North Korea has decided to close diplomatic missions in at least four locations across the globe, a significant diplomatic shift that some observers say may indicate severe economic challenges.

According to a series of media reports that began emerging last week, North Korea will shutter its embassies in Uganda, Angola and Spain, as well as its consulate in Hong Kong.

North Korean state media have not publicly explained the reasons behind the closures. However, a North Korean ambassador was quoted in The Independent, a Ugandan newspaper, as saying Pyongyang is reducing its number of embassies in Africa to “increase the efficiency” of its “external institutions.”

South Korea’s Ministry of Unification, which handles relations with the North, attributed the closures to strengthened international sanctions against North Korea, which have disrupted the cash-earning operations of its overseas missions.

“This is one aspect that shows North Korea’s difficult economic situation, where it is now difficult to even maintain minimal diplomatic relations with traditionally friendly countries,” a South Korean official told local media outlets.

Before the closures, North Korea had diplomatic missions in 53 places, according to South Korea’s unification ministry.

Many North Korean embassies have been involved in the smuggling of weapons, drugs, and luxury goods, as well as other illicit commercial activity meant to earn cash for their economically isolated government, according to media reports.

Sanctions pressure

North Korea is barred from a wide range of global trade activities under U.N. Security Council resolutions first put into place over its nuclear weapons program in 2006.

As sanctions pressure increased, North Korea expanded its economic ties in Africa, by sending construction workers there and exporting massive, communist-style statues that are erected in public squares.

In recent years, some African countries, including Angola, have taken steps to sever contracts with North Korean construction companies, and requested that North Korean workers leave, in order to comply with U.N. sanctions.

It not clear, however, how those developments may have factored into North Korea’s decision to close its embassies in Uganda and Angola.

In reality, multilateral sanctions pressure on North Korea has remained flat for several years, even as it rapidly expands its nuclear arsenal.

That’s because Russia and China, North Korea’s primary international backers, have refused to support more sanctions at the U.N. Security Council.

Severe economic woes?

Some observers say the embassy closures may instead point to even broader problems with North Korea’s economy.

Thae Yong-ho, a former senior North Korean diplomat who now serves as a South Korean lawmaker, said the closures “prove that North Korea is struggling economically.”

In a Facebook post, Thae said North Korea’s difficulties can be seen as a second version of the “Arduous March,” the famine in the 1990s that may have killed millions.

“North Korea claims their harvest this year was good, but North Korean defectors who fled recently have complained of hunger,” Thae added.

There are no signs of mass starvation in North Korea – but even if there were, the outside world would not necessarily know. Virtually all foreigners, such as aid workers and diplomats, left North Korea during the COVID-19 lockdown and have not returned.

Amid the isolation, North Korea has grown closer to China and Russia. Most notably, North Korea has sent many artillery shipments to Russia for use in Moscow’s war against Ukraine, according to U.S. and South Korean officials.

More profitable ventures?

Those steps are apparently not enough for North Korea to overcome its financial woes, said Mason Richey, associate professor at South Korea’s Hankuk University of Foreign Studies.

“Unless it’s just streamlining, a North Korean version of corporate restructuring – getting rid of non-core lines of business to be able to focus attention where it is most profitable,” he said.

One possibility, according to Richey, is that North Korea has found cyber attacks, such as theft of cryptocurrency, to be a much more efficient means of acquiring cash.

Over the past five years, North Korean hackers have stolen more than $2 billion in cryptocurrencies, according to an August report by TRM Labs, which studies crypto-related financial crime.

“If sanctions make generating money from embassies difficult, and the arms trade in Africa perhaps tougher, and they don’t need that so much anymore because of crypto theft … then why keep open useless embassies that are a drain on North Korean funds?” Richey said.

Lee Juhyun contributed to this report.
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