Six months after North Korea first announced its border closure with China, the country’s economy is showing serious signs of decline. Cross-border trade between both countries was supposed to restart in June, but the borders remain shut and North Korean residents are feeling the pinch.
According to sources inside the country, it was likely North Korea itself that decided to postpone the resumption of cross-border trade with China, due to fears of COVID-19 spreading within its borders. Lately, the coronavirus has been spreading in China’s northeastern region, including in Liaoning province, which borders North Korea. This recent resurgence of infections near the Sino-North Korea border may be the cause of the continued border closure.
This argument can be further supported by Kim Jong Un’s latest activities — namely, the recent Politburo meeting he presided over, which was dedicated mostly to discussing the COVID-19 pandemic. At the meeting, Kim warned against complacency and urged even stricter virus containment measures to be implemented in the second half of the year. This suggests that containing the pandemic is a, if not the, top priority for the North Korean government.
Yet it seems that these strict measures are harming the North Korean people more than they are helping. Largely hidden from the rest of the world, North Korea is facing one of its most difficult financial years yet, with Sino-North Korea trade having plummeted by 90 percent in March and April compared to the same time last year. This is a significant development for several reasons.
Ever since the UN sanctions against North Korea came into force in 2016, China has accounted for 95 percent of the world’s trade with North Korea. Since then, the reported flow of Chinese exports to North Korea, other than the exports of banned goods, has remained quite consistent.
What’s more, China has remained North Korea’s main target of exports over the past few years. Even though the sanctions greatly restrict the variety of products that North Korea can export abroad, both Beijing and Pyongyang have come up with alternative ways to continue their close trading relationship. For example, North Korea exports various non-sanctioned goods, such as watches, wigs, and fake eyelashes to China in large quantities. Although the financial return has not been remarkably high, these adjustments have made it possible for trade to continue and for Pyongyang to continue receiving much-needed foreign cash.
Moreover, according to Chinese statistics, Chinese food exports to North Korea hit a record high in 2019. This could help us better understand why food prices in North Korea managed to remain relatively stable despite poor harvests early that year. It’s also worth noting that, over the years, Sino-North Korean trade has largely been concentrated in the Chinese border provinces of Liaoning and Jilin, which in 2016 accounted for about 60 percent of total reported bilateral trade. This again serves to underscore the importance of these border areas in sustaining North Korea’s already vulnerable economy.
Since late January, North Korea has been unable to import many daily necessities such as cooking oil, flour, and even rice. Prices for daily goods have skyrocketed and overall food insecurity is on the rise.
The dire economic situation has been referenced several times by the UN Special Rapporteur to North Korea, Tomas Ojea Quintana. According to him, food insecurity among ordinary citizens has increased, with many people only eating one to two meals a day, often consisting of corn instead of rice, while others are “starving.” Also according to the UN Rapporteur, over 40 percent of North Koreans “were already food insecure prior to the COVID-19 pandemic, many of them suffering malnutrition and stunted growth.”
North Korea has also been experiencing a rise of homeless people throughout the country.
The price of medicine has increased greatly and many patients with chronic conditions have been unable to even purchase their medications due to the halt in imports from China. Things have gotten so bad that North Korea’s Ministry of Public Health recently issued an order to hospitals in each province, city, and county to manufacture their own medicines. But most hospitals are unable to carry out this directive given the lack of necessary equipment and raw materials.
The situation in border areas is especially tough since most people there rely on the market to earn their income. However, due to the halt in Sino-North Korea trade, very little is able to make it across the border. As such, citizens have had to rely on alternative ways of making money. Some have gone to work in gold mines, others have resorted to picking berries to sell at markets, while others risk their lives to smuggle in goods from across the border.
According to local sources, many of North Korea’s factories are in danger of being shut down due to the prolonged suspension of trade with China. Company executives in North Korea’s North Hamgyong province have been feeling the pressure as most of their businesses have been unable to operate for the past six months. Many say that if they do not reopen immediately, their business will not survive.
But it’s not just border regions that are facing economic difficulty. Even Pyongyang, the country’s capital city that houses the elite, is feeling the financial burdens caused by the government’s COVID-19 containment measures. According to information from sources inside the country, reported via Daily NK, Pyongyang residents have not received food rations for three months.
This puts into perspective just how dire the economic situation has become, given that the government has always been able to provide for the residents in its capital, even during the height of the country’s famine in the 1990s. The last food rations Pyongyang residents received was in March and consisted mainly of corn, not rice.
The government has made clear that the strict virus containment measures will remain in place for the foreseeable future. On July 7, North Korean media reported that the country’s land, air, and maritime borders had been completely sealed off as part of “preventive measures.” Any objects entering the country’s borders will immediately be incinerated or disinfected.
Up to now, only emergency supplies have been able to make it through the border. But even this has been difficult. All cargo coming in from China must undergo a mandatory quarantine and be thoroughly disinfected before the goods are allowed to be transported within North Korea. However, the recent newspaper article brings into question whether North Korean border guards will be allowed to let Chinese cargo trucks through.
Before the government’s calls for stricter COVID-19 containment measures, North Korean authorities had ordered trading companies to increase imports of emergency supplies, which were being brought in unofficially, according to sources inside the country. But, even then, the amount of supplies coming in was far below what is needed to sustain the entire North Korean population. With Kim Jong Un’s recent calls for strengthening border controls and the implementation of stricter virus containment policies, the distribution of emergency supplies may become even more difficult.
While COVID-19 infections continue to be detected in neighboring China, it remains unclear when the borders will finally reopen. Until then, illegal smuggling is likely to continue while the humanitarian situation in North Korea falls further into decline.
Gabriela Bernal is a Korea analyst, contributor and translator at Daily NK, and freelance writer on Korean affairs. She is also an incoming Ph.D. candidate at the University of North Korean Studies in Seoul, South Korea.