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[Editorial] Keep sanctions intact

Data shows extended sanctions biting deeper into impoverished North Korean regime

Data released by the Bank of Korea last week shows North Korea’s economy continuing to contract amid prolonged international sanctions imposed on the recalcitrant regime to choke off funding for its nuclear weapons and missile programs.

The North’s gross domestic product is estimated to have shrunk 4.1 percent in 2018 from the year before, marking its worst performance since 1997, when it backtracked 6.5 percent. Last year’s negative growth also follows an estimated 3.5 percent on-year contraction in 2017.

With Pyongyang rarely disclosing figures on the economy, the estimates by the BOK are based on information on the North’s economic activities provided by various institutions here.

North Korea’s shrinking economy suggests tighter sanctions implemented over the past few years under the UN Security Council resolutions have begun to bite deeper into the impoverished regime. The North had seen its GDP expand 3.9 percent in 2016.

The regime has suffered especially from measures to block outbound shipments of its three key export items -- coal, textiles and fisheries products -- in a bid to cut off its access to hard currency that could be used for its weapons programs.

North Korea’s exports are estimated to have plunged 86.3 percent to a mere $240 million last year from $1.77 billion in 2017, according to BOK data. Its imports dropped 31.2 percent on-year to $2.6 billion. Among goods that the North is barred from importing under the international sanctions regime are luxury items such as vehicles and whiskey, which are said to be used to enhance North Korean leader Kim Jong-un’s grip on his subordinates.

In 2018, North Korea’s overall trade is estimated to have plunged 48.8 percent from a year earlier to $2.84 billion, recording a deficit of more than $2.3 billion.

It seems to be only a matter of time before Pyongyang’s foreign currency reserves, which were estimated to have reached $5 billion when Kim inherited power from his late father Kim Jong-il in 2011, will be exhausted.

The increasing pain felt by the Kim regime under the extended sanctions has been made clear, paradoxically, by its emphasis on self-reliance and economic development.

Kim Su-gil, a top officer of the North Korean Army, said Friday that Pyongyang would firmly guard the isolated regime’s self-reliance in the face of international sanctions over its nuclear and missile tests.

In an editorial Saturday marking the 66th anniversary of the signing of the armistice that ended the 1950-53 Korean War, the Rodong Sinmun, the mouthpiece of the North’s ruling Workers’ Party, urged people to focus on economic development with a strong will to protect the Kim regime.

Some critics here say that trade figures should not be used to exaggerate North Korea’s economic predicament, noting its economy has become increasingly dependent on black markets that have sprung up since the 2000s.

But it is reported that about 480 marketplaces have disappeared around North Korea in recent years.

The construction of a tourism complex in the North’s eastern coastal city of Wonsan, Kangwon Province, which has been overseen by Kim, is known to have been suspended due to a shortage of materials.

Despite the rhetoric of self-reliance, North Korea’s fragile economy has been virtually shored up by a small-scale trade with the outside world and informal local markets. A collapse of trade appears to be resulting in suspending market activities, exacerbating the North’s economic situation and the livelihoods of its people. North Korea’s per capita income is estimated to have remained at 1.43 million won ($1,208) last year, less than 4 percent of the approximately 36.8 million won for South Korea.

Kim was apparently frustrated with Trump’s position of taking time to reach a deal on easing sanctions against his regime in return for substantial progress in its denuclearization during their summit in Hanoi in February.

Kim’s increasingly harsh verbal attacks on South Korean President Moon Jae-in also seem to reflect his anger at the Moon administration’s failure to circumvent the UN sanctions regime to resume inter-Korean economic projects.

What is needed now is to keep sanctions on the North intact until Kim is ready to take concrete steps toward irreversible denuclearization in a fully verifiable manner.

A special security adviser to President Moon suggested last week that North Korea could get sanctions relief by dismantling its Yongbyon nuclear complex. But the measure would be far from sufficient to warrant a significant easing of sanctions against Pyongyang.

The North should be made to recognize that adherence to its nuclear arsenal would do nothing to prevent the crumbling of its economy and eventually its regime.
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