AYESHA RASCOE, HOST:
Yes, North Korea is back in the headlines after President Trump said he expected to meet the country's leader later this year. But the dictator's sister said in a statement that she's, quote, "completely unaware" whether her brother communicated with the U.S. president. That overture by Trump comes as North Korea's economy booms, a development that surprised many analysts of the secretive nation. Rachel Minyoung Lee is a senior fellow for the Korea program at the Stimson Center, and she joins us now. Welcome to the program.
RACHEL MINYOUNG LEE: Thank you. Thank you for having me.
RASCOE: So North Korea's economy appears to be thriving, growing at more than 3% a year. What is driving this growth?
LEE: That's a good question. And I think the important story here is not simply that North Korea's economy grew by 3.5% in 2025, but that it has now sustained growth for three consecutive years. Several things are driving the growth. First of all, we have to think about North Korea's relationship with Russia. North Korea has been exporting weapons to Russia since late 2021, and the weapons exports seem to have contributed to North Korea's improved economy.
Domestically, we also have to think about the many national economic construction projects that are creating demand. And also we have to think about the fact that North Korea has reopened its borders after the pandemic, so trade with China has gone up as well.
RASCOE: Obviously, extreme poverty has been widespread in North Korea. Is this economic growth improving the quality of life for its citizens?
LEE: I think overall, yes, but I also think that it's important to remember that there is a huge gap between people in Pyongyang and the rest of the country. So people who live in Pyongyang are the privileged class. According to testimonials from people who have recently visited Pyongyang, the livelihood has definitely improved - more cars in the streets, more lights, more high-rises. And it is hard to say that that is the case for the rest of the country.
And I think this is proven, actually, evidenced by the fact that North Korea has been really focused on improving people's livelihoods outside of Pyongyang by rural development projects, all of the housing projects. I think this drive to improve local economies underscores the point that the wealth gap between Pyongyang and the rest of the country remains big and that it has become a political problem for Kim Jong Un.
RASCOE: The U.S. has imposed sanctions on North Korea for decades, most recently to try and curb the country's nuclear weapons program. What effect have those sanctions had on the country?
LEE: There's a lot of debate about the effectiveness of sanctions because North Korea, despite the years of sanctions, managed to make a lot of progress in its nuclear and missile programs and has even managed to grow the economy. I don't think it's fair to say that sanctions are ineffective, but they are as good as how they are enforced. With China and Russia either turning the other way or just openly helping North Korea violate sanctions has really eroded the sanctions regime overall.
RASCOE: Will a growing economy help strengthen the position of North Korea's leader, Kim Jong Un?
LEE: I think that North Korea's improved economy has already bolstered Kim Jong Un's position domestically, only because he has managed to come out of the prolonged COVID lockdown period victorious. And despite the years of sanctions, he has managed to improve the economy. So I think what this has taught Kim Jong Un is that he doesn't really have to fundamentally change his economic policy for the foreseeable future.
RASCOE: President Trump said he reached out to North Korea's leader for a meeting and received a positive response. What do you think are the chances of another meeting between Trump and Kim?
LEE: I personally don't think that the chances are very high because North Korea's threshold for reengagement with the United States remains impossibly high. North Korea has not rejected President Trump's overtures, but it has set the bar very, very high. And that bar really constitutes U.S. recognition of North Korea's nuclear status.
RASCOE: President Trump famously met with Kim on several occasions during his first administration. What came out of those meetings?
LEE: In terms of what actually came out of those meetings, I mean, nothing. Even if there is another U.S.-North Korea summit, you know, there are such different expectations from all sides. It's really hard to tell what will actually come out of it, other than maybe a photo op. And they have said at the very highest levels - and by they, I mean North Korea - that they will not give that photo op opportunity to Trump.
RASCOE: That's Rachel Minyoung Lee from the Stimson Center. Thank you so much for joining us.
LEE: Well, thank you so much.
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