(Bloomberg) -- Kim Jong Un’s bellicose rhetoric in recent weeks has revived speculation that the North Korean leader might be preparing for war.
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But Kim has at least one fresh reason to avoid plunging into conflict: North Korea’s economy is quietly improving, with growth on pace to reach the fastest level in nearly a decade.
Pyongyang’s sales of ballistic missiles, artillery shells and other military equipment to sustain President Vladimir Putin’s aggression in Ukraine is providing a jolt to an economy long isolated by international sanctions.
While that may allow Kim to shun engagement with the West for years to come, it also reduces pressure on the 40-year-old leader to gamble on more drastic measures, including war.
“Kim Jong Un knows well that nuclear use or war means the end of his regime,” said Chun Yungwoo, South Korea’s former chief envoy to international nuclear disarmament talks with North Korea.
Combined with growing trade with China, North Korea’s economy could expand 0.5% this year, according to Anwita Basu, head of Europe Country Risk for BMI and one of the few economists who tracks the nation. That would be the most since 2016, when tougher United Nations sanctions over Kim’s nuclear and weapons programs came into effect.
That level of growth won’t make up for the lost output of recent years, when the country’s borders were closed due to Covid restrictions. But Basu says her estimate is partly based on data from South Korea’s central bank, which doesn’t fully account for North Korea’s defense sector.
“Increased demand for North Korean arms will necessarily raise revenue for the sector,” Basu said, adding that by some estimates, about half the country’s population is employed in some capacity by the defense industry.
With the war in Ukraine grinding toward its third year, satellite imagery since October shows a steady flow of trade between North Korea and Russia that South Korea estimates includes more than 2 million rounds of artillery and several ballistic missiles.
Ballistic missiles could be valued at several million dollars each and Russia would probably need to purchase launchers for the North Korean systems. With the cost of 155 mm artillery shells used by NATO countries now at about $3,000-$4,000 each, the total value of the munitions sent from North Korea to Moscow so far could reach into the billions of dollars, a huge figure for an economy that South Korea’s central bank pegged at about $24.5 billion in 2022.
And while there isn’t a full accounting of what Kim is receiving in return, some of what Moscow is believed to be providing includes technology and support for Kim’s military programs, US Secretary of State Antony Blinken said during a visit to Seoul in November.
The boosted trade and economic jolt also mean North Korea’s blustery talk of war, which recently includes abandoning a goal for “peaceful” reunification with South Korea, is likely just that: bluster.
Speculation has mounted that Kim has turned the corner on his bellicose outbursts and is readying for battle ever since a pair of prominent specialists published an article this month that Kim has made a strategic decision to go to war.
In an article published on the 38 North website this month, Robert Carlin and Siegfried Hecker said the North Korean leader has abandoned the state’s long-sought goal of normalizing relations with the US.
“Pyongyang could be planning to move in ways that completely defy our calculations,” they said, adding this points toward the prospect of a military solution to end the divide on the peninsula using his nuclear arsenal.
Kim pledged in a policy-setting address for 2024 that North Korea was ready to fight a war but had no intention of starting one. He also ratcheted up tensions by firing off artillery near the South Korean border island of Yeonpyeong — the scene of deadly confrontations in 2010.
But the specter of an overwhelming response from the US and South Korea that could wipe out his state and his leadership has served as a deterrent for years against a more aggressive move.
“He is not yet ready or desperate enough to opt for a collective suicide,” said Chun, who once helped broker a disarmament deal with Pyongyang.
For now, the cooperation between North Korea and Russia is only expected to deepen, with Putin possibly visiting North Korea in the coming months. In addition, South Korean Defense Minister Shin Wonsik said he believes North Korea is preparing to send Moscow new types of tactical guided missiles that could help the Kremlin continue its grinding bombardments.
White House National Security Council spokesman John Kirby told reporters in Washington this week the US is watching the situation in North Korea “very closely.” Sabrina Singh, a Pentagon spokeswoman, said Thursday that support from North Korea helps Russia prolong its war on Ukraine.
North Korea also has a history of ratcheting up tensions ahead of elections. One vote he’s certainly watching is South Korea’s parliamentary election in April, which will determine if the progressive Democratic Party that backs rapprochement with Pyongyang will keep control or lose out to the conservative People Power Party of current President Yoon Suk Yeol.
The other major election this year for Kim is in the US, which increasingly looks like a rematch between Donald Trump and Joe Biden. Kim and Trump met three times and struck up a bonhomie that was punctuated with exchanges of letters — and all the while, Kim’s arsenal of fissile material and missiles only grew larger.
Soo Kim, a former Korea analyst at the Central Intelligence Agency who now works at US-based management consulting firm LMI, said the North Korean leader would likely need to weigh the consequences of more aggressive military actions on both the South Korean election and the US one in November.
“Does it make sense for Kim to act now for the Seoul elections?” she said. “Or is it more effective to wait it out until a bigger, more consequential election.”
(Updates with comments from US Defense Department in paragraph 20.)
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