An Economic Boom Thanks to Wigs—What’s Suddenly Going On in North Korea?

Here's what it's all about

• According to experts, North Korea's economy is growing at a surprisingly strong rate—modern high-rises, more cars, and digital payment systems are particularly visible in the capital, Pyongyang.
• The economic upswing is likely due primarily to trade with China and Russia.
• Despite the economic boom, many people in North Korea continue to live in poverty. Experts doubt that the population is benefiting from the growth to the same extent as Kim Jong-un’s regime.

Summary created with

It is difficult to assess North Korea’s economy, as the country does not publish transparent, official economic statistics. In 2020, the Vienna University of Economics and Business analyzed satellite data and estimated that 60 percent of North Korea’s population—about 15 million people—lives in “absolute poverty.” The study estimates the average per capita income at about $790 per year—which would be one of the lowest in the world.

This makes the headline in the renowned business newspaper “The Wall Street Journal” all the more astonishing: “The world’s most surprising economic success story is … North Korea.”

The newspaper draws on observations made by foreign visitors. They describe ride-hailing apps, QR code payments at restaurants, and new high-rise complexes in the capital, Pyongyang.

Sudden Traffic Jams and Parking Problems

Gmx.ch also spoke with experts. “The country is developing much faster than we would have expected just a few years ago,” North Korea expert Rachel Minyoung Lee of the U.S. think tank Stimson Center told the online publication. According to the South Korean central bank, North Korea’s real gross domestic product rose by 3.7 percent in 2024. By comparison, Switzerland’s GDP rose by 1.4 percent in the same year—though, of course, the Swiss economy operates on an entirely different level.

This boom is particularly evident in North Korea’s capital. “Entirely new streets and building complexes are being built,” Zoe Stephens tells Gmx. Stephens works for Koryo Tours, a travel agency specializing in North Korea, and visited the country last year for the first time since the start of the COVID-19 pandemic.

Video zeigt Putzaktion

Kim Jong-un im Wahn – warum selbst seine Fäkalien bewacht werden

“I’ve seen streets that look incredibly modern,” says Stephens. Pyongyang now feels like a “normal capital city,” she says. She confirms the “Wall Street Journal” report, noting that you can now even pay with smartphones in many stores.

And there are far more cars on the new roads than ever before, as the Reuters news agency reports. The agency analyzed satellite images and found that while the roads were largely empty just a few years ago, there are now even traffic jams and problems finding parking spots.

Ski Resort for "Friendly Foreign Guests"

Investments are also being made outside the capital. According to media reports, a new ski resort is being built in the north of the country, as satellite images are said to show. The specialized news site NK News speculates that this is more a matter of domestic propaganda than a project designed to attract tourists. Nevertheless, North Korea’s supreme leader, Kim Jong-un, is reported to have said of the ski resort that it “will surely become a tourist zone where friendly foreign guests can experience a unique charm.”

Yet just a few years ago, the situation looked quite different. The COVID-19 pandemic is said to have further worsened the humanitarian situation in North Korea. “The pandemic and crop failures have severely worsened the food supply in North Korea over the past two years,” wrote, for example, Welthungerhilfe in 2023.

At the time, the South Korean development agency assumed that a massive famine had broken out and that people in North Korea were starving. Satellite images from that time showed that in 2022, grain production was approximately 180,000 metric tons lower than in the previous year. Drought, flooding, and isolation are said to have further exacerbated the already chronic food shortage.

Up to $14 billion from the arms trade

So what is driving this economic upswing now, just a few years later? In an interview with Gmx, North Korea expert Rachel Minyoung Lee suggests that it is primarily due to trade with China. She notes that China accounts for about 90 percent of North Korea’s foreign trade.

"North Korea imports a large portion of its consumer goods from the People's Republic, such as cars and electronic components. Goods exported in the opposite direction include, for example, iron and steel, frozen fish, and, above all, wigs—one of the Kim dictatorship's top export hits."

Neues Buch

Als Kim Jong-un in der Schweiz lebte – «sie dachten, er wäre Thai»

The second key partner is Russia. North Korea is supporting Russia in the war against Ukraine with weapons, soldiers, and ammunition. The South Korean Institute for National Security Strategy estimates in a report that North Korea has earned between 7.7 billion and 14.4 billion U.S. dollars from these deals.

"China is undoubtedly a more valuable economic partner than Russia," says expert Lee. "However, all the evidence suggests that Russia has made a significant contribution to the North Korean economy over the past three years."

More Military Development Than Economic Development

Another source of revenue is the tens of thousands of workers whom the North Korean regime sends abroad and who are required to send a large portion of their salaries back home.

However, the expert doubts that the economic upswing will benefit the general population. She says that Kim Jong-un is indeed trying to boost the economy in the rest of North Korea outside of Pyongyang through a special development program. “It remains to be seen, however, to what extent the factories built as part of this initiative will actually benefit the population.”

This is because the “Supreme Leader” likely channels a large portion of the money into his weapons and nuclear programs. “Despite the economic boom, North Korea’s economic development lags behind the progress the country has made in weapons development,” the expert said.