What is the DPRK’s strategy for international economic integration?

Although removal from the US list of state sponsors of terror carries little economic significance for the DPRK, its government has made this one of its top policy priorities.  Now that this has been accomplished, we must ask what the DPRK’s next move is in terms of international economic integration.  Will they push for removal of more economically-significant legal barriers which isolate them, to a large degree, from global markets (indicating reform is an important policy goal), or will we continue to see mixed signals and muddle-through policies (indicating a desire to maintain the status quo)? 

We cannot answer this question without knowing the DPRK’s overall strategy.  Today, however, a North Korean academic quoted in the Japanese media acknowledges that de-listing changes little economically, and signals that we should not expect to see much change in the DPRK’s economic environment:

Ri Gi Song, professor at North Korea’s Academy of Social Sciences, told Kyodo News in an interview that other international sanctions are still in place and “there should be no illusions” about the country’s trade environment.

“The delisting from the terror list is expected to have a certain level of beneficial impact, but this does not mean that all (international) economic restrictions have been taken away,” he said.

Ri also said Japan’s sanctions against North Korea have not had a major impact on the country’s economy but are hurting Korean residents of Japan who do business with North Korea.

“There is little impact from these restrictions on the economic development of the country, but I think there is an impact on businessmen of Chongryon,” he said, referring to the pro-Pyongyang General Association of Korean Residents in Japan.

“The Korean residents of Japan cannot come and go as they please,” Ri said.

Japan’s sanctions include a ban on port calls by North Korean vessels including a cargo-passenger ferry that provided a major means of transportation for Koreans in Japan traveling to North Korea. The sanctions also ban imports from North Korea and exports of luxury goods to the country.

The sanctions were first imposed in 2006 in the wake of an impasse in the issue of past abductions of Japanese nationals by North Korea. The sanctions are subject to review every six months and were extended in October for the fourth time.

Ri said he does not think North Korea’s centrally planned economy will be affected by the current global financial turmoil that began with the U.S. subprime mortgage meltdown.

“I don’t think it will have a direct impact on our economy, as our economy is not part of the capitalist market mechanism,” he said. (Kyodo – link requires subscription)

As an aside, Mr. [Dr.?] Ri might be surprised to learn just how exposed his country is to the “capitalist market mechanism”.

(Hat tip to Oliver for the article)

The full article can be read here:
N Korea Trade To Gain From U.S. Terror Delisting: N Korea Expert
Kyodo (subscription required)


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