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North Korea is experiencing worsening economic hardships and food shortages caused by the Covid-19 pandemic and UN sanctions. Despite these difficulties, the country has conducted a record number of missile tests in recent years, raising suspicions about the funding of its weapons programs through illegal cyber activities and covert exports of banned items.

According to the National Intelligence Service (NIS), North Korea’s economy has been shrinking since 2020, with the country’s gross domestic product for 2021 being 12% lower than in 2016. Experts believe that the current food shortages and economic troubles are the most severe since Kim Jong Un assumed power in late 2011. However, there are no signs of a major famine or widespread unrest that could threaten Kim Jong Un’s hold on power.

The government’s attempts to restrict market activities, dwindling personal incomes, and pandemic-related trade restrictions have further aggravated the food problem, according to North Korea monitoring groups.

The NIS has revealed that North Korea has been engaged in covert exports of coal and gold in violation of UN sanctions. It estimated that the country has stolen over .5 billion in virtual assets since 2015. The intelligence service also predicts that Kim Jong Un is likely to resume weapons testing in response to US-South Korean military drills and an upcoming US-South Korea-Japan summit.

The NIS has detected increased activities at North Korean facilities involved in the production of intercontinental ballistic missiles (ICBMs). There are also indications that North Korea is preparing for the launch of a spy satellite. Kim Jong Un has expressed his determination to develop high-tech weapons systems, including a military reconnaissance satellite.

While North Korea has made progress in its missile technology, mastering some remaining technological challenges is necessary. The country’s shorter-range missiles can already target South Korea and Japan, while its ICBMs have the potential range to reach the US mainland. The use of solid-fuelled missiles makes detection and launch more difficult.

North Korea’s missile tests and activities are seen as a response to US efforts to strengthen alliances with South Korea and Japan. The country aims to enhance its military capabilities to counter the perceived threat from these exercises.

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