Kim Jong Un's North Korea is the world’s most successful failed state


How Kim Jong Un-run North Korea is the world’s most successful failed state

By most measures, North Korea is a failed state. It ranks near the bottom of the world’s countries in GDP and per capita income. Its health system is one of the world’s worst (Johns Hopkins University’s 2021 survey of global health security ranked North Korea at 193 of 195 countries — tied with Yemen; only Somalia fared worse), and it has regularly had trouble feeding its people. Since 2020, the country’s economic woes have been exacerbated by the closing of its borders to stop the spread of covid-19 — a shutdown that has cut off North Korea from China, its only real trade partner. And North Korea is one of only a few countries that has not vaccinated any of its population against covid-19.

Yet North Korea excels in other, more sinister respects: It has created and maintained the most totalitarian regime on the planet and amassed a military arsenal to match all but a few of the world’s great powers. It has one of the world’s largest conventional military forces, with thousands of artillery tubes aimed at the South Korean capital, Seoul, along with a growing stockpile of nuclear weapons and missiles that can deliver them. North Korea is today one of only three states — the others are Russia and China — that has a credible capability to strike the continental United States with nuclear-tipped missiles.

Since the death of second-generation strongman Kim Jong Il in late 2011, the country has been led by his son Kim Jong Un. A decade ago, few analysts gave the younger Kim much chance of success. He was a chubby, little-known 27-year-old NBA fan, a new head of state who had previously evinced little interest in the rest of the world, and his ascension was greeted with predictions of regime collapse. Even many who thought the dysfunctional North Korean regime would survive expected Kim to become a figurehead for older, more experienced generals and political figures who would rule from behind the scenes. Others suggested that Kim, who had been educated abroad, might become a reformer — in the style of Mikhail Gorbachev or Deng Xiaoping — and move North Korea in a more capitalist and liberal direction.

Instead, Kim has become the absolute master of a state that remains every bit as dictatorial and illiberal as it was when he took over — perhaps even more so. He has purged every possible competitor, going so far as to publicly execute his uncle, while ramping up North Korea’s weapons of mass destruction to new heights. More than a decade after his father’s death, Kim’s North Korean state appears more entrenched — and resistant to reform or moderation — than it has ever been.


How did he do it? How did this failed state achieve its “success”? And what does that success mean for South Korea, the United States, Japan and other countries that feel threatened by the man and his country?

Rule by terror

The first answer involves a family tradition. The underpinning of Kim Jong Un’s rule, as it was for his father and grandfather (state founder Kim Il Sung), has been pervasive state surveillance and terror. North Korea has multiple overlapping security and intelligence agencies keeping tabs on the population and overseeing a vast network of informers. Anyone considered even the remotest danger to the absolute ruler is likely to wind up in a prison camp or a grave — along with multiple family members.

This threat of collective punishment helps keep the population in line and prevents the rise of any dissent or opposition. Many North Koreans may be skeptical of the regime; surveys conducted by the Center for Strategic and International Studies reveal that North Koreans complain or make jokes about the regime in private among family and close friends. But they dare not voice those complaints or skepticism for fear they will be turned in to the state security service along with their spouses, parents, siblings or children.

Today, as many as 100,000 North Koreans are imprisoned in concentration camps, and Kim Jong Un has gone to extreme lengths to make clear that no one is immune to state terror; he executed his uncle, Jang Song Taek, reportedly with anti-aircraft guns, and sent assassins to kill his half brother, Kim Jong Nam, with a nerve agent in the Kuala Lumpur airport in Malaysia.

Meanwhile, Kim Jong Un has maintained and upgraded a program of indoctrination that is straight out of George Orwell’s “1984.” North Koreans are taught to venerate the three Kims as virtual deities. There are more than 30,000 statues scattered across the country of Kim’s grandfather; every North Korean adult is still required to wear a badge of Kim Il Sung or Kim Jong Il, to keep a portrait of at least one of the Kims displayed in their homes and to study “Kim Il Sung Thought” in school.


Kim Jong Un’s main innovation has been to order that high schools must teach an 81-hour course devoted to his own life and philosophy. And in the age of smartphones and social media, other sources of information are almost nonexistent. Most North Koreans have no access to the internet or any television or radio, save the channels that broadcast regime propaganda — and some smuggled DVDs and USBs.

Following the money

Kim has tinkered at the edges with North Korea’s Marxist economic model — just enough to create a small informal market economy. He has allowed the opening of more than 400 private marketplaces known as Jangmadang, where merchants can sell everything from food to clothing while paying 10 percent of their take to the state. These markets have become a lifeline of sorts for many North Koreans. But there has been no attempt to implement the kind of market reforms that Deng pioneered in China in the 1980s.

There is virtually no foreign investment in North Korea — and Kim has shown little interest in restarting the limited economic cooperation with South Korea that began during the Sunshine Policy years from 1998 to 2018. The one major North-South venture, the Kaesong Industrial Complex, which was a source of key hard-currency income for Pyongyang, was shuttered in 2016.

How then does Kim pay for all those missiles? How is North Korea so militarily advanced — given its near-last place in those global GDP rankings and the tight noose of international sanctions?

First, there is China — today the only real patron the country has. China is North Korea’s biggest trading partner and primary source of food, arms and fuel. By some estimates, Beijing provides 80 percent of North Korea’s consumer goods, 45 percent of its food and 90 percent of its energy imports. Sino-North Korean trade accounts for nearly 90 percent of North Korea’s global trade; official Chinese investment accounts for almost 95 percent of foreign direct investment in the North. In 2019 — the last pre-pandemic year — North Korean exports to China were valued at $207 million while imports from China amounted to $2.59 billion.

In Kim’s early years at the helm, North Korea also relied on remittances from forced laborers sent to China and Russia, workers who sent desperately needed cash — several billion dollars a year — home to their families. Some 50,000 workers from the North worked abroad in mining, logging, textile and construction industries, until the U.S. targeted these remittances as part of its 2017 sanctions.

But Kim has found multiple ways around international sanctions. In this respect, he has been an innovator, more adept perhaps than his father or grandfather.

He has built on long-running illicit moneymaking activities — cigarette smuggling (estimated to net more than $100 million a year), counterfeiting currency (an estimated $15 million to $25 million annually), producing and exporting crystal methamphetamine (estimated $100 million to $200 million a year), and selling ballistic missiles to countries including Syria and Iran (estimated to net the North $1.5 billion a year).

In the past decade, Kim has added a highly lucrative high-tech component to this revenue mix: educating and cultivating computer hackers. The country has built a kind of cottage industry in the hacking of international financial institutions and networks. In early 2016, North Korea obtained the Bangladesh central bank’s credentials for the SWIFT interbank messaging system and nearly succeeded in transferring $81 million to North Korean-controlled accounts. That plot was foiled, but many others have succeeded.

The New Yorker reported on a 2017 North Korean ransomware scheme known as WannaCry 2.0, which crippled networks in the U.S., Europe and Asia, including the computer systems of Boeing, Britain’s National Health Service and German’s federal railway. The hackers ultimately demanded payment in bitcoin to unfreeze computer systems they had encrypted, and many of the victims paid up. In 2019, a U.N. panel of experts report estimated that North Korea had raised $2 billion through cybercrime.


Kim has made other forays into cryptocurrency: According to the 2022 Crypto Crime Report from Chainalysis, the regime obtained nearly $400 million in stolen cryptocurrency last year alone. North Korea has also legally bought crypto assets such as bitcoin, which is not controlled by governments or banks, hard to trace, and thus a sanctions-proof investment.

The provocation game

For all these high-tech touches, Kim’s relations with the outside world have been governed by the same playbook pioneered by his father and grandfather. This means mixing provocations with diplomatic outreach to keep South Korea, Japan and the United States — the regime’s principal enemies — off-balance. It can mean firing off missiles as ways to coerce concessions from the rest of the world.

Those provocations have been dramatic. Kim has conducted four nuclear tests and more than 130 missile tests to show off his increasingly powerful arsenal. In the past year alone, North Korea has tested a new submarine-launched ballistic missile, a train-mounted ballistic missile, a new surface-to-air defense missile system, a long-range cruise missile and three hypersonic missiles. This is all part of the North’s broader effort to diversify its missile arsenal, to evade American missile defenses and — perhaps as important — to get the world’s attention.

The Trump summits

The pace of North Korean military expansion has not been slowed by the three widely publicized summits that President Donald Trump held with Kim in 2018 and 2019. Trump believed he had brought Kim to the negotiating table with his threats to rain “fire and fury” upon North Korea, but from Kim’s vantage point, it was his acceleration of the North’s nuclear and missile programs that forced the issue. In other words, the provocations worked. While Trump saw the negotiations as a way to “denuclearize” North Korea, Kim saw them as a chance to legitimize North Korea’s standing as a nuclear power.

Kim came much closer than Trump to achieving his objectives. As the first North Korean leader to hold a summit with a U.S. president, Kim reaped the considerable rewards at home of having his regime legitimized by the meetings. (Trump went so far as to say that he and Kim had fallen in “love”). But Kim refused to make any concessions toward the vague goal of “denuclearization.” Negotiations, never that advanced to begin with, broke down in Hanoi, Vietnam, in 2019, when Kim made clear that he would be willing to shut down only part of his nuclear program in return for a near-total lifting of international sanctions — conditions that were clearly unacceptable to the United States.


For the U.S., no good options — and one distant hope?

The Biden administration, like its predecessors, has few good options when it comes to North Korea. This may explain why the White House has unveiled no significant new initiatives. The stated U.S. policy is a “calibrated, practical approach,” a halfway house between President Barack Obama’s “strategic patience” and Trump’s all-or-nothing “grand bargain.” Biden has made clear that he is willing to talk to the North Koreans without conditions, but the North Koreans have shown little interest in further dialogue with the United States.

Almost every policy option short of preemptive war — which would be catastrophic — has already been tried, and none has worked. Threats of force, sanctions, diplomacy and foreign aid — all these efforts have run aground. For now, Biden has little choice but to maintain sanctions, shore up deterrence, defense and counter-proliferation measures, while keeping a door open for yet another round of diplomatic efforts. The United States may try to test Kim’s willingness to bargain for a nuclear freeze in return for a reduction in sanctions, but even such negotiations are likely to founder given Kim’s unwillingness to agree to intrusive verification measures. North Korea is unlikely to use its WMD as long as it faces the credible threat of American nuclear annihilation — but it is also not about to surrender those weapons, which Kim sees as his ultimate guarantee of regime survival.

The United States and its allies should abandon any idea of regime change by force, but they can take steps to loosen the regime’s grip on its people by pursuing an information campaign that aims to get news into North Korea, and allows North Koreans to safely communicate with one another and with outsiders. Despite the regime’s extreme efforts to block outside information, there have been small cracks in the firewall. Recent surveys of defectors indicate that before leaving the North, more than 92 percent had watched a foreign DVD; nearly 30 percent had listened to a foreign radio broadcast. A separate survey of a small number of North Koreans still inside the country found that 9 in 10 had consumed foreign media at least once a month. The U.S. should aid this effort in every way possible.

We also need to be ready for the day when North Korea eventually collapses of its own accord. This may seem a distant hope — odds are that Kim will continue to terrorize his people for decades, as long as his health holds — but it is important to remember how the world was caught off-guard by the fall of the Berlin Wall in 1989 and the demise of the Soviet Union two years later. Dictatorships do collapse — and the moment can come suddenly.

We must prepare for the moment when the North is reunited with the far more successful, far more democratic and far more wealthy state of South Korea. That day may not come for 100 years — but it will come, and it might come much sooner. When it does, the infrastructure of terror and coercion built by three generations of Kims will eventually come crashing down. And long after the Kim regime falls, it will still be studied both as an exemplar of repression — and a regime that failed at every task except maintaining its military might. And its own existence.

  • Sue Mi Terry
    Sue Mi Terry

    Special Contributor

    Sue Mi Terry is director of the Wilson Center's Hyundai Motor-Korea Foundation Center for Korean History and Public Policy.