James Pearson, Ju-min Park

North Korea has developed a nuclear weapons programme despite poverty and international sanctions, using home-grown technology and virtually free labour to cut costs, experts said.

South Korean government analysis has put North Korea’s nuclear spending at $1.1 billion to $3.2 billion overall, although experts say it is impossible to make an accurate calculation given the secrecy surrounding the programme, and estimates vary widely.

However, the weapons that North Korea has tested thus far are comparatively small and based mostly on less sophisticated fission, or atomic bomb, technology.

The isolated North’s claim that its fourth and most recent test, conducted last week, was of a more advanced and powerful hydrogen bomb has been widely doubted, although experts said it is possible Pyongyang took the intermediate step of boosting an atomic bomb with hydrogen isotopes.

A former South Korean official involved in nuclear diplomacy with North Korea told Reuters previously that it was likely the North’s nuclear programme was cutting corners on safety, further driving down costs.

North Korea was at the bottom of a 2011 list on nuclear arms spending by Global Zero, a group campaigning to rid the world of nuclear weapons.

The full cost of Pyongyang’s programme that year was estimated by the group at $700 million, making it the lowest spender among nuclear states, beneath Pakistan’s estimated $2.2 billion, although the analysis was made before the North’s two most recent nuclear tests. By comparison, the United States spent $61.3 billion on nuclear weapons in 2011, according to the report.

Construction of the Yongbyon Nuclear Scientific Research Centre, North Korea’s main nuclear facility, cost $600-700 million, based on a 2012 estimate, a South Korean defence ministry official told Reuters.

The small reactor at Yongbyon, which began construction in 1979, is based on Soviet-era technology and generates just 5 megawatts of power. “Actually, what they spend isn’t that much,” Kim Min-gyu, a former North Korean diplomat who worked at the North Korean embassy in Moscow until defecting in 2009, told Reuters. “Their workforce works for free and, except for a few key imported parts, they make everything else”.


Paying for those parts is not easy for a country whose official economy was worth just $28.4 billion in 2014, according to South Korea’s central bank.

But it has turned to a variety of sources for hard currency in the past, including counterfeiting, insurance scams, selling missile parts to the Middle East, and, more recently, exporting manpower abroad under conditions that human rights groups say resemble indentured servitude.

North Korea also boasts a booming unofficial market economy, driven by private trade that has flourished since the devastating famine of the 1990s, giving the state a relatively new source of foreign currency.

That grey economy has eclipsed the official one, experts said, and generates so much wealth that, after previous nuclear tests, wealthy traders known as “donju”, or “masters of money”, were arbitrarily and suddenly taxed by the state to pay for the nuclear programme, according to one report.

“After the first three nuclear tests, prominent donju were purged on ‘anti-socialist’ charges and their assets confiscated by the state,” a source inside North Korea told the Daily NK, a Seoul-based website staffed by defectors still in touch with contacts inside North Korea.

In addition, North Korea exported more than $1 billion in minerals last year, mostly coal, to China, its main trading partner, according to Reuters calculations based on Chinese export data.

Although heavily sanctioned, North Korea still sells small arms to buyers who turn to Pyongyang because of a lack of viable alternative supplies, according to a recent report by Andrea Berger at the Royal United Services Institute (RUSI) in London. It also raises $200-300 million a year sending labourers as far afield as Poland and Mongolia to earn cash, said the Database Center for North Korean Human Rights in Seoul.

Kim Min-gyu, the former diplomat, said labourer salaries are usually used to prop up the Pyongyang economy, and not invested in the nuclear programme.

“Since money is completely fungible, you can’t isolate the transactions that go to pay for bombs from those that pay for apartment buildings in Pyongyang,” said Christopher Green, a North Korea expert at Leiden University in the Netherlands.

Fake missile test footage

Footage of a North Korean submarine-launched ballistic missile (SLBM) test released by Pyongyang two days after it announced it had conducted the country’s fourth nuclear test last week was faked, according to an analysis by a California-based think tank.

In defiance of a UN ban, the isolated country has said it has ballistic missile technology which would allow it to launch a nuclear warhead from a submarine, although experts and analysis of North Korean state media cast doubt on the claim.

North Korean state television aired footage on Friday of the latest test, said to have taken place in December. Unlike a previous SLBM test in May, it had not been announced at the time.

“The rocket ejected, began to light, and then failed catastrophically,” said Melissa Hanham, a senior research associate at the California-based Middlebury Institute’s James Martin Centre for Nonproliferation Studies (CNS).

South Korea’s military said on Saturday North Korea appeared to have modified the video and edited it with Scud missile footage from 2014 although an official told Reuters that the ejection technology might have improved since the May test.

The CNS analysis shows two frames of video from state media where flames engulf the missile and small parts of its body break away.

“North Korea used heavy video editing to cover over this fact,” Hanham said in an email.

“They used different camera angles and editing to make it appear that the launch was several continuous launches, but played side by side you can see that it is the same event”.

North Korean propagandists used rudimentary editing techniques to crop and flip old video footage of an earlier SLBM test and Scud missile launch, the video analysis showed.

The North’s claim that its fourth and most recent nuclear test, conducted last Wednesday, was of a more advanced and powerful hydrogen bomb has drawn scepticism from the US government and experts.

It is also unclear if North Korea has developed a nuclear device small enough to mount on a missile.–Reuters