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Trends in North Korea: the Impact of
Economic Sanctions, Growing North-South
Tension & Reform Under Self-Reliance

By Mitsuhiro Mimura

Foreword
The Democratic People’s Republic of Korea (North Korea) has
seen its trade and inbound foreign direct investment devastated by
the sanctions imposed under five UN resolutions adopted in 2016
and 2017. Nevertheless, it has not given up its pursuit of domestic
economic reform and also emphasizes procedural justice.
As the new type coronavirus spread in neighboring China, North
Korea set up a special anti-epidemic system on Jan. 30, 2020 andclosed its international borders in early February. It announced thatthe nation had no cases of Covid-19 as of Aug. 31. It has declaredthat it will continue to maintain its special anti-epidemic system eventhough the disease has stopped spreading in many East Asian
countries. A close look reveals that there are political motives behindthis.
In mid-June, North Korea gave a ferocious response regarding
flyers floated from the Republic of Korea (South Korea) into theNorth by a group of North Korean defectors and blew up the buildingthat housed the Joint Inter-Korean Liaison Office, a monument to the
5th Inter-Korean summit held in September 2018.
This report will cover the impact of sanctions on North Korea, thetension in North-South relations, reform under self-reliance, andother matters necessary to understanding recent trends in North
Korea.

The Impact of Economic Sanctions on North Korea
Sanctions against North Korea can be broadly divided into two
categories: the unilateral sanctions by the United States, Japan, andSouth Korea, and the multilateral sanctions under UN resolutions.
Since there had already been minimal trade between the US andNorth Korea, the practical effect of US sanctions will be tocomplicate North Korea’s resumption of its place in the international
community when its relations with the US improve. Japan’s unilateralsanctions were codified in the first half of the 2000s as pressure on
North Korea to resolve the abductee issue, but have been augmented
whenever North Korea conducted ballistic missile and nuclear tests.
Japanese imports from North Korea and Japanese exports to North
Korea ceased in 2006 and 2008 respectively, much of them being
replaced by trade with China and South Korea.
Since President Kim Dae-Jung’s visit to North Korea in 2000,
South Korea has been actively engaged including fiscal expenditures
https://www.jef.or.jp/journal/

AuthorMitsuhiro Mimurain such activities as the construction of facilities in the Kaesong
Industrial Zone (KIZ). However, the sinking of the South Korean
warship Cheonan in March 2010 led the Lee Myung-Bak
administration to impose unilateral sanctions. Since activities at the
KIZ were suspended in 2016 under the Park Geun-Hyeadministration, there have been little to no economic exchanges
between the two Koreas. Political relations have improved under theMoon Jae-In administration, but economic sanctions have yet to belifted. The imbalance between political and economic relations has
been one cause of the deterioration in the bilateral relationship.
Multilateral sanctions under UN resolutions beginning withresolution 1718 (2006) adopted on Oct. 14, 2006 have been
reinforced whenever North Korea has conducted nuclear or ballistic
missile tests. The multilateral sanctions imposed under the five
resolutions adopted in 2016 and 2017 in particular are extremely
severe, as they clamped down on all overseas economic relations ofNorth Korea including trade, financial transactions, foreign direct
investment, and sending workers overseas, unlike sanctions underprevious resolutions, which had been limited to nuclear and ballistic
missile development and arms transactions. They were aimed atforcing North Korea to abandon its pursuit of nuclear weapons by
cutting off its foreign exchange earnings and imports of production
inputs necessary for industrial activities. Current multilateralsanctions (https://www.un.org/securitycouncil/sanctions/1718)
under UN resolutions cover a wide range of activities.
Chart 1 shows that North Korean exports declined by almost 90%
as the result of more forceful multilateral sanctions. Imports, as
Chart 2 shows, have not suffered as much, but the deterioration in
the trade balance has resulted in a serious loss of foreign exchange.
The numbers are expected to deteriorate further in 2020 as North
Korea has closed its borders in response to the new type
coronavirus, as I will explain later.
Even while it suffered the consequences of these sanctions, North
Korea continued to look to improve relations with the US and South
Korea and ended the byungjin policy of parallel development of
nuclear weapons and the economy on April 20, 2018, which it had
been pursuing since March 31, 2013. This had the great symbolic
significance of ending the policy of dedicating the bulk of its
resources to building up national defense, which it had pursued for
55 and a half years since it adopted the byungjin policy of paralleldevelopment of national defense and the economy at the 5th plenary
meeting of the 4th Central Committee of the Workers’ Party of Korea
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CHART 1Main export destinations of North Korea &value of exports

Transmission of the Novel Coronavirus& North Korea’s Response

On Jan. 22, 2020, two days after China admitted
the “human-to-human infection” of the new type
coronavirus and announced that it would “firmly
China
Russia3,000
JapanSouth Korea
contain” it, North Korea prohibited the entry of
2,500
ThailandIndia
tourists (actually including foreign visitors for
BrazilOthersbusiness and other purposes) from China. Since
2,000
almost all foreign visitors including from Japan
1,500
enter North Korea through China, this effectively
1,000
stopped all exchanges other than with Russia.
On Jan. 30, the Korean Central News Agency
500(KCNA), the state news agency of North Korea,
0conveyed the conversion of the sanitary and anti99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
epidemic system to a national emergency antiSource: Ministry of Unification, South Korea, and Korea Trade and Investment Promotion Agency
epidemic system in a report entitled “Emergency
Measures Are Being Taken to Thoroughly Prevent
Covid-19”. Two days later, on Feb. 1, the Rodong
CHART 2
Sinmun, the official newspaper of the Workers’ Party
Main import sources of North Korea & valueof importsof Korea, published an editorial entitled “Execute
Undertaking to Prevent the New Type Coronavirus(Unit: US$ million)
4,500
with High Intensity”.
4,000
Under the national emergency anti-epidemic
China
Russia3,500
system,international borders were shut down, andJapan
South Korea
ThailandIndia
foreigners and overseas compatriots including
3,000
BrazilOthers
Korean nationals living in Japan were required to2,500
undergo a 30-day self-quarantine and forbidden to
2,000
go outside of embassies and hotels. The employees
1,500
of the Pyongyang Hotel, where many Korean
1,000
nationals living in Japan stay, were also required to500
undergo self-quarantine. Although service continued
0
at the hotel, the entire facility was closed off, turning
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
the place into one huge quarantine facility.
According to a March 9 report by ITAR-TASS, theSource: Ministry of Unification, South Korea, and Korea Trade and Investment Promotion Agency
Russian news agency, 80 people exasperated by thisstate of affairs, including German, French, Swiss,in December 1962, and chose to focus on economic development.
Polish, Rumanian, Mongolian and Egyptian diplomats, and people
However, there was no progress in US-North Korea relations despite
related to Russian humanitarian organizations and businesses
three US-North Korea summit meetings. Thus, at the 5th plenary“evacuated” on an Air Koryo flight from Pyongyang to Vladivostok
meeting of the 7th Central Committee of the Workers’ Party of Korea
that day. According to a May 28 Reuters report, the British Embassy
held from Dec. 28 to 31, 2019 in Pyongyang, Kim Jong Un, chairman
also temporarily suspended operations on May 27 and all diplomaticof the Workers’ Party of Korea, gave a report in which he stated that
staff members left North Korea and crossed the border into China by
good international economic relations will not be achieved and thatland.
North Korea would be forced to live under sanctions (http://www.
As for domestic residents, people returning from overseas
kcna.co.jp/item/2020/202001/news01/20200101-01ee.html). The
business trips and people coming into contact with them weredefiant decision was subsequently made to pursue the policy of
subjected to quarantine, medical observation, and other measures.
frontal breakthrough against sanctions and to focus on self-reliance
Beginning in the middle of February, disinfection and other measures
for the foreseeable future. However, the decision was also made towere taken on the subway, buses, and other transportation facilities
engage in economic reform even under such circumstances. Thus,
under the assumption that there may be coronavirus carriers on
the strange situation prevails that the orientation towards domestic
them. According to an April 3 KCNA report, the current national
economic reform has not disappeared even as there are no
emergency anti-epidemic system will be maintained until Covid-19 is
expectations for expanding international economic relations.
brought under control globally. The system remained in place as of
3,500(Unit: US$ million)

52 Japan SPOTLIGHT • November / December 2020

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Sept. 30. Classes opened in grade three in senior middle schools(the equivalent of Japanese senior high schools) and universities on
April 20 and in all other schools on June 3, according to reports bySouth Korea’s Yonhap News Agency.

Politicization of Anti-Epidemic Activities& Actual Danger
The Feb. 1 Rodong Sinmun editorial “Execute Undertaking toPrevent the New Type Coronavirus with High Intensity” (http://www.
kcna.co.jp/item/2020/202002/news01/20200201-02ee.html) argues
that the significance of the national emergency anti-epidemic systemis that it is for the protection of the people and a “manifestation of
the masses of the people-first politics”. It explains that undertaking
to prevent Covid-19 not only protects the people but “is an important
political project that protects the revolution, protects the safety of the
lives of the people, and enables the image of Korean-style socialism
to shine.” Preventing Covid-19 is perceived as an undertaking toenhance the image of the state and a good opportunity to display to
the world the superiority and power of the socialist system of North
Korea.
Given this line of thought, losing to Covid-19 in North Korea
means political defeat for the Workers’ Party of Korea and the North
Korean government, an unforgivable outcome. It is the prevailingview in Chinese discourse that the early containment of thecoronavirus is a demonstration of the capability of the party and thegovernment. Failure is even more unforgivable in North Korea than it
is in China.
A July 26 Rodong Sinmun report states that a resident who
defected from North Korea three years ago and returned to Kaesong
city after illegally crossing the demarcation line was suspected ofhaving been infected with the new coronavirus and that the Political
Bureau of the Central Committee of the Workers’ Party of Korea
convened an emergency enlarged meeting on July 25. Located 80
kilometers north of Seoul on the demarcation line, Kaesong is the
remotest location in the current political geography of North Korea
Photo 1: Author

The 9th Rason International Trade Fair, August 2019. Rason is a city near the borders with
China and Russia.

and unlikely to be a gateway for the coronavirus (the flow of people
being through the borders with China and Russia or by sea and air),
but was thrust to the anti-epidemic frontlines because of the
returning defector.
Nevertheless, a July 30 report in the Rodong Sinmun claimed that
there had still not been a single case of the new type coronavirus
infection in North Korea. On Aug. 13, the 16th meeting of the
Political Bureau of the 7th Central Committee of the Workers’ Partyof Korea decided to lift the lockdown of Kaesong, which had been inforce from July 24 (http://www.kcna.co.jp/item/2020/202008/
news14/20200814-02ee.html).
We cannot be sure that there are no cases of infection as North
Korea claims. However, since Kaesong in July had been the only city
under total lockdown, it is reasonable to assume that the situation isunder control. Infectious diseases for which there are a significant
number of cases in North Korea include tuberculosis (world ranking
eighth for infection ratio and third for fatality ratio at 80 deaths per
100,000 people, according to the World Health Organization),malaria (61st in incidence rate), and typhoid fever. Given the national
population, it can be deduced that approximately 20,000 people diedin 2018 of tuberculosis. The current best estimates of infection
fatality ratios were published on Sept. 10 by the Centers for Disease
Control and Prevention (CDC), a US agency. According to the CDC
study, with the basic reproduction number (R0) at 2.5, they were0.02% for 20-49 year-olds and 0.5% for 50-69 year-olds. Thismeans that the fatality ratio for the middle-aged and elderly for
Covid-19 is 6.25 times the ratio for tuberculosis but only one-fourthfor the 0-49 year-old age group (https://www.cdc.gov/
coronavirus/2019-ncov/hcp/planning-scenarios.html#table-1).
Covid-19 is not as dangerous as tuberculosis for North Korea, given
its relatively youthful demographics. Therefore, I believe that North
Korea maintains a rigorous anti-epidemic system to prevent the newcoronavirus from spreading not because many people are dying but
for prevention purposes or because of political motives including
social control.

Sudden Deterioration in North-South Relations
North Korea reacted negatively to the dispersion of anti-North
Korea leaflets along the demarcation line by defectors that had
escaped North Korea into South Korea. Kim Yo Jong, first vicedepartment director of the Central Committee of the Workers’ Partyof Korea, issued a statement on June 4, 2020 titled “Do Not InviteYour Own Misfortune” (http://www.kcna.co.jp/item/2020/202006/
news04/20200604-01ee.html), envisaging a deterioration in NorthSouth relations. At noon on June 9, the North-South communicationlines were shut down (http://www.kcna.co.jp/item/2020/202006/
news09/20200609-03ee.html). On June 12, Jang Kum Chol, directorof the United Front Department of the Central Committee of theWorkers’ Party of Korea, issued a statement (http://www.kcna.co.jp/
item/2020/202006/news12/20200612-16ee.html). The following day,
Kim Yo Jong issued another statement warning, “Before long, a
tragic scene of the useless north-south joint liaison office completely
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collapsed would be seen” (http://www.kcna.co.jp/item/2020/202006/
news13/20200613-09ee.html). Indeed, on June 16, the building in
the KIZ, in North Korean territory, in which the Joint Inter-Korean
Liaison Office was housed, was blown up. The following day, aspokesman for the General Staff of the Korean People’s Army (KPA)
announced military action plans that included the deployment of
troops to the KIZ and the Mount Kumgang Tourist Zone. On the sameday, Kim Yo Jong, first vice department director of the Central
Committee of the Workers’ Party of Korea, issued a statement inwhich she harshly criticized the June 15 speech given by President
Moon in commemoration of the 20th anniversary of the June 15
North-South Joint Declaration (https://english1.president.go.kr/
BriefingSpeeches/Speeches/839). In the statement, she repeated her
criticism of the South Korean government for allowing a group of
North Korean defectors to float anti-North Korea leaflets and statedthat “[It] is a tragedy produced by the persistent and deep-seatedpro-US flunkeyism and submission of the South Korean authorities
that the north-south ties [are] reduced into the plaything of the US”
and that “[It] is our fixed judgment that it is no longer possible todiscuss the north-south ties with such a servile partner engaging
only in disgrace and self-ruin, being soaked by deep-rooted
flunkeyism” (http://www.kcna.co.jp/item/2020/202006/
news17/20200617-07ee.html), intimating the complete
abandonment of the substance of the agreement reached at the 5thinter-Korean summit held in September 2018 during Moon’s visit toPyongyang and Mount Paektu. However, this plan was put on hold at
the preparatory meeting for the 5th meeting of the 7th Central
Military Commission of the Central Committee of the Workers’ Partyof Korea and was not mentioned in reports on the 5th meeting(expanded meeting) itself, which was held on July 18.
The immediate causes of these actions by North Korea were most
likely the over-the-top content of the leaflets as well as the mounting
anger towards South Korea’s apparent lack of enthusiasm insecuring the consent of the US for sanctions relief as part of theimplementation of the agreed points at the 5th inter-Korean summit.
However, it is necessary to keep in mind that it is also a reiteration of
the North Korean intent to control the pace of the normalization of
North-South relations, since rapid improvement could be a threat toits political system.

Pursuing Procedural Justice Under Predicament
It was announced at the 6th plenary meeting of the 7th Central
Committee of the Workers’ Party of Korea on Aug.19, 2020 that the
8th Congress of the Workers’ Party of Korea would be held inJanuary 2021, where the five-year strategy for the national economic
development for 2016-2020 would be evaluated and a new five-year
economic development plan announced (http://www.kcna.co.jp/
item/2020/202008/news20/20200820-01ee.html). It was indicatedthat the goals of the ongoing five-year plan would not be met. In thepast, a party congress would not have been held if there had been no
positive results for the occasion. The fact that it would be held at the
five-year interval customary since the Kim Il Sung regime even after
54 Japan SPOTLIGHT • November / December 2020

Photo 2: Author

Local residents sea bathing in Kyongsong County, North Hamgyong Province, in August 2019

announcing that the ongoing plan would go unfulfilled is a majordifference between the Kim Jong Il and Kim Jong Un regimes, even if
the impact of the sanctions and the coronavirus is taken into
consideration. The Kim Jong Un regime is more mindful ofprocedural justice and appears in a sense to be trying to make North
Korea a “normal country”.
The year 2020 has seen a growing number of state media reports
regarding important meetings of the Worker’s Party of Korea and theNorth Korean government. The discussions at these meetings showthat the orientation towards an emphasis on the economy has notbeen abandoned; moreover, there is an emphasis on the need forreform. The orientation of the Kim Jong Un regime towards reform
shows no sign of deterioration.

Conclusion
In the announcement at the 6th plenary meeting of the 7th Central
Committee of the Workers’ Party of Korea on the 8th Congress of theWorkers’ Party of Korea, the fundamental orientation towards anemphasis on the economy has not been abandoned.
North Korea will digest the outcome of the US presidential electionin November, conduct backstage negotiations with the US, andcoordinate with China and take the occasion of the 8th Congress to
put forward its strategy for dealing with the US under a newly
mandated administration.

Dr. Mitsuhiro Mimura is a senior research fellow at the Economic ResearchInstitute for Northeast Asia. A graduate of the Korean Language Department in
the Faculty of Foreign Studies at Osaka University of Foreign Studies and of the
Graduate School of Law at Osaka University, he specializes in North Korean law
and economy, and Northeast Asia economic cooperation.