This study conducts a multifaceted analysis of the evolving relationship between North Korea and Russia following the Russia Ukraine war, employing objective data and rigorous quantitative methodologies. Using big data based indicators that quantify interstate relations, the study first examines trends in North Korea Russia relations over the past decade. The analysis shows that bilateral relations deteriorated sharply after 2016, when Russia, as a permanent member of the UN Security Council, joined international sanctions against North Korea. Relations began to recover gradually after 2018, as North Korea pursued summit diplomacy and sought re-engagement with the global community. In 2020, this recovery was again disrupted when North Korea sealed its borders, citing COVID-19 preventive measures. This trajectory reversed once more following Russia’s invasion of Ukraine in 2022, ushering in a swift alignment of strategic interests and closer bilateral ties that brought cooperation to a level unprecedented in recent history. The study next examines North Korea Russia external economic relations through a data-driven lens. North Korea’s foreign trade structure remains heavily oriented toward China, with Russia accounting for only a marginal share. Nevertheless, Russia continues to serve as a key supplier of strategic goods, including petroleum products and power generation equipment. Russian investment in North Korea has been largely confined to transportation and logistics infrastructure, and Russian firms have generally maintained a cautious stance due to high political risks and the burden of international sanctions. However, the outbreak of the Russia Ukraine war has altered this dynamic. Russia’s acute labor shortages have coincided with North Korea’s need to secure foreign currency, and there are indications that the overseas dispatch of North Korean workers has continued despite the sanctions environment. In the tourism sector, while North Korea has sought to attract Russian tourists, foreign currency earnings remain negligible, suggesting that the economic spillover effects from tourism cooperation are likely to remain marginal. Furthermore, the study empirically evaluates the impact of North Korea Russia military cooperation on the North Korean economy. Combining the Korea Institute for Industrial Economics and Trade (KIET)’s North Korean Industry and Enterprise Database with satellite nighttime light imagery and jangmadang(market) exchange rate and price data, the analysis finds that production activity increased significantly in regions centered on heavy industry and military-related industries following the strengthening of military cooperation. In particular, nighttime light intensity rose sharply for firms producing artillery shells and small arms, directly related to the Russia Ukraine war. In contrast, industrial activity in light industries, including food processing, declined, indicating an intensifying pattern of unbalanced, military-centered growth. This trend is also corroborated by the Bank of Korea’s estimates of North Korea’s economic growth rates. Since 2023, heavy and chemical industries have shown notably strong growth, while light industries have remained stagnant. These findings suggest that while military cooperation has bolstered productivity in specific sectors, especially military and heavy industries, these gains have not extended to the civilian economy. Moreover, given recent spikes in exchange rates and prices, it remains debatable whether Russian supplies of food and petroleum products have improved general living standards. Overall, the post-cooperation growth of the North Korean economy appears structurally skewed toward the military sector rather than a broad-based industrial recovery. These findings offer several policy implications. North Korea is widely viewed as one of the primary beneficiaries of the Russia Ukraine war. Although the specific goods and quantities North Korea has received in exchange for military supplies and troop deployments remain unclear, the exchange has likely had a positive impact on the North Korean economy. This study demonstrates that heavy and chemical industries, including munitions factories, have been the principal beneficiaries of the deepening alignment. However, the expansion of military supplies to Russia warrants close attention, as it may induce broader changes to North Korea’s industrial structure and technological capabilities that extend beyond simple military cooperation. While increased munitions production stimulates core heavy industrial sectors, including metals, machinery, chemicals, and electronics―potentially catalyzing civilian industries and improving household welfare to some extent―the domestic markets are mired in severe instability, marked by soaring prices, exchange rate volatility, and intensified state control following the COVID-19 pandemic. This appears to have exacerbated the polarization between the formal sector, which reaps the rewards from closer ties, and the marginalized informal sector. Should the Russia Ukraine war end, the munitions-driven special demand of Russia will subside. If the North Korean regime maintains its strict control over jangmadangs(markets) after the boom, the economic hardships facing the North Korean population are likely to intensify.

Following the pandemic, North Korea has recalibrated its foreign relations, forging stronger ties with Russia through artillery support, troop deployments, and formal treaties―strategic moves to enhance leverage in U.S. negotiations. While Trump's second term presents opportunities for dialogue, Pyongyang's "two-state theory" and Moscow alignment have transformed regional security dynamics. Future U.S.-North Korea engagement will depend on U.S.-Russia relations and Moscow's Pyongyang policy. At recent party meetings, North Korean leadership praised 2024's economic performance and reaffirmed commitment to completing the Five-Year Plan by 2025. Marking the 80th anniversaries of the Workers' Party and national liberation, North Korea is implementing economic reforms and infrastructure development ahead of the 9th Party Congress. This edition includes a timeline of U.S.-North Korea relations since 2000.

Remote sensing technology, through revolutionary advancements in satellite imagery, is fundamentally transforming North Korean studies. Multi-layered analysis capabilities through optical, thermal band, and radar satellite imagery now enable precise observations of environmental changes, land use transitions, urbanization patterns, economic disparities, and structural transformations. The New Space era, with enhanced commercial satellite capabilities and sophisticated AI-based analytics, has established an unprecedented framework for empirically understanding this closed nation. These breakthroughs yield substantial results across domains, including the surveillance of logistics movements through customs, ports, and railway hubs; scrutiny of developmental patterns in major urban centers such as Pyongyang, Kaesong, and Rason; and evaluation of forest restoration policy efficacy. While technical limitations persist regarding data accuracy and algorithmic reliability, the integration of multi-sensor data and refined analytical techniques offers solutions. With continued technological advancement and international collaboration, remote sensing is poised to serve as a pivotal instrument in enhancing North Korean research, contributing significantly to economic planning, environmental management, and policy formulation.

  Impact of Strengthening Sanctions on the North Korean Market - Choi, Ji Young Korea Institute for National Unification - April 10, 2023 - [Section 1. Introduction]   The North Korean economy is of great interest for various reasons, including the detection of any humanitarian crisis and the evaluation of the regime's stability and economic reforms. Since 2016, there has been an added interest in assessing the impact of sanctions and predicting their effectiveness. Assessing the impact of sanctions on the economy alone is insufficient in predicting their effectiveness since the ultimate goal of sanctions is to induce policy changes in target states. Sender states impose economic pressure on target states by severing trade ties and thus exerting pressure on their policymakers. Therefore, sanctions have both economic and political consequences, making it challenging to evaluate their overall effectiveness by solely examining the economic conditions of the target state. The effectiveness of sanctions is determined by various factors, and theoretical discussions aim to identify these variables. Initially, studies evaluated the success rate of sanctions through case studies, while subsequent studies focused on identifying the factors that influence effectiveness. Factors that affect the success rate of sanctions include the political system of the target state, the extent of their trade dependence on sender states, and the involvement of third parties that may weaken or strengthen the sanctions' impact. These variables also reflect the unique characteristics of the target state. If the effectiveness of sanctions is determined by the individual characteristics of target states, then it is important to consider these factors when evaluating the economic impact of sanctions. Previous studies have suggested that the success rate of sanctions is influenced by major variables such as the political system of the target state, their economic dependence on the sender states or the global economy, and the existence of third countries. When applying these variables to North Korea, it is possible that the effectiveness of sanctions against the country is low due to its non-democratic political system. However, it should be noted that the greater the negative impact of sanctions on the people's livelihood, the more pressure there may be for policy changes. In terms of economic dependence, North Korea's reliance on the international economy increased significantly under Kim Jong Un's leadership and remained high until just before the imposition of sanctions, which could boost the effectiveness of sanctions against the country. Finally, China is a critical player in the impact of these sanctions, as it has the potential to either strengthen or weaken their influence on North Korea. The second and third factors identified present conflicting implications for the effectiveness of sanctions on North Korea. Although North Korea's dependence on the global economy increased significantly prior to the implementation of sanctions, this was primarily due to trade ties with China, which could play a decisive role in the impact of the sanctions. In this sense, the effectiveness of sanctions is largely contingent on China's compliance. The first and second factors are interconnected since the impact of sanctions on the people's livelihood is determined by the external dependence of relevant industries. The North Korean market plays a critical role in determining the country's individual characteristics. Firstly, an analysis of North Korea's market conditions is essential in understanding how sanctions affect the livelihoods of its citizens. While policy decisions in response to sanctions are not democratically made, it is evident that hardships in livelihoods have significant political implications. Secondly, the effectiveness of sanctions is closely linked to the extent of foreign trade dependence in sustaining the livelihoods of North Koreans. The allocation of resources for consumer goods, including food, is partially done through markets. Although the domestic production of major foods is high, the proportion of imported goods, particularly processed and durable goods, was relatively significant before the imposition of tougher sanctions, with most imports sourced from China. Lastly, the North Korean market operates under the unique dual economic structure of the regime, which requires careful consideration to fully comprehend its operations. North Korea has maintained a classical socialist system for an extended period of time, but since the mid-1990s, it has operated under a dual economic structure consisting of a formal planning sector and an informal market sector. While the official regime seeks to maintain a socialist planned economy, self-sustaining economic activities also take place on an informal basis. However, government intervention and control in resource allocation of the national economy have significant effects on market conditions. Policy interventions in the market are sometimes implemented to alleviate the difficulties faced by residents, but they are also bolstered to focus resources on the planned sector. As sanctions against North Korea continued in 2020, changes were detected in the regime's policy toward market intervention and control. This chapter evaluates how the economic impact of sanctions has been reflected in the market under North Korea's unique dual economic structure, taking into account the changes in the regime's policies toward market intervention and control.   [Section 2. North Korea’s Dual Economic Structure]   The study of North Korea's economy places significant emphasis on the discussion of marketization, which is approached with the understanding of a dual economic structure. The North Korean marketization process is characterized by two distinct features, namely "marketization from the bottom" and the "complex interdependence of the plan and the market." In contrast to China and Vietnam's "marketization from above," which involved a state-led gradual economic reform while maintaining a communist political system, North Korea's marketization began with spontaneous market activities of households in the mid-1990s as the planned economy partially collapsed. The acceptance of marketization was institutionalized ex-post in the 2000s, as previously discussed in the works of Lee (2005) and Lee et al. (2009). The North Korean market is characterized by "marketization from the bottom" and a "complex interdependence of the plan and the market." Unlike China and Vietnam, which implemented state-led gradual economic reforms while maintaining a communist political system, marketization in North Korea began with the spontaneous market activities of households in the mid-1990s when the planned economy was partially paralyzed. Institutional acceptance of marketization occurred ex-post in the 2000s. Another unique characteristic of the North Korean market is the "complex interdependence of the plan and the market," which distinguishes it from the black market and the second economy of the old purely socialist economy. In the socialist state, the dual economic structure was clearly divided according to the type of ownership of the production unit and the resource allocation method. Resources were allocated by planned prices when the production unit was state-owned or cooperatively owned, and by market prices when privately owned. However, such a symmetrical distinction is difficult to observe in the North Korean economy today. State-owned enterprises procure raw materials at planned prices and sell the products they produce at both planned and market prices. When procuring raw materials from the planned sector is difficult, they turn to the market sector. Thus, activities for "public purpose" to achieve the goals of the planned sector within state-owned enterprises and "private interest seeking" activities in the market sector are carried out together. Privately owned units, on the other hand, rely entirely on market mechanisms and engage in "private interest seeking" activities. Kim and Yang (2014) define both "personal profit-seeking" activities through planning and market mechanisms in state-owned and cooperative-owned units and those by privately owned production units as the "informal sector." Such a complex plan-market interdependence relationship also makes it difficult to analyze the North Korean economy. Examining the characteristics of the North Korean dual economic structure is necessary to understanding the impact of stronger sanctions on the market, that is, the informal sector. Figure 1 shows the circulation of income within North Korea’s dual economic structure.    

Announcing the Renewal of 'North Korean Economic Studies' We are pleased to announce the relaunch of the 'North Korean Economic Studies' section in our 'TOPICS' category. The newly designed section is now easier to navigate, and provides more comprehensive services and better access to major publications by the Office of the North Korean Economic Studies including 'DPRK Economic Outlook', 'Dialogue' and 'Working Paper.'   'DPRK Economic Outlook' outlines the annual trends of the North Korean economy, 'Dialogue' features interviews with leading experts on North Korea, and 'Working Paper' presents analyses of prominent topics. New issues of 'Dialogue' and the 'KDI Review of the North Korean Economy' are now available (links below), and our annual issue of 'DPRK Economic Outlook' will be updated soon. ▶ Dialogue on the North Korea Economy, April 2021: https://bit.ly/3b4VY4M ▶ KDI Review of the North Korean Economy, April 2021: https://bit.ly/3bNVvEx   We kindly ask for your continued interest and support, and hope that you enjoy our new 'North Korean Economic Studies' section and all that it has to offer! ▶ Click here to view: https://bit.ly/3b4VY4M   * For questions and comments, please e-mail us at oyuri@kdi.re.kr

 For researchers who study the North Korean economy, one of the most unknown and interesting areas is North Korean statistics. There are many questions such as: Do statistics on the North Korean economy even exist? If not, how do overseas researchers conduct their studies? and If so, can we trust them? What statistics are published by the South Korean government and other global institutions? The list goes on, but no one has come up with a conclusive answer.   This is why we chose North Korean statistics as the first topic of the new series. Numerous questions were dealt with on the topic and their significance for studies on the North Korean economy. We hope you find this article useful and informative.   ♦ Date and Venue: KDI meeting room, Tuesday, April 28, 2020 ♦ Interviewer: Cho, Byungkoo (Senior Fellow at KDI) ♦ Interviewee: Lee, Suk (Senior Fellow at KDI)    Before we begin, I would like to thank Dr. Lee, Director of the KDI Office of North Korean Economic Studies, for his participation. To lead us off, let us examine the statistics from and research on North Korea. So, Dr. Lee, what are your thoughts on North Korean statistics? Contrary to the general opinion that there is no such thing, do they exist or are we, the outside world, simply unaware? Also, if they do exist, how has ‘availability’ changed over time? First and foremost, it is an honor to be the first interviewee for the new Dialogue series. It is especially meaningful that you, Dr. Cho, my predecessor, are conducting this interview. Although I have talked about North Korean statistics on many occasions, I will dive deeper into the issue today, and offer more details. To your first question about the existence of North Korean statistics, the most accurate answer would be “sometimes.” In other words, it is erratic and depends on the circumstances and point in time. To present a clearer picture, we need to divide by period. There are a total of four phases: the first starts from Korea’s liberalization from Japan in 1945 to 1960; the second is from 1961 to the end of the 1980s; the third from 1990 to 1995; and the last is from 1996 onwards.   Let’s begin with the first phase. North Korea declared itself a socialist economy, and thus, adopted the principles of social-ism for the economy, politics, and many other areas. Statistics were no exception, and were compiled and published based on the same fundamentals. The first aspect of this phase is that statistics were regularly published in North Korea during this pe-riod. For example, in the appendix for the Korean Central Yearbook, a major offi-cial publication, you can find statistics on a wide range of areas including demograph-ics and industrial output, among others. Although they are not detailed, neverthe-less, they were a recurring feature. Lat-er, the statistics were separately compiled and published under the title DPRK Col-lection of Statistical Data on the Development of the People’s Economy (1946-1960), both in Korean and English.   The second aspect is that statistics were a part of all official statements. General-ly, a socialist state is governed not through law but through orders. These orders were called “cabinet decrees” in North Korea, and most included statistics. For instance, the cabinet decrees aimed at concentrat-ing the buying and selling of cereals on the central authorities to sustain its food rationing system in the 1950s included re-gional crop statistics. This is only one ex-ample, and in fact, statistics were incorpo-rated into other official documents such as the ‘People’s Economic Development Plan,’ North Korea’s first economic plan under the banner of socialism, and statements from high-level meetings, including the Su-preme People’s Assembly.   "although the period from 1945 to 1960 was certainly not bountiful, statistics on a wide-range of areas were regularly published in North Korea." The last aspect of this phase is the use of statistics by politicians. Kim Il-sung cit-ed statistics when commenting on the eco-nomic sector such as agriculture and in-dustry, as well as on other various issues such as population, and social groups. The practice of using statistics was adopted not only by the supreme leader but also by other senior officials, including cabinet ministers and the executive members of the Supreme People’s Assembly. More in-terestingly, economists as well as politicians cited various statistics when they wrote ar-ticles for economics magazines which do not exist anymore but at that time served as a channel to learn and promote ‘Marxist-Leninist economics’ or ‘Soviet economics.’ As you can see, although the period from 1945 to 1960 was certainly not boun-tiful, statistics on a wide-range of areas were regularly published in North Korea. And, these figures have enabled the outside world to, at least in part, conduct their re-search on the North Korean economy. In fact, Dr. Chung, Sang-hoon’s research in the 1970s used statistics that had been released up until the 1960s. As far as I know, the study was the first earnest attempt in the field.   Before we go any further, you say that statistics existed in North Korea until 1960, but are they the same as what we know them to be today? Good question. The statistics produced in North Korea at that time were quint-essentially socialist, so they vastly differ from our general understanding of statis-tics. This can be illustrated in many ways, but I will give you one example that will be easier to understand. Most statistics we see today are physical statistics. That is, if 1.28 million tons of steel were produced in South Korea in 1961, then, 1,280,000 would be recorded as the steel output and the fig-ure would be announced as the official sta-tistic. A socialist economy, however, also uses other methods. The most typical is the index number. Say, 1950 is set as the base year and the amount of steel produced is 100, then the steel output for 1960 would be announced as 123. There is also the growth rate. For instance, a statement from a so-cialist state would say, “Steel production in 1957 grew 53% compared to 1950.” Of course, we could infer the physical statistics from both if the accurate physical statistics for the base year (1950) were available.   "From the early 1960s until the end-1980s, he authorities did not publish any statistics at all. This period is often called the ‘statistical blackout.'" Unfortunately, in the case of North Ko-rea, the physical statistics for the base year were rarely published. Also, the base years for the index numbers and growth rates frequently changed. For example, the base year for 1960 would be set at 1950, but that for 1961 would be set at 1955. So, although we have the statistics up until 1960, it is impossible for us to retrieve a complete time-series dataset. There are other serious issues like the fact that, in most cases, there are no physical statistics. As to why North Korea would use such methods, I would think it is because, on the one hand, it wants to show off its seemingly rapid eco-nomic growth both internally and exter-nally, and on the other, to conceal the eco-nomic realities. Although, this phenonenon is not limited to North Korea and can be found in other past socialist economies, such as the Soviet Union.   Your insight into North Korean statistics, or rather socialist statistics, is very intriguing. Then, what about after 1960? Although statistics were regularly pub-lished between 1945 and 1960, they disap-peared from the Korean Central Yearbook in the early 1960s. They gradually stopped appearing in official documents after the Korean War, and then, all but disappeared by the end of the 1950s. From the ear-ly 1960s until the end-1980s, the authorities did not publish any statistics at all. This pe-riod is often called the ‘statistical blackout.’ The absence of statistics, of course, hin-dered research on the North Korean econ-omy, and created the general perception that statistics do not exist in North Korea. However, from the perspective of us re-searchers, we were able to base our studies on three exceptions. The first exception is the statistics com-piled and published by the South Korean government. There was a demand for sta-tistical data on the North Korean regime to conduct research and so, efforts were made on two fronts. Firstly, the Board of National Unification, the predecessor of the Ministry of Unification, began gath-ering and organizing quasi-statistics from North Korean media reports and oth-er available sources. Let’s assume that in his 1975 New Year’s address, Kim Il-sung announced that “Last year, our people achieved a dazzling accomplishment in the battle to meet the harvest goal of 7 million tons of grain.” Then, the Board presumes that North Korea’s grain production for 1974 was roughly 7 million tons. Of course, this is not statistics in the general sense of the word because we are unable to confirm whether the accurate figure is 6.99 million tons, 7.01 million tons, or 7.15 million tons. Regardless, taking into account that these figures do contain some statistical infor-mation, they were compiled under sever-al categories such as gross macroeconom-ic output, industry, infrastructure, etc. The data were used by the Board in the 1990s to publish Collection of North Korean Economic Statistics. For researchers of the North Korean economy, these publications are a pre-cious source of data for the blackout period. Apart from the Board, other rel-evant agencies in South Korea seem to have made similar efforts to systematical-ly gather information related to North Ko-rean statistics. With the belief that South Korea was in competition with the North in terms of regime, extensive efforts were made to evaluate North Korea’s econom-ic capabilities. During this process, vast amounts of statistical data on the North were required, and so, pertinent actions were taken. So, from our point of view, these endeavors serve as valuable stepping stones in our studies.   For more, please refer to the attached file.