They don’t have endless money for its army, they simply put all of their money into their army and little else. Keep in mind that they are around 70 years behind on the nuclear weapons development train, so it’s not exactly gone all that well for them.
The very best that North Korea is able to do is also incredibly shambolic in every sense. They are a failed state in everything but name, and the people suffer for it.
One has also to ponder the mutual logic of propaganda. North Korea is no doubt not as strong as it seems but most important players have an interest in inflating the image of a militarily strong NK.
NK itself has invested a lot of its ideology and social organization in prioritizing the military and describes iself as constantly under an existential threat that is only avoided because of their strenght.
The politics and social organization of South Korea has the threat of NK as a corner stone. An obviously military weak NK would threaten the authority of a lot of powerful people in SK.
The US uses the threat of NK in order to defend its military precence in SK and NE Asia in general, without openly and directly antagonizing China. It has also been a great bogeyman in defending the perpetual expansion of the military-industrial complex for the US electorate, especially in the years before 2001.
China use NK as a buffer. That buffer needs to be seen as a having strenght enough to defend itself. China wants to project itself as the adult in the room that can handle NK, but are also visibly irritated by many of their shenanigans.
It all can be compared to how Syria and the Syrian Arab Army was often described before the civil war. What was often described as a strong threat against Israel, internally and externally, quickly fell apart under the weight of incompetence, disrepair, corruption, mutinies and general incompetence.
It took years and a lot of support by Russia, Hezbollah and Iran until the Assad regime could put together a somewhat competent fighting force on the ground. Hezbollah, a non-state militia, actually seems to have needed to educate a lot of Syrian commanders in things like “don’t let your men attack a well fortified enemy position by running straight at it over an open field”.
Strenght can very much be a question of optics.
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