Although U. N. sanctions have limited growth, North Korea’s financial health — and the physical health of its people — seem to be stabilizing
This story is being published by POLITICO as part of a content partnership with the South China Morning Post. It originally appeared on scmp.com on June 3,2018.
Pyongyang has been the target of a string of U. N. bans from trade to travel for more than a decade, the toughest coming in September when they were expanded to cover crude oil.
Just six months later Kim sent a message offering to meet President Donald Trump with no strings attached.
Senior U. S. and Japanese officials credited the offer in large part to the international sanctions, which they maintained had battered the already beleaguered North Korean economy.
But there is evidence — anecdotal and data — that North Korea’s economy has stabilized over the past few years, and while U. N. sanctions are limiting its growth, the country is far from famine or total collapse.
Reliable data on North Korea is hard to get. But information from various sources suggests that it has been making noticeable improvement since Kim came to power in December 2011 – at least before a new round of United Nations sanctions began taking effect this year.
Park En-na, South Korea’s ambassador for public diplomacy, said the general picture was that North Korea’s economy was getting better.
“Kim has introduced many new elements to the economy. To some extent, they even allowed privatization,” Park said.
Kim has rolled out various measures to accelerate his country’s economic development and loosen the government’s grip on business and industry. In 2012, he offered factories and companies incentives to improve productivity and a year later, he established 13 new economic development zones to try to attract foreign investment. More market-oriented reforms were adopted in 2014 to further liberalize the economy. On top of that, improving living standards is now a national priority.
TICKING OVER
Although the direct effect of these decisions is hard to measure, there are some economic indicators of progress.
The Bank of Korea, the central bank in Seoul, estimated the North Korean economy had grown 1.24 percent on average since Kim took power, expanding by 4 per cent to US$28.5 billion in 2016, the fastest growth in 17 years.
Pyongyang’s trade figures also reveal signs of economic expansion since 1996.
North Korea’s main exports are minerals, metallurgical products and manufactured goods including armaments, according to the latest Central Intelligence Agency’s World Factbook. Its main imports are petroleum, coking coal and machinery.
While its export totals have grown at an annual average of 4 to 5 per cent, its imports marked 3 to 5 percent annual growth over the period, according to a Bank of Korea report “Analysis on the Openness and Economic Welfare of North Korea”, by Jeong Hyeok, Choi Chang-yong and Choi Ji-young.
