As North Korea’s economy flounders, hints of easing isolation

There are tentative signs that the ‘Hermit Kingdom’ may relax borders following a devastating collapse of trade with China.

North Korea
North Korea's decision to seal its borders in the earliest days of the coronavirus pandemic has inflicted a heavy toll on its fragile economy [File: Kyodo/Reuters]

As a mysterious virus sickened people in China in early 2020, North Korea became the first country to seal its borders to the world.

After almost two years of near-total isolation due to what the world now knows is COVID-19, there are signs that Kim Jong Un’s secretive regime may be taking tentative steps toward loosening controls as the country grapples with severe economic deprivation following a collapse in trade with China.

South Korea’s spy agency last week told lawmakers that the North was in talks with China and Russia about resuming key cross-border train routes as early as this month and that authorities had in recent months accepted increased shipments of emergency supplies.

The briefing came after the release of Chinese customs data showing that total trade between the allies more than doubled in September to $69.9m.

The figures are still a fraction of the pre-pandemic peak, with total trade in the first nine months of this year reaching $185.3m, compared to $1.95bn during the same period in 2020.

The North, whose dilapidated health system would struggle to handle a major COVID-19 outbreak, has yet to report a single case of the virus, a record doubted by many observers given the country’s vast land border with China.

The World Health Organization also announced last month that it had restarted shipments of medical supplies to the country, after Pyongyang earlier this year rejected an offer of three million doses of the Chinese-made Sinovac vaccine.

China Dandong bridge
North Korea relies on China for more than 90 percent of its trade, with border cities such as Dandong serving as key gateways between the two sides [File: Dake Kang/AP]

Tim Peters, a Christian aid worker who runs Helping Hands Korea in Seoul, told Al Jazeera he had observed a “very limited opening of cross-border transportation” since the summer.

“I am aware of this because certain of our humanitarian shipments were able to be taken across the border about that time to very vulnerable citizens,” Peters said, adding that his organisation worked outside government channels and relied on “unofficial methods”.

Another aid worker, who spoke on condition of anonymity, told Al Jazeera that their organisation had been unable to get aid into the country and that any loosening of restrictions appeared to be confined to high-level official trade.

“I realize all things in DPRK are effectively controlled by the government, but there are gradations of control, and from what I am seeing, it seems that whatever trade is happening is at a pretty high level,” the source said, referring to the North by its official name of the Democratic People’s Republic of Korea.

“It doesn’t seem like ‘regular’ traders have been able to resume more pedestrian trading activities.”

Dire conditions

Obtaining accurate information out of North Korea is notoriously difficult due to the regime’s tight control of the country and has become harder still since the pandemic caused diplomats and aid agencies to leave the country en masse last year.

Few observers expect the North, which has long been known as the “Hermit Kingdom,” to open up widely anytime soon, and some analysts caution against overinterpreting recent signs of a tentative loosening of controls.

“Trade figures between China and North Korea obviously do not account for smuggling, and official figures have long been manipulated by the Chinese customs, which is why I don’t think we should use these as robust data points for analysis,” said Theo Clement, an adjunct lecturer at the Pyongyang University of Science and Technology and a consultant who has conducted fieldwork at the China-DPRK border.

“On China-DPRK trade, although various proxies are useful to get a sense of the trade activity between both countries, nothing beats qualitative fieldwork and besides Chinese researchers, we are not going to access the border and set up interviews anytime soon,” he told Al Jazeera.

There is widespread consensus, however, that the country is facing dire economic conditions.

North Korea counts on China for more than 90 percent of its trade, including imports of vital goods such as grains, fertilisers and agricultural equipment, and its population has long relied on cross-border smuggling and black markets to supplement a dilapidated state rationing system.

In addition to its pandemic isolation, the North’s economy has been hard hit by extreme weather and international sanctions aimed at stifling the regime’s nuclear and missile programmes.

The country’s economy contracted 4.5 percent last year, the steepest decline in over two decades, according to a July estimate by South Korea’s central bank.

Even before the pandemic, the United Nations estimated that more than one in four North Koreans suffered from malnourishment.

In July, the UN Food and Agriculture Organization predicted the country could fall short of its food needs by 860,000 tonnes in 2021.

Kim, the third member of his family to rule the secretive state, has himself acknowledged the hardships facing his population, even likening the crisis to the 1950-1953 Korean War.

Kim Jong-un
North Korean leader Kim Jong Un has acknowledged the growing hardship in the country [File: KCNA/Reuters]

“Even when harvests are good, DPRK is scarcely self-sufficient in grain even at the diminished levels on which it calculates,” Alastair Morgan, who served as the United Kingdom’s ambassador to the North between 2005 and 2008, told Al Jazeera.

“It is not clear to me that any branch of DPRK industry – including the relatively successful light industry – is or can be entirely self-sufficient.”

Morgan said he doubted the North would give up on trying to keep the virus out, but noted authorities may not have anticipated how long the pandemic would last.

“The consequences of closing the air, land and – intermittently – sea borders are likely to be very apparent within the country,” he said.

Peters, the aid worker, said the pandemic isolation had caused informal markets, known as jangmadang, to become “paralysed in obtaining necessary commodities to make available to the public, which has made hardships for ordinary people all the more grave”.

Potential liability

Although the North’s economy has lagged far behind that of neighbouring South Korea for decades, Kim oversaw modest growth in the initial years after he took power following the death of his father in 2011.

In a speech marking the anniversary of the ruling Workers’ Party last month, Kim stressed the need to improve people’s living conditions, after earlier admitting that his five-year economic plan had failed.

Benjamin Katzeff Silberstein, co-editor of North Korean Economy Watch, told Al Jazeera that Kim might feel more confident to “begin to open up” once authorities had completed quarantine facilities under construction at the border.

“In the long run, I do think the economic downturn poses a significant potential liability, although it’s very hard to say,” Katzeff Silberstein said. “The North Korean public has weathered difficult times before, but it’s a different story when the state first spends years sending the signal that the public should expect living conditions to improve, only to see them worsen.”

Source: Al Jazeera