Largely cut off from the rest of the world, North Korea's trade with foreign territories has officially been severed as a result of global sanctions. But new analysis has revealed that sanctions haven't been effective in halting the reclusive country's missile programme. Leader Kim Jong-un and his fellow elite also still manage to enjoy lives of luxury while funding the state's "irreversible" nuclear mission. So where is all the money coming from?

From new deals with Russia to exporting seafood, read on as we look at the likely ways cash is flowing into the so-called Hermit Kingdom. All dollar values in US dollars.

The best way to measure a country's economic success is via its gross domestic product (GDP), and while North Korea doesn't make its economic information public, data released by Trading Economics and the World Bank put the country's GDP at $18 billion (£14.1bn) by the end of 2020, and shows that it's been growing year on year.

This is only a fraction of neighbouring South Korea's GDP, which the World Bank reported as $1.8 trillion (£1.57tn) in 2021. But the fact that North Korea has seen growth suggests that the international sanctions imposed to try and damage its ballistic missile and nuclear weapons programme have had minimal impact...

According to analysis in Reuters, economic sanctions imposed by countries such as the United States have "abjectly failed to halt its nuclear and missile programs or to bring the reclusive northeast Asian state back to the negotiating table". North Korea's nuclear programme has gone from strength to strength, with the nation firing more than 60 missiles this year so far. A record 23 of these launches were carried out on a single day (2 November).

One day later, the state then fired a suspected intercontinental ballistic missile. Although officials from South Korea believe the missile may have failed in flight, it's still a clear sign that their northern neighbour has the budget to continue investing in new weaponry. Meanwhile, a senior member of the Biden administration has said: "I would disagree with the idea that sanctions have failed. Sanctions have failed to stop their programs – that's absolutely true. But I think if the sanctions didn't exist, it would be much further along, and much more of a threat to its neighbors, to the region, and to the world". 

While North Korea's GDP is apparently growing, the value of its exports and imports have fallen, according to the latest data from the Bank of Korea. Excluding any goods transported between North and South Korea, North Korea's exports amounted to $0.08 billion (£0.07bn) in 2021. That's a significant decrease from 2016, when its exports reportedly rose by 4.6% to $2.82 billion (£2.11 billion).

However, it now seems that arms deals are its latest lucrative trade. According to an official from the US military, North Korea has started supplying Russia with weapons for its ongoing war with Ukraine. President Putin is reportedly in the process of buying millions of rockets and shells from the rogue state, as Western sanctions have prevented him from buying them elsewhere.

The Pyongyang media has quoted Putin as saying the two countries will work towards "comprehensive and constructive bilateral relations", banding together as the rest of the world increasingly cracks down on them. The Associated Press, however, reports that North Korea has now accused the US of lying about its ties to Russia, denying that it's sent shells and ammunition to Putin. This is despite the fact that Russian spokespeople have confirmed the reopening of their North Korean border, with Russia apparently supplying Kim Jong-un with 30 thoroughbred horses that arrived by train last week. It's expected that Russia's next shipment will include medicine.

The country might be breaking into the arms trade, but coal is North Korea's main export, bringing in more than $370 million (£305m) a year in illegal shipments, it's been estimated. In February 2017 China announced that it would be ending all coal imports from North Korea for the year in a bid to comply with UN sanctions. However, North Korea's coal industry has been thriving, and it was reported in a confidential United Nations report that coal has been delivered to China via ship-to-ship transfers. 

According to Kim Kuk-song, a North Korean defector interviewed by the BBC in 2021, he was responsible for selling rare metals and coal to raise extra funds for the country. He would sell the commodities for millions in cash and carry the money back to North Korea in a suitcase. 

North Korea has become known for its pine mushrooms after Kim Jong-un gifted two tonnes of the fungus to the South Korean government in 2018, but there are also other foodstuffs that the country exports to boost its income. Molluscs, for example, brought in a respectable $137 million (£107m) in 2017, and North Korea was responsible for 1.3% of the world’s mollusc exports.

Processed fish was also a fairly big seller for the country, with North Korea exporting $2.69 million (£2.11m) worth a year to China, according to MIT's Observatory of Economic Complexity (OEC).

Clothing made up a total of $584 million (£481m) of North Korea’s exports in 2017, according to the OEC, including non-knit coats, suits and activewear. In recent years there's been a lot of controversy when it comes to clothing made in the socialist state because a lot of it is said to have been labelled with "Made in China" tags before being exported.

Despite using "Made in China" tags on its textiles exports, North Korea is thought to do most of its trade – around 80% in fact – ​with neighbouring China. According to the OEC, it exported $44.1 million (£38.4m) worth of goods to China in 2020, though this figure is significantly lower than it's been in previous years. As well as growing political tensions, it's likely that the coronavirus pandemic and subsequent trade disruption have affected the numbers. Looking further back, a report from 2015 claimed the other main export countries for North Korea were: India, which took 3.5% of its exports; Pakistan, which took 1.5%; Burkina Faso, which took 1.2%, and Saudi Arabia, which took 0.89%. 

After declaring victory over coronavirus on 10 August, North Korea reportedly has eased some of its border restrictions. According to an article in Daily NK, many locals believe this had economic motivations, as Kim Jong-un wanted to "quickly reinvigorate trade with China". Back in September, the nation restarted its freight train service with China after a five-month hiatus, according to the Associated Press. 

North Korea isn't just sending its products abroad but has gone one step further and opened restaurants in other countries. Keen to monetise its popular cuisine and style of entertainment, the North Korean government has opened over 100 cafes – all called Pyongyang after the country's capital – across China, as well as in Thailand, Vietnam, and even the Netherlands. 

The chain is known for being mysterious, and there are restrictions on photography of the performances that the waitresses put on between serving customers. The establishments are staffed by North Koreans and all profits feed straight back into the government. However, the coronavirus pandemic and its impact on global trade and the restaurant industry meant that the nation allegedly turned towards other more illegal money-making efforts...

It's unsurprising that Transparency International, the global coalition against corruption, ranks North Korea as the joint-fifth most corrupt country in the world in its 2021 Corruption Perceptions Index, only behind some of the world's most war-torn countries such as Syria, South Sudan and Somalia.

With permission being required for nearly every human move in North Korea, bribery is said to be commonplace between officials and citizens, and the money most likely lines a government pocket or two.

Most of that corruption is said to be government-led. According to North Korea Leadership Watch, a site that monitors the country's leadership, there are three bureaus in North Korea known as Office 35, Office 38, and Office 39, which are collectively known as the Third Floor. These offices run intelligence operations, legally and illegally source foreign currency for the party and core elites, and manage some of the party’s and Kim Jong-un's family’s money.

Among the alleged illegal activity of the Third Floor is the production and selling of drugs. It's long been believed that North Korea has both manufactured and trafficked narcotics for cash, and it may continue to do so as sanctions are ramped up, restricting the trading of legitimate goods.

It's unlikely that the state will clean up its act anytime soon given that lenient border controls and a high demand for drugs make it an easy and lucrative means of making money. Former North Korean spy Kim Kuk-song's claims corroborate this. He told the BBC that he built an illegal drugs lab in the Workers' Party office to raise "revolutionary" funds, primarily through the production and selling of crystal meth. 

Not all illegal activity in North Korea is drugs-related though. Some North Koreans have also become quite the experts at banknote forgery. A lot of knowledge and expensive machinery goes into replicating notes to such an exacting standard, and the fact that multiple experts have been needed to spot that the reproductions aren't real notes suggests that government resources were most likely responsible.

The $100 bills have been branded as "supernotes", thanks to their likeness to genuine paper money, and North Korea has gained a reputation for trading in the counterfeit cash for real money for the regime.

Discover the world's most and least counterfeited currencies

North Korea hasn't limited itself to hard cash, and cryptocurrency offers another major income stream for the state. According to the 2022 Crypto Crime Report from Chainalysis, the regime stole nearly $400 million (£292.8m) in cryptocurrency last year, which is thought to have funded the country's weapons programme. In the first five months of this year alone, this figure has risen to $840 million (£733m), according to Chainalysis. That's more than $200 million (£175m) more than the nation stole in 2020 and 2021 combined.

Back in March, North Korean hackers also allegedly stole cryptocurrency worth more than $600 million (£480m) from users of the video game Axie Infinity. US officials later announced they had seized back $30 million (£25.8m) of the funds – the first-ever recovery of cryptocurrency stolen by North Korean hackers. 

It's also thought that the government has been legally buying up assets such as Bitcoin, which isn't controlled by governments or banks and is hard to trace. This makes it a perfect investment and source of income for the secluded state.

One of the most recent North Korean Bitcoin scandals came to light in August 2021. The cyberattacks involved sending seemingly innocent messages via professional networking site LinkedIn. Finnish cyber security firm F-Secure unveiled the hack, where North Korean hackers known as the Lazarus Group had created fake job profiles targeted at employees working for aerospace and military companies they were looking to infiltrate in more than 12 countries, including the US, UK, China, Russia, and South Korea.

Personal information and private data were then easily accessible to the criminals, which in turn was used to steal Bitcoin and other cryptocurrencies. Despite having been found out, security companies warn that this wasn't the first – and won't be the last – malicious cyberattack to come out of North Korea, especially as coronavirus has impacted other revenue streams. It's now thought that North Korean hackers are trying to get remote interviews for jobs in the US in an attempt to siphon money into the country. 

And it's not just cryptocurrencies that are being hacked. According to Kim Kuk-song, former leader Kim Jong-il began training cybercriminals in the 1980s "to prepare for cyberwarfare". Although most North Koreans are denied internet access and even mobile phones, previous defectors have claimed that there are around 6,000 professional hackers in Pyongyang – and it's believed they were behind the WannaCry ransomware attack that targeted organisations including the UK's National Health Service (NHS) in 2017.

Kim Kuk-song claimed that the hackers work in the 414 Liaison Office, known within the government as "Kim Jong-il's Information Centre". A confidential UN report in 2019 revealed these hackers had stolen $2 billion (£1.6bn) to fund the country's nuclear weapons programme. The Biden administration has since estimated that North Korea spends around a third of its illegal cryptocurrency on nuclear weaponry. 

While many people survive on the bare necessities, supreme leader Kim Jong-un is renowned for living a life of luxury. The same goes for his elite inner circle, who are some of the few "comrades", as the communist country's citizens are known, who can afford to shop at the two well-stocked luxury department stores in North Korea's capital Pyongyang.

The cash-only stores serving the ruling upper class reportedly sell designer items such as Montblanc watches worth over $4,000 (£3.2k). These stores are also thought to provide a revenue stream for the regime. 

Now read about the shocking difference between Kim Jong-un and his people

And it isn't just in their home country that North Korean workers are being underpaid and mistreated to benefit the rich elite. There have been rumours of North Korea profiting from slave labour for years and, in 2015, a United Nations press conference held by rapporteur Marzuki Darusman spelled out just how bad the situation was.

Between 50,000 and 100,000 North Korean citizens have been sent abroad – predominantly to China and Russia, but also to countries across Asia, Europe, and Africa – to work in various labour industries, including mining, construction, and textiles. Working conditions are harsh and salaries are virtually non-existent, with constant surveillance ensuring that labourers are worked to the bone. Money is exchanged for the excruciating work, but it goes straight to the North Korean government. As Kim Kuk-song said: "All the money in North Korea belongs to the leader". 

Given its secretive and scandalous reputation, it's unsurprising that people are keen to sneak a peek into North Korean life. Those wanting a close-up look at the day-to-day lives of North Korean citizens will be disappointed, however, as the few tourists who are allowed into the country are closely watched at all times and are only permitted to visit places that have the government seal of approval.

It's uncertain exactly how much money North Korea was making from foreign visitors pre-COVID, but it's estimated that it could have been bringing in as much as $175 million (£139m) a year.

Now read about the legal and illegal jobs North Koreans do to survive