The Unexpected Rise of North Korea’s Economy

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**K. Oanh Ha** (0:09)
North Korea's economy is one of the smallest and most isolated in the world. But right now, it's growing fast. South Korea's Central Bank estimates North Korea's economy grew for a third straight year in 2025
That's despite international sanctions aimed at limiting the regime's access to money. And signs of North Korea's newfound prosperity are all over the country's capital.

**Cat Barton** (0:35)
The transformation on Pyongyang streets is remarkable. The city's skyline has been transformed. The streets used to be empty, and now you have traffic jams. There are more privately owned Chinese vehicles.

**K. Oanh Ha** (0:49)
Cat Barton is Bloomberg's sole beer chief. She covers the Korean Peninsula and says it's not just the economy that's booming.
North Korean leader Kim Jong Un is also having a moment.

**SPEAKER_4** (1:00)
Kim Jong Un's presence is particularly notable. It is his first foray into international diplomacy since he came into power.

**K. Oanh Ha** (1:08)
Last year, he was invited by Chinese President Xi Jinping to attend a military parade in Beijing to mark the 80th anniversary of the end of World War II.

**SPEAKER_5** (1:17)
You've got Kim Jong Un and Vladimir Putin front and center on the right and left hand side of President Xi. The imagery is very, very striking.

**K. Oanh Ha** (1:26)
It's all part of a remarkable turnaround for North Korea and for Kim, who spent much of his 15 years in power grappling with challenges, from international sanctions to global isolation. Then there were the failed talks with President Donald Trump over Kim's nuclear weapons program in 2019

**Cat Barton** (1:46)
Kim was broke. Kim was humiliated domestically because he'd staked political capital on this deal and this meeting with US President Trump. The North Korean economy had been completely hammered by sanctions. The Western powers had come together to block North Korea's ability to export. They didn't want Kim Jong Un to be developing his nuclear weapons program. Then you had the COVID-19 pandemic.
At that point, they sealed their own borders. So all the trade that they had had with China just ground to a halt.

**K. Oanh Ha** (2:20)
At the time, it looked like the sanctions were doing exactly what they were supposed to do. Keeping North Korea weak and dependent on outside help. Today, Kim is anything but that.
Over the weekend, President Donald Trump posted a throwback photo of him with Kim in 2019 and alluded to their bromance. I understand him. He understands me. You're doing war games.

**SPEAKER_1** (2:44)
I get along with him. You know, he didn't like Biden.

**K. Oanh Ha** (2:46)
And in a win for Kim, Trump directed the Pentagon to substantially reduce joint military exercises with South Korea.
Trump's been frustrated with Seoul for not providing more support for the Iran War. He said the drills were costly and sent an inappropriate signal to North Korea. In the last few years, Kim's also gotten cozy with Russia and China. Now he's got tens of billions of dollars in new cash flow and little reason to compromise with any of his enemies.

**Cat Barton** (3:18)
Kim doesn't have any incentive at the moment to come back to the negotiating table. He has money, he has diplomatic backing from Russia.
He's had Xi Jinping visit him in Pyongyang earlier this year. He's not in a position where he needs to cut out to Washington. So the idea of using these sanctions as a means of squeezing him to force him to give up his nuclear weapons is just not realistic at this stage.

**K. Oanh Ha** (3:50)
This is the Big Take Asia from Bloomberg News. I'm Oanh Ha. Every week, we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever-shifting region. Today in the show, North Korea's unexpected comeback. How did one of the world's most sanctioned countries start raking in billions?
And what happens when a pariah state finds a way to flex its power?
In 2020, North Korea was in dire straits. The COVID-19 pandemic forced the country to shut its borders and cut off trade with China, its largest economic partner. That pushed it deeper into isolation. At the same time, poor harvests were fueling a growing food crisis.

**Cat Barton** (4:43)
It was a very, very difficult period for North Korea. And then it was compounded over the course of 2020 by a series of bad harvests, bad flooding, weather issues. You know, the soldiers had had to go and rescue people.

**K. Oanh Ha** (4:56)
Bloomberg's Cat Barton says conditions had deteriorated to the point where Kim Jong Un appeared on state television and offered a rare public apology.