North Korea Driven to Trade Cliff by COVID-19... North Korea-China and North Korea-Russia Trade Hits Bottom

North Korean Premier Kim Deok-hoon inspected the target construction form for the establishment of the Carbon One Chemical Industry on site, the Korean Central News Agency reported on the 13th.

The prolonged border closures implemented in response to the novel coronavirus disease (COVID-19) have pushed the North Korean economy into an unprecedented trade cliff. Despite sanctions against North Korea following its nuclear development, the country has maintained minimal trade with China, Russia, and others; however, recently even exports and imports of non-sanctioned goods have declined. Concerns are rising that the contraction of the North Korean economy is more severe than ever.

According to the Russian Federal Customs Service on the 14th, North Korea's imports from Russia in October decreased by 81% compared to the previous month, and exports fell by 51%. Breaking down imports by category, pharmaceuticals amounted to $243,500 (approximately 270 million KRW), and food was about $5,500, which appears to be the lowest monthly figure this year. North Korea imported $799,000 worth of pharmaceuticals from Russia in July, and also imported significant amounts in June ($403,000) and May ($288,000).

William Brown, a North Korean economy expert and professor at Georgetown University, analyzed in an interview with Voice of America (VOA) on the 12th (local time) that "even exports and imports of goods not blocked by UN sanctions have decreased," and that "the economic repercussions beyond sanctions are stirring within North Korea."

Trade with China, which accounts for over 90% of North Korea's external trade capacity, has also sharply declined. The Korea International Trade Association reported that North Korea-China trade volume in October was $1.66 million, a 99.4% decrease compared to October last year. It was 92% lower than September ($20.8 million), marking the lowest monthly amount ever recorded.

This is fundamentally attributed to COVID-19 related quarantine measures. The U.S.-based North Korea specialist media outlet NK News estimated that "the decrease in North Korea's exports and imports is due to North Korea reducing trade to prevent COVID-19 ahead of the Workers' Party of Korea founding day on October 10 and the 8th Workers' Party Congress scheduled for January next year."

As the trade cliff caused by COVID-19 becomes a reality, the market economy, which had been compensating for the failures of North Korea's planned economy, appears to be rapidly shrinking. The extreme restrictions on the movement of people and goods are causing the market to lose its proper function. The North Korean authorities have not presented clear economic alternatives under the current circumstances. They are fervently mobilizing residents under the abstract goal called the "80-day battle."

Yang Un-chul, senior research fellow at the Sejong Institute, stated in the recently published December issue of "Current Affairs and Policy (Evaluation of Kim Jong-un's Economic Policy in 2020)" report that "the North Korean economy is expected to experience significant economic turmoil due to production decline and market contraction," and analyzed that "if the North Korean economy, which is suffering from triple hardships, does not implement reformative economic policies, the likelihood of reverting to the difficult times of the past increases."

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