North Korea’s October 19th missile test and the economy

By: Benjamin Katzeff Silberstein 

North Korean missile tests often lead to discussions about what they can tell us about the country’s overall strategic position and thought. So it is natural to ask after today’s missile launch, what does it tell us about North Korea’s economic situation? Is it a display of confidence, crisis, or neither?

I’m not going to attempt to give a solid, certain answer here, but two things are interesting about the timing and contest.

First, the launch came the day after news reports that trade has expanded significantly between China and North Korea. Imports by China have more than doubled, as have exports from China to North Korea. None of these figures are near pre-pandemic levels, but the increases are still significant. Daily NK reports confirm that the authorities are concerned about and trying to mitigate the soaring prices of imported goods, driven largely by the virtual blockade of the border to China. So from this point of view, the missile launch may express confidence that the domestic economic situation is improving or will soon improve.

Second, and contrary to the above, it may express confidence in North Korea’s ability to pull through the current difficulties despite the lack of clear improvements on the horizon. After all, the uptick in trade data may be an anomaly, and what’s most important is whether it is part of a longer-term pattern. In other words, a missile launch at a time when the economy is in many ways near a crisis, may attempt signal Pyongyang’s ability to persevere and continue its weapons development despite the difficult economic circumstances.