Nikkei Asia: North Korea reaps a huge economic boost from the Ukraine war
Pyongyang has secured cash, food and energy supplies from Russia in exchange for its military support. The transfers are estimated to add around 3% to North Korea's annual GDP. The effectiveness of the sanctions regime is now in question.
Nikkei Asia analysis shows North Korea has secured at least 8 billion dollars in flows from Russia since late 2023 in exchange for ammunition and troops. The figure represents around 3% of the country's annual GDP. Grain and oil deliveries make up most of the inflow.
Internal South Korean Unification Ministry briefings show food conditions in the north have improved markedly over the past two years. Child malnutrition has fallen below 20% for the first time since the 1990s. Pyongyang has used the foreign currency to partially circumvent China-border trade bans and increase electronics imports.
The UN Security Council sanctions panel will discuss its March report. Western officials are pushing for secondary sanctions to be extended to Russian banks. South Korea and Japan plan to announce an additional military exercise schedule in September. Regional risk appetite declined, with the Kospi and Nikkei pulling back modestly.
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