North Korea Is Desperately Seeking Foreign Currency to Fund Its Military – The Diplomat

The Koreas | Economy | East Asia

North Korean authorities recently ordered trade officials to collect even more foreign currency, citing the fact that the country’s military industry urgently needs money, Daily NK has learned.

Speaking on condition of anonymity for security reasons, a source in China told Daily NK last Tuesday that a North Korean consulate in China gathered North Korean trade officials in mid-June and ordered them to gather funds and identify overseas investors more aggressively.

Consulate officials specifically mentioned North Korea’s recent failure to put a military spy satellite into space: “China has completely lifted its COVID-19 quarantine, so it’s best to identify new investors and make money rather than just sitting around. The defense sector needs more money now because the government’s satellite launch failed and it must prepare for a second launch.”

North Korean trade officials in China already knew about the failed satellite launch, but many were surprised when the consulate mentioned it so explicitly during the meeting, the source said.

On May 31, North Korea launched the Chollima-1 space launch vehicle carrying the Malligyong-1 military reconnaissance satellite, but the vehicle crashed due to engine trouble.

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Reporting on the Eighth Enlarged Plenary Meeting of the Eighth Central Committee held from June 16 to 18, the Rodong Sinmun stated on June 19 that the Political Bureau “strictly reviewed the shortcomings that were revealed in some fields that cannot be overlooked. The most serious one was the failure of the military reconnaissance satellite launch, the important strategic work in the field of space development, on May 31.”

North Korea admitted the launch’s failure just two hours, 30 minutes after liftoff through the Korean Central News Agency (KCNA) for foreign audiences. However, media outlets consumed by North Koreans made no mention of the failure until the report on the enlarged plenary meeting of the Central Committee.

The consulate’s mention of the satellite failure came prior to the expanded plenary meeting, leaving some of the trade delegates bewildered.

Trade officials at the meeting soon realized, however, that the mention of the satellite’s failure was aimed at emphasizing the urgent and unavoidable need to expand foreign currency earnings, the source said.

During the meeting, the consulate encouraged trade officials to identify businesspeople friendly to North Korea with a view to obtain financial cooperation or introductions to other investors, and that they could be rewarded with the Hero of the Republic honorific if they do so.

Essentially, the consulate ordered trade officials to identify collaborators who can send or launder money, even if these people cannot directly invest in North Korea.

Daily NK reported in late June that the recent expanded plenary meeting called on the Ministry of Foreign Affairs, Ministry of External Economic Relations and Reconnaissance General Bureau – all of which manage trade officials and laborers overseas – to aggressively reach out to overseas investors and identify people who can help raise funds.

This article first appeared in Daily NK, which contacts multiple sources inside and outside North Korea to verify information. The Diplomat was not able to verify the claims independently.