Is North Korea's Economy Showing a 'Red Light'?

[Asia Economy Reporter Yoo In-ho] Analysts in diplomatic circles are raising red flags about North Korea's economy.

Following the North Korean Workers' Party's continuation of the 2nd plenary meeting for three days, indicating plans to strengthen legal supervision and control over the execution of economic plans, diplomats who visited North Korea have testified to witnessing abnormal economic signs.

Korean Central News Agency reported that at the 3rd day meeting of the 2nd plenary session of the 8th Central Committee of the Workers' Party, "(Kim Jong-un, the Party General Secretary) pointed out the importance of strengthening legal supervision and control over the establishment and execution process of the people's economic plan."

That is not all. Alexander Matsegora, the Russian ambassador to North Korea, revealed that serious disruptions in procuring various goods have occurred in North Korea due to border closures aimed at preventing the spread of COVID-19.

In an interview with Russia's Interfax news agency on the 8th (local time), Ambassador Matsegora said, "Like everywhere else, honestly, life in Pyongyang is not easy," expressing the difficulties of living in North Korea due to COVID-19 lockdowns.

He explained, "North Korea already closed its borders in January last year, and since then, while it has been somewhat possible to leave North Korea, entry has become completely impossible even for North Koreans. At the same time, the North Korean government restricted imports of goods, and until August last year, essential items for the country could be brought in under special decisions by the local emergency anti-epidemic committee leadership, but after the typhoon in September, imports were completely banned."

He continued, "This self-imposed lockdown has negatively affected not only the economy but also the lives of residents. Many companies have stopped due to lack of imported materials, raw materials, and parts, and people have lost their jobs. Children have practically not been able to attend school for almost a year and have stayed at home," he reported.

Matsegora said that the lockdown measures apply equally to foreigners residing in North Korea, explaining that since January last year, diplomats have been prohibited from moving outside Pyongyang, and children are not allowed to leave the embassy grounds.

He added, "Foreigners have been allowed to use about 300 stores in Pyongyang and one special market, but after months of lockdown, the goods on shelves have dropped to minimal levels, making it difficult to purchase basic food items like flour, cooking oil, and sugar, and there are no clothes or shoes. Even if something can be bought, prices are three to four times higher than before the crisis," revealing the reality.

He lamented that as embassy staff children grow, clothes and shoes no longer fit, so parents are coping by passing items among themselves, but shortages of medicine and the inability to return home for treatment are real problems.

Ambassador Matsegora explained the background for the difficulty in lifting the lockdown, saying, "North Korean authorities openly acknowledge that because there is insufficient medical infrastructure to deal with COVID-19 outbreaks in North Korea, what they can do is thoroughly block the inflow of COVID-19."

Nevertheless, he expects that after some time, North Korea will partially open its borders to import goods, and he speculated that the large-scale quarantine facilities currently being built at borders with Russia and neighboring countries are intended for the safe import of goods.