By examining how North Korea, Inc. — the web of state trading companies affiliated to the Korean Workers’ Party, the Korean People’s Army, and the Cabinet — operates, this report highlights a new framework for gauging regime stability in North Korea.

Assessing regime stability in North Korea continues to be a major challenge for analysts. By examining how North Korea, Inc. — the web of state trading companies affiliated to the Korean Workers’ Party, the Korean People’s Army, and the Cabinet — operates, we can develop a new framework for gauging regime stability. As interviews with defectors who previously worked in these state trading companies indicate, the regime is able to derive funds from North Korea, Inc. to maintain the loyalty of the North Korean elites and to provide a mechanism through which different branches of the North Korean state can generate funds for operating budgets. During periods when North Korea's international isolation deepens as a result of its brinkmanship activities, North Korea, Inc. constitutes an effective coping mechanism for the Kim Jong Il regime.

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