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From the outside, North Korea appears to be an impoverished state, isolated from the rest of the world and unable to feed its own people.
However, during the military parade held in Pionyang last Sunday, it again demonstrated its power, something impossible if there are insufficient sources of funding.
Leonid Petrov, a researcher at the National University of Australia, told News.com.au that North Korea has enormous natural resources that it uses to finance its arms program.
"North Korea is a mountainous country with vast natural resources, including deposits of copper, silver, uranium, iron and high-quality rare earth metals," Petrov said.
Pionyang exported its mineral resources for decades to allies like China and the Soviet Union until the collapse of the communist block. Since then, it has been more active in international trade until the increasingly harsh sanctions against it have reduced that capacity.
The Asian giant has maintained trade with North Korea and seeks to remain monopolistic over trade in its rare earth metals.
"China buys everything North Korea is willing to offer [in that sector]," he said.
These metals are important because they are part of the production of many goods of this century such as mobile phones, computers, LCD screens and automobiles.
Workforce
Another source of profit for North Korea is the export of labor to China, Russia, the Middle East, Eastern Europe and Southeast Asia.
"Tens of thousands of North Koreans are sent abroad to work in restaurants, construction sites, as vegetable producers and as builders of monuments in places like Africa," Petrov said.
The expert explained that most of the salaries of these workers goes to the budget of the North Korean government.
"At friends prices"
Pionyang also encourages foreign investment. In that sense, Egypt has invested in the North Korean telecommunication network, in concrete plants and in construction projects. For its part, China is attracted by fishery resources, mining, and even has set up a supermarket chain in North Korea.
Until last year, China provided North Korea with resources such as oil and derivatives at "friend prices" or even for free.
And it is just that kind of trade that the United States aims to end, Petrov said.
China understands that completely isolating Pionyang would lead to the implosion of the North Korean regime, the absorption of the country by South Korea and the subsequent advances of US military forces towards the Chinese border.
"For that reason, China will not allow the economic collapse of North Korea," he said.
Sanctions difficult to implement
Even if China terminated its economic cooperation with North Korea, it would be replaced by Russia, which sees North Korea as a good market for its gas, oil and electricity. Moscow also hopes that North Korea could potentially open a gas export corridor to Seoul.
The implementation of sanctions against North Korea turned out not to be as easy as it was believed. A report by a UN expert panel published last month revealed that Pionyang managed to bypass sanctions using Chinese screen companies and other foreign entities.
Last year, North Korea continued to export its mineral resources that had been affected by the sanctions and had access to international banking.
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