enclosed system is one of the ways that North Korea is able to farm out its citizens
in what is effectively slavery.
While some workers do see payment from their government, it is in the form of nearly worthless
local currency, the won, at a massively inflated exchange rate.
In North Korea’s black markets, a single US dollar can buy more than 8,000 won, while
the government offers an exchange of just 105 won.
But besides collecting for slave labor, North Korea also trades in other internationally
prohibited activities.
One North Korean defector reported that the country has allocated major agricultural zones
for growing opium.
They have also become well known for producing mass quantities of methamphetamines, the majority
of which go to China.
A 2008 congressional report found that the increasing drug trade over North Korean borders
was strongly linked to government sources.
However, later congressional reports disputed this link, pointing to private North Korean
drug traffickers as the source instead.
North Korea is also a hotbed of counterfeiting.
The US has accused their government of producing at least $45 million dollars in very high
quality $100 dollar bills, which are known as “supernotes”.
This counterfeiting operation is thought to net up to $25 million dollars a year in profit.
But perhaps the biggest benefactor of North Korea’s economy is actually China.
While North Korea has almost no money, they have considerable natural resources.
In 2015, North Korea imported nearly twice as much as they exported with China.
But this trade imbalance is actually beneficial to China, because it comes with mining contracts
for North Korean coal and zinc.
China is also one of the only countries to support North Korea with food, weapons, and
energy, in the face of international sanctions.
North Korea’s dishonest economic dealings may explain how they’ve avoided collapse
while sanctioned around the world.
As long as they continue an alliance with China and Russia to keep their limited trade
afloat, North Korea will keep exporting drugs, counterfeit bills, and slave labor.
North Korea’s outsourcing of slave labor is particularly disconcerting.
Check out this Seeker Daily video up top to learn more about why they started this practice.
Or, if you want to know how their secretive government actually works, check out our video
down below.
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