What made Pyongyang close down diplomatic missions? North Korea’s Economic Diplomacy and Ambition of ‘Normal State’

At the end of 2023, Pyongyang announced the closure of dozens of diplomatic missions abroad. As of early December, North Korea had withdrawn from Guinea, Nepal, Bangladesh, Senegal, Spain, Uganda, and Angola and was currently in the process of withdrawing from the Democratic Republic of Congo and shutting down its consulate in Hong Kong.1 The withdrawal from African states symbolizes the abandonment of a legacy of financial support to these countries during the Cold War. Additionally, it’s been reported that the Hong Kong consulate served as an essential hub for various legal and illegal activities such as smuggling, money laundering, and the procurement of goods. According to Radio Free Asia, until a month before the decision to close the consulate, it had been a significant source of income for funding the construction of new submarines.2 These withdrawal decisions symbolize two circumstances North Korea is currently facing. First, the mission’s priority was to supply stable dollars to Pyongyang, but now there are more expenses than income. Second, internally, there’s a focus on securing the succession process in case of Kim Jong-Un’s sudden death. At the same time, externally, there’s an effort to navigate international situations and concentrate diplomatic efforts on their most important partners, China and Russia. However, most significantly, this marks the end of North Korea’s traditional economic diplomacy.

Economic diplomacy has played a critical role for North Korea over the last few decades. The competition with South Korea to expand diplomatic relations intensified as both North and South sought to grow as self-sufficient countries in the 1970s and 80s. In the process of establishing diplomatic ties, money became a vital factor for countries to determine which Korea they wanted to befriend. Before formal establishment, both Koreas provided support and benefits to win over other nations. Once diplomatic relations were established, they were primarily connected in terms of trade and culture. During the Cold War, the world was divided into two parts: Red vs. Blue. Therefore, countries that had already chosen their side were not a concern for the two Koreas. However, in Africa, newly independent states obtaining sovereignty from Western colonization became their target. However, as recent events have shown, North Korea was ultimately defeated in this competition. Today, North Korea is facing a transitional period as it decides on a new strategy for economic diplomacy and its broader diplomatic agenda. Therefore, it is crucial to understand how North Korea, under Kim Jong-un and potentially his daughter and successor, Kim Ju-ae, will adapt and perform amid a chaotic and rapidly changing global order.

Economic Diplomacy and the Koreas

Before discussing the current situation, it is important to note the relations between the Koreas and African states. Africa held significant diplomatic importance for both South and North Korea. The existing diplomatic relations were already established and divided along the lines of power between the United States and the Soviet Union. Newly independent states were crucial for both Koreas, as each country had equal voting rights in the United Nations, influencing the potential admission of the Koreas as UN members. Until 1991, when both Koreas agreed to join simultaneously, each side vetoed the other’s UN membership.3 This made a single vote from Africa valuable, as it could help amplify either Korea’s diplomatic influence. 

Unfortunately for the South, most newly independent states turned socialist or communist due to anti-Western sentiments. Gabon and the Kingdom of Ethiopia - before a military coup - were the few countries supporting the South.4 In exchange for recognizing and establishing diplomatic relations, North Korea provided extensive military and infrastructure aid, including constructing massive statues. For example, in 1975, North Korea sent 150 military trainers to Zaire, along with $16 million worth of ammunition for training the presidential guard. Furthermore, Kim promised Togo a $20 million economic pack in support in exchange for cutting diplomatic ties with the South.5 With support from China and the Soviet Union, North Korea expanded its relations in Africa.6 However, when China shifted its diplomatic and economic strategy, and the USSR collapsed, North Korea was burdened with supporting these relationships independently. Consequently, free aid to Africa transitioned into a business model for North Korea. Pyongyang sought to capitalize on the trust it had built over the years in Africa to increase its sources of revenue.7 By then, North Korea’s strategy on economic diplomacy started to deteriorate. 

Challenges to North Korean Economic Diplomacy

One of the hardships of maintaining missions abroad is the lack of funding for staff. After the pandemic, North Korea isolated itself, even from its missions. For instance, they prohibited existing staff at the Embassy in Moscow from entering Pyongyang due to the spread of Covid-19.8 Moreover, the closure of borders with Russia and China led to a reduction in the influx of money flow. According to Yang, North Korea will not be able to return to the pre-Covid-19 level.9 This impacted the supply of funds to maintain missions abroad. The staff had to become self-sufficient until the borders were reopened.

Another critical economic point related to the end of economic diplomacy was the harsh sanctions imposed by the US and the UN. The United Nations sanctions were approved by the Security Council in condemnation of North Korea’s fourth and fifth nuclear tests. Unlike previous primary sanctions imposed by the US, a single state, the UN sanctions affected all members of the UN. Thus, African states had no choice but to participate in the sanctions.10 Starting in 2016, African states banned all of North Korea’s economic activities in their countries and expelled existing laborers. In 2017, Angola terminated its contract with North Korean construction company Mansudae, while Uganda expelled North Korean military trainers to comply with the UN sanctions.1112 

On the other side, the reason why African countries actively followed the sanctions on their former friend was because North Korea became a hindrance for their relations with other states. In other words, South Korea emerged as one of the important partners providing ODA and aid to those countries. The notorious perception of North Korea and Kim Jong-un also played a role in these decisions. Ideological stances no longer bind former socialist or communist states because the world order is extremely practical, changing very rapidly. For instance, once one of North Korea’s closest allies, Cuba recently established diplomatic relations with the South for practical reasons such as international cooperation, economic collaboration, and trade relationships.13 

Moreover, the sanctions severed traditional business abroad for Pyongyang. In 2023, the Office of Foreign Assets Control of the US designated two North Korean business people and three companies or institutions for violating UN sanctions. The UN sanctions of 2016 restricted North Korea’s exportation of statues, yet those companies were involved in illegal business in the Democratic Republic of Congo.14 This also means that the US government and the UN noticed Pyongyang’s actions in Africa, and bringing dollars to the Kim family became exponentially challenging. Like this, the traditional business model has been failing due to broad and intense sanctions directly targeting them.

Another reason for the withdrawal was the censorship of diplomats and the stabilization of domestic politics for succession. Due to economic hardship and diplomats’ exposure to the outside world, Pyongyang found it increasingly difficult to manage them. Starting from Thae Yong-ho, large numbers of diplomats and their families escaped from Pyongyang’s intense surveillance. According to the South Korean government, at least ten North Korean elites in third states (neither North or South) requested asylum.15 With the failure of economic diplomacy, North Korea sought to strengthen Juche civil education by bringing back diplomats under direct supervision. Along with that, stationing them in Pyongyang would prevent any disorder in the process of handing over the throne to Kim Ju-ae.

Shifting North Korean Focus

Therefore, North Korea seeks a new business model by utilizing its IT capabilities. According to Chainalysis, North Korea hacked $1.65 billion in cryptocurrency in 2023, a 284% increase from the previous year.16 With the dramatic rise in the value of cryptocurrency and the increasing complexity of infiltrating financial systems, North Korea has shifted its focus and source of income to the new market represented by the internet.17 For this reason, North Korea has sought to establish diplomatic relations with financially vulnerable, anti-American states, allowing them to evade Washington’s surveillance more freely. Professor Nam of Korea University argues that the recent ties with Nicaragua are based on practical reasons, facilitating more accessible access to hacking cryptocurrency.1819 Unlike traditional smuggling and business models, the new method of collecting dollars is much more accessible and straightforward, requires less effort to avoid detection, and can result in substantial influxes of funds in a single successful action.

Diplomatically, North Korea is focusing all its capabilities on connecting with Russia and China. Firstly, regarding Russia, due to the ongoing conflict in Ukraine and the resulting sanctions and isolation from the outside world, Kim Jong-un sees an opportunity for economic cooperation with Moscow. Last year, Kim traveled to Moscow to meet with Putin and discuss the expansion of ties while Russia was in conflict with the United States.20 This not only allows for free trade with Russia and enhances diplomatic relations but also creates a diplomatic bloc that Kim has dreamed of for decades.21 Establishing diplomatic ties with Russia offers a new avenue away from stalled peace talks with Washington as well as Seoul, who were being wayward in Pyongyang’s strategy. Similarly, Pyongyang is also attempting to strengthen its connection with Beijing. By leveraging current international dynamics, particularly the Indo-Pacific security issues between the US and China, North Korea aims to bring China into its envisioned diplomatic bloc. This bloc could help North Korea be considered a “normal state.”22 It may also continue to maintain solid tensions with the Americans to advance Kim’s best interests.

The withdrawal of missions could symbolize the end of North Korea’s version of economic diplomacy. While it’s true that North Korea has faced financial hardships in recent years, this could also mark the beginning of a new dimension of diplomacy for Pyongyang. Strengthened ties with Russia and China could provide stable protection while pursuing national interests in the current geopolitical climate. Increased trade volumes and a closer diplomatic bloc with anti-American countries could allow North Korea to access new business models to circumvent UN sanctions easily. In March 2024, Russia vetoed the extension of monitoring North Korean sanctions in the United Nations.23 With strong ties to permanent members of the Security Council, North Korea could again engage in new forms of economic diplomacy. In other words, economic diplomacy is not ending but rather evolving into a new form. This could lead to North Korea being recognized as a “normal state,” capable of standing alone without further cooperation or negotiations with South Korea and the US as well as efficiently processing the succession.

By NKR Intern Alfred Han

**** The views expressed in this blog post do not necessarily reflect those of North Korean Review or the Yonsei Institute for North Korean Studies.

Endnotes

1.  Um, J. (2023, December 5). Ministry of Foreign Affairs: “North Korea, Closure of Embassies in Guinea and Senegal” ... Withdrawal Completed from 7 Countries “외교부 ‘북한, 기니·세네갈 대사관도 폐쇄’‥7개국 철수 완료.” MBC News. https://imnews.imbc.com/news/2023/politics/article/6550229_36119.html 

2.  Park, J. (2023, October 27). North Korea withdraw Embassies...”Following Uganda, Consulate in Hong Kong to Close” “북, 재외공관 철수 행렬...”우간다 이어 홍콩 영사관 폐쇄”“. Radio Free Asia. https://www.rfa.org/korean/in_focus/nk_nuclear_talks/nkembassy-10272023152134.html 

3.  Lee, J. (2022, April 15). “The Diplomatic Battle Between North and South Korea for UN Membership in 1991” “91년 남·북한 유엔 가입 외교전...”동시 가입 이후 북한은 패자의식"". KBS News. https://news.kbs.co.kr/news/pc/view/view.do?ncd=5441432 

4.  Park, S.-S. (1978). Africa and two Koreas: A Study of African Non-Alignment. African Studies Review, 21(1), 73–88. https://doi.org/10.2307/523764 

5.  Ko, H. (1977, February 25). “The Diplomatic Battle Between North and South Korea in Africa” “「아프리카」의 남북 외교전.” The JoongAng. https://www.joongang.co.kr/article/1457070#home 

6.  Young, B. R. (2021). North Korea in Africa: Historical Solidarity, China’s Role, and Sanctions Evasion. SPECIAL REPORT: UNITED STATES INSTITUTE OF PEACE, 1–20.

7.  Hong, A. (2021, August 25). North Korea in Africa: Focused on Earning Foreign Currency Rather than Spreading Ideology “북, 아프리카서 사상전파 대신 외화벌이 급급.” North Korea Information Portal: Ministry of Unification. https://nkinfo.unikorea.go.kr/nkp/news/view.do;jsessionid=wHk7nvnPviK0sUlqPHarQaKQuvlar6ji4uZT0CmM.ins12?menuId=MAIN_NEWS&cntntsMngNo=5397941 

8.  Yoo, C. (2022, May 17). Strict Quarantine Measures for Foreign Missions in North Korea due to COVID-19 “러 대사관 ‘코로나19로 주북 외국 공관들도 엄격한 격리 상태.’” Yonhapnews. https://www.yna.co.kr/view/AKR20220517153300080 

9.  Lee, S., Kim, B., Yang, M., & Jang, H. (2023). The Changes and Prospects of the North Korean Economy Before and After the Pandemic “팬데믹을 전후한 북한경제의 변화와 전망.” KDI North Korea Economic Review, 3–17. 

10.  Mok, Y., & Ko, Y. (2023, November 3). Why is North Korea withdrawing its overseas embassies? “[시사진단 한반도] 북한이 해외공관 철수하는 이유는?” Radio Free Asia. https://www.rfa.org/korean/weekly_program/news_analysis/sisakorea-11032023094855.html  

11.  Yang, M. (2023, October 30). North Korea, Following Uganda, Closes Embassy in Angola... Withdrawal of Overseas Embassies “북한, 우간다 이어 앙골라 공관도 폐쇄...해외 공관 연쇄 철수.” KBS News. https://news.kbs.co.kr/news/pc/view/view.do?ncd=7805022  

12.  Park, J. (2023a, October 24). North Korea Withdraws Embassy in Uganda... Desperate Measures as Foreign Currency Earnings are Blocked “북, 우간다서 대사관 철수...외화벌이 막히자 극약처방.” Radio Free Asia. https://www.rfa.org/korean/in_focus/food_international_org/uganda-10242023141513.html  

13.  Han, S. (2024, February 15). South Korea, Sudden Diplomatic Relations with “Brother Country” Cuba... How Will North Korea React? ‘한국, 북한 “형제국” 쿠바와 전격 수교...북한 어떤 반응 보일까.’ BBC News Korea. https://www.bbc.com/korean/articles/cv295jgddw1o  

14.  Seo, Y. (2023, March 2). “Selling Statues in Africa to Earn Foreign Currency” - US Imposes Sanctions on Three North Korean Entities and Two Individuals""아프리카에 조각상 팔아 외화벌이" 美, 북한 기관 3곳·개인 2명 제재". The JoongAng. https://www.joongang.co.kr/article/25144206#home  

15.  Ko, E. (2024, February 14). “Elite Class in North Korea Escaping” - Defected North Korean Diplomat Suggests ‘Likely More Defections to Come’ “북한 엘리트층 탈출 ‘러시’...탈북 외교관 ‘추가 이탈 있을 듯.’” YouTube. https://www.youtube.com/watch?v=le1gOqk5LQU&ab_channel=KBSNews  

16.  Ko, D. (2023, May 22). Last Year, North Korea Stole Crypto Currency Worth 2 Trillion Won... South Korea and the US to Track and Recover Funds “지난해 北이 훔친 코인 2조원... 자금 추적·환수 나선 韓美[인사이드&인사이트].” Donga Ilbo. https://www.donga.com/news/Opinion/article/all/20230523/119426615/1  

17.  Chung, Y. (2024, March 4). The Crypto Currency Craze and North Korea’s Cash Out Problem “[북한 물가] 코인 열풍과 북한의 현금화 난제.” Radio Free Asia. https://www.rfa.org/korean/weekly_program/c27dac8c-d480c5b4bcf4b294-bd81d55c-bb3cac00/priceindex-03012024133057.html  

18.  Nam, S. (2024, March 26). Dismantled North Korean Diplomatic Missions... They Are Seeking Bypass “[남성욱의 한반도 워치] 반 토막 난 전세계 北 외교 공관... 그들은 우회로를 찾고 있다.” Chosun Ilbo. https://www.chosun.com/opinion/specialist_column/2023/12/11/NHC57IBYLJFFFIW4B24OCJ5BKM/  

19.  Kim, J. (2024, January 30). North Korea Withdraws Embassies in Hong Kong and Libya... Reduces Overseas Missions to 44 “북, 홍콩·리비아 공관도 철수...재외공관 44개로 축소.” Yonhapnews. https://www.yna.co.kr/view/AKR20240130144100504  

20.  Chung, I. (2023, September 16). Kim Jong-un and Putin Challenging International Political Norms “김정은·푸틴, 국제정치 문법에 '도전’하다.” Hankyoreh 21. https://h21.hani.co.kr/arti/world/world_general/54418.html  

21.  Cho, J. (2024, April 25). North Korea Shows Increased Enthusiasm for Cooperation on the 5th Anniversary of Kim Jong-un-Putin’s First Summit “김정은-푸틴 첫 정상회담 5주년에 북 ‘협조 열의 더욱 가열.’” MBC News. https://imnews.imbc.com/news/2024/politics/article/6592565_36431.html  

22.  Koo, Y. (2023, November 1). The Reasons Behind North Korea’s Successive Withdrawals of Overseas Embassies “북한, 재외공관 잇따라 철수하는 이유는?” BBC News Korea. https://www.bbc.com/korean/articles/cyx1xvz0yrzo  

23.  Park, M. (2024, March 29). The UN Security Council North Korea Sanctions Monitoring Body is Disappearing... Russia Exercises Veto Power “안보리 ‘대북제재 감시기구’ 사라진다…러시아가 거부권 행사.” Hankyoreh. https://www.hani.co.kr/arti/politics/diplomacy/1134338.html