Archive for December, 2023

The North Korean Economy in 2023–2024: Still Backing into the Future

Wednesday, December 27th, 2023

By: Benjamin Katzeff Silberstein

Where does the North Korean economy stand, and where is it going? Kim Jong Un spent some of the last few days of 2023 at the 9th Plenary Meeting of the 8th Worker’s Party Central Committee that was held in Pyongyang. The meeting notes published by KCNA serve as a good guide to the economic and political priorities of the regime as well as its assessment of the year that passed.

Overall, Kim Jong Un appears to be moving closer to accomplishing his vision of a tightly state-directed and overseen economic system, with some flexibility for the actors within it. We have seen over the past few years how the state has proclaimed its ambition to control and oversee the economy much more closely, with examples now abounding of this playing out in practice, from the piecemeal trade opening post-Covid-19 essentially amounting to a state ban on private actors in foreign trade, to measures like a recent reregistration campaign for businesses in an effort to more closely oversee what goes on in the economy and extract rents and taxes. Kim Jong Un intends to put a stop to the economic anarchy that has plagued major aspects of the North Korean economy since the famine and subsequent marketization. Full central planning is not the goal, but the tighter screws on the economy can still make much damage in suppressing trade, investment, and initiative. They likely already are.

Although it makes for gloomy prospects, this is in line with Kim’s policy aspirations. All in all, 2023 is arguably the first year since the start of the pandemic where some sort of progress has been made in the economy, but it isn’t much. This year’s harvest was, as the plenum summary notes, not just good but significantly better than last year’s. The plenum summary credits this to investments in expanding irrigation systems:

On the agricultural front, the dominant height for national economic development, the huge annual irrigation construction target decisive of substantial and profitable development was fulfilled ahead of schedule and a rare harvest was achieved. And the successes on 12 major goals were made one after another.”

Though this may certainly have played a role (if these investments occurred on a significant scale), luck with good weather is the main explanation. As a USDA projection states,

This year’s growing season began with beneficial soil moisture conditions, and the rainfall outlook continued to be above average providing favorable conditions for planting, crop establishment, and reproduction during May to early August. The conditions have continued to raise yield expectations from average to above-average especially for the major, summer-grown food security crops of corn and rice.”

This positive assessment of base conditions also bears out in the market price data, where lower rice prices suggests a greater availability of rice. However, this is not an achievement by the state, rather mostly a work of luck and chance.

The fact that a stabile harvest is such a success itself points to the rough state of the economy and its dim prospects. A good harvest absent systemic reforms is rarely a political achievement. On the international arena, the regime has been backing into the future by moving closer to both Russia and China while closing embassies on a large scale in other countries. As the world moves toward a world order more resembling the Cold War, North Korea is going back to its roots as well. What’s happening in the domestic economy seems to be mimicking and following along with this dynamic. The focus on the plenum on mere manufacturing capabilities, mostly within North Korea’s traditionally emphasized heavy industries, also points to a move backwards, to an economy much more in line with North Korean tradition, perhaps as a significant future weapons manufacturer for the emerging anti-American world bloc. For the North Korean population, hoping and expecting more marketization and a higher quality of life, this is unlikely to be good news in the long run.

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Why is China cracking down on illegal fishing in North Korea?

Monday, December 11th, 2023

By Benjamin Katzeff Silberstein

Daily NK has reported on several occasions on Chinese fishing activities in North Korean waters. Chinese fishers purchase fishing rights from the North Korean government, a practice clearly banned under the current sanctions regime. China has been cracking down on this over the past few months and on sales of seafood from North Korea overall, according to the outlet:

The Chinese government has recently stepped up surveillance and inspections of ships passing through North Korean waters and has even started to crackdown on the sale of North Korean seafood in the country’s markets, Daily NK has learned.

Speaking on condition of anonymity for security reasons, a source in China told Daily NK on Dec. 5 that the Chinese authorities are requiring all ships approaching North Korean waters be equipped with GPS, automatic identification systems, and other navigation and communication devices in order to report their location.

The authorities are doing this to determine where ships have been and for how long, as well as to investigate what ships were doing in North Korean waters. If they confirm that a vessel was fishing in North Korean waters, they confiscate all the seafood the ship has caught.

Accordingly, Chinese vessels that used to fish in North Korean waters are taking a major hit. The source said a fishing boat that recently tried to bring into China clams caught in North Korea is faced with having to pay hundreds of thousands of yuan in fines.

Now forced to pay large fines if caught, Chinese fishery operators say an investigation in their activities might even put them out of business.

[…]

Chinese authorities are also cracking down on sales of North Korean seafood in markets near the North Korea-China border. North Korean seafood exports are banned under UN Security Council Resolution 2371.

Previously, Chinese authorities did not go out of their way to stop Chinese nationals from importing and selling North Korean seafood, but crackdowns have been intensifying recently.

In fact, Chinese businesspeople used to sell North Korean seafood openly due to its popularity, but they do not now because inspection teams are checking the origins of the products they sell.

In regards to this situation, Chinese fishery operators and North Korean seafood sellers say the United States is putting pressure on China to enforce sanctions on North Korea, or that the authorities are cracking down because “China must follow international law for it to play its role in the international community.”

The article cites China’s ambition to appear a responsible actor in the international system in order to exert influence on the current events in Gaza as the reason for its crackdowns on this practice. I’m somewhat skeptical to this explanation. Although it might play a role, I suspect that a more basic ambition to uphold the rules and laws of the region may be what’s behind the Chinese crackdown. In any event, it is a very interesting data point, especially in a time when it’s been assumed that China’s sanctions enforcement would be very lax due to US-China tensions.

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