Concerns Over Economic Impact of North Korea's Extreme COVID-19 Lockdown Policy

Russian Embassy bans entry of new staff to foreign diplomatic missions including Pyongyang-based diplomats
Foreigner-targeted profit businesses also halted
Experts warn of economic impact due to border trade closure

[Asia Economy Reporter Lim Cheol-young] There is an analysis that North Korea's extreme measures against the novel coronavirus infection (Wuhan pneumonia) will have a negative impact on the economy. North Korea has completely closed its borders to prevent the spread of the virus, restricted the entry and exit of diplomats stationed in Pyongyang, and has also suspended profit-making businesses targeting foreigners.

On the 5th, Voice of America (VOA) reported, citing the Russian Embassy in North Korea, that North Korea has banned the entry of new staff at foreign diplomatic missions as part of efforts to prevent the spread of the novel coronavirus. The Russian Embassy posted on Facebook that North Korea sent a diplomatic note notifying this, and that diplomatic personnel stationed in Pyongyang entering North Korea for purchasing goods were also included in the entry ban.

Recently, North Korea has been continuing strict quarantine measures. Previously, to block the inflow of the novel coronavirus, North Korea closed the North Korea-China border and banned the entry of foreign tourists. In addition, the North Korean Ministry of Foreign Affairs reportedly extended the medical observation period for some foreign diplomatic staff who entered North Korea on the 31st of last month until the 15th of this month, and indefinitely suspended operations of hotels, restaurants, and other businesses providing services to foreigners.

Experts have diagnosed that North Korea's extreme lockdown policy will negatively affect the economy. It is analyzed that not only will North Korea's tourism revenue sharply decline, but the North Korea-China border trade, which accounts for 25% of total exports, will also be directly hit. Last year, the scale of goods North Korea imported from China was 17.76 billion yuan, a 21% increase compared to the previous year, and the amount exported to China was 1.48 billion yuan, an increase of more than 4%.

Jung Hyung-gon, Senior Research Fellow at the Korea Institute for International Economic Policy, explained in an interview with VOA, "Due to the novel coronavirus, activities of people abroad have become difficult, so there will likely be considerable difficulties in terms of tourism revenue as well as foreign currency earnings." He also added that the economic damage China will face could adversely affect North Korea.

There is also a forecast that the ban on foreign tourists' entry will negatively impact the economy and that smuggling, which occurs through interpersonal contact, will shrink. Im Soo-ho, Senior Research Fellow at the Institute for National Security Strategy, explained, "If the border is controlled, there will be disruptions in foreign currency supply, and smuggling requires interpersonal contact, so if interpersonal contact between North Korea and China is blocked inside North Korea, smuggling of production goods will inevitably weaken."

Meanwhile, North Korea is conducting an all-out effort to prevent the inflow of the novel coronavirus by deploying a large-scale quarantine workforce of about 30,000 people and effectively imposing a 'stay-at-home' order on foreigners residing in the country.

This content was produced with the assistance of AI translation services.