Fifty years ago, Sweden entered into a deal with North Korea that seemed promising: the Scandinavian country agreed to send 1,000 Volvo 144 cars to the reclusive state. But in the decades since, that seemingly straightforward transaction has turned into one of the most bizarre and forgotten financial debacles in history. Sweden delivered the cars, but it never saw a penny in return. Today, the debt remains unpaid, and the likelihood of it ever being settled is almost zero.
A Deal with a Dictatorship: Sweden and North Korea in the 1970s
The 1970s were a different time for both Sweden and North Korea. While Sweden was enjoying its post-war economic boom, North Korea, under the rule of Kim Il-sung, was in the midst of a period of relative stability. The country, eager to strengthen its ties with the outside world, looked to Europe as a potential partner for trade and development. Sweden, on the other hand, was interested in accessing North Korea’s natural resources and hoped that by establishing a partnership, it could gain a foothold in a rapidly growing market.
It was against this backdrop that the deal was struck. North Korea agreed to purchase 1,000 Volvo 144 cars, a model that was popular for its durability and engineering. For Sweden, it seemed like a strategic business move—an opportunity to establish a relationship with a new market, while also securing a lucrative deal.
The Growing Debt Crisis: A Financial Nightmare for North Korea
Things started to fall apart almost immediately. By 1975, as North Korea neared the end of its first six-year economic plan, it was clear that the country was running into serious financial difficulties. The government was struggling with mounting debt, much of which had been borrowed from foreign countries. Despite assurances from the North Korean government that its plans were progressing smoothly, the reality was that the country was on the verge of default.
The problem for Sweden was that it never received the payment it was promised for the 1,000 Volvos. While North Korea continued to claim that the deal would be honored, the Swedes found themselves stuck in a financial limbo. Over time, as the country’s economic situation worsened, it became increasingly unlikely that the debt would ever be repaid.
A Forgotten Debt, But Not Forgotten by Sweden
Fast forward to today, and the debt remains a financial ghost that has never truly been laid to rest. One might assume that after fifty years, Sweden would have written off the debt, considering how difficult it would be to collect money from a country like North Korea, which is isolated from the global financial system. The debt is so old, it may even seem irrelevant to current policymakers. Yet, remarkably, Sweden has kept meticulous records of its foreign investments—and that includes unpaid debts.
According to Swedish officials, when factoring in inflation and interest rates, North Korea owes Sweden an estimated 300 million euros—an amount that, given the current political climate, will likely never be recovered. For the Swedish government, it’s an embarrassing reminder of a failed international transaction, and one that has, over time, become a forgotten footnote in global history.
Volvos Still Running in North Korea: A Last Laugh for the Regime
The irony of this whole situation is that, despite the fact that North Korea owes Sweden a fortune, some of the very cars that were part of the original deal are still running on the streets of Pyongyang. The Volvo 144, a symbol of the failed deal, continues to serve its purpose in North Korea, adding a final layer of insult to Sweden’s financial misfortune. These cars, which were supposed to represent a successful trade partnership, are now an enduring symbol of North Korea’s disregard for the agreements it makes—and a stark reminder that some debts, no matter how large, may never be paid.
In many ways, Sweden was taken for a ride. What began as a seemingly innocuous business transaction turned into an international headache, and one that’s unlikely to be resolved anytime soon. North Korea’s inability to honor its commitments has left Sweden holding the bill—literally and figuratively.
The Bottom Line: A Lesson in International Business
This unusual chapter in Sweden’s foreign trade history serves as a cautionary tale about the complexities of doing business with isolated regimes. It’s easy to assume that transactions with countries in dire economic straits will eventually be paid, but as the North Korea-Sweden deal shows, those assumptions can be dangerously misguided.
For now, Sweden’s 300 million-euro debt from North Korea remains unpaid, with little hope for a resolution. And as for the Volvos—well, they’re still running on the streets of North Korea, long after the deal that brought them there has been forgotten by everyone except those who remember the “lost millions.”