Washington and Tokyo say the application of “maximum pressure” through United Nations sanctions was decisive in bringing North Korean leader Kim Jong Un to the summit table. 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 U.S. President Donald Trump — with no strings attached.
But there is evidence, both anecdotal and data driven, 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 being on the brink of famine or total collapse — as it once was.
Reliable data on North Korea is nearly impossible to come by, but information from various intelligence and non-governmental organization 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.
Kim has rolled out various measures to accelerate his country’s economic development since 2012 and though 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% on average since Kim took power, expanding by 4%t to US$28.5 billion in 2016, the fastest growth in 17 years.
Pyongyang’s economy is heavily reliant on China, its one and only ally. In 2016 China accounted for 85.6% of its exports and 90.3% of its imports. Market analysis firm IHS Markit estimated that trade between the two countries had increased since Kim took power, with China accounting for 81% of North Korea’s trade in 2012 and 91% in 2016.
International observers also report that conditions in North Korea appear stable, claiming that in recent trips to North Korea, they have not witnessed the famine and starvation as witnessed in the 1990’s. It is quite possible that the nepotistic Kim regime has just become better equipped at obfuscating those dire facts from foreign eyes.
Many analysts say Kim uses nuclear weapons as a bargaining chip for aid to offset the effect of the sanctions and thereby realize his much-needed economic goals. Others see it as part of a control mechanism to keep himself in power, and more pointedly, alive. Others disagree, like Chung Jae-heung, a researcher at the Sejong Institute in Seoul, who believes North Korea was emboldened by its nuclear strength rather than bowed by a sanctions-hit economy. Chung told the South China Morning Post,
It’s Pyongyang’s confidence as a nuclear state that brought Kim to the negotiating table, not solely UN sanctions, as its economy is not as bad as many of us think. The North Korean regime is not likely to collapse due to UN sanctions, as Beijing is unlikely to cut down its oil supply to the extent that may threaten the survival of the Kim regime.”
For many reasons — not the least of which is the crisis that North Korean refugees would put on the Chinese economy directly if the hermit kingdom were to fall completely apart — China is unlikely to let the North Korean economy go belly up. As per the norm, China will more likely play along on face with the international community and continue to serve its own needs behind the scenes.
What say you SOFREP? Was it economic pressure the brought Kim to the table or something else? Sound off in the comments.