Opinion - The Korea Times

North Korea's foreign trade

By Andrei LankovRecent economic sanctions created serious problems with exports of minerals from North Korea. Technically UN member countries are banned from importing North Korea minerals even though in practice it remains to be seen to what extent this ban will be observed by China. Nonetheless, there is no doubt that the share of minerals of North Korea exports currently close to 60% will drop soon. The North Korean foreign trade managers will have no choice but to look for different ways to earn foreign currency.Actually, the changes have already begun. And it seems that there are three fields where North Korean companies (often semi-private in nature) are likely to earn an extra buck. First, broadly speaking, fishing, and seafood production; second, the “sale” of North Korean workforces overseas; third, its developing light industry serving orders from China. Seafood has always been a major North Korea export. In the 1990s, before coal and iron ore took over around 2005, it was the largest export item. Most of the seafood was sold to China, whose huge

Jul 24, 2016By Andrei Lankov

Andrei Lankov

King coal

By Andrei Lankov Recent UN sanctions that have put so much emphasis on mineral exports from North Korea have unavoidably attracted much attention to exports of North Korean coal to China.Indeed, coal shipments to China which were almost unnoticeable as late as 2000, currently constitute roughly 40% of all North Korean exports as reconstructed through the statistics of North Korea’s trade partners (actual share is liable to be somewhat lower, since not all North Korean trade deals are counted). Because prices have been falling on international markets, the share of exports also began to slide in recent years, but still remain high.However, the measure of commotion that followed China’s decision to enforce a partial ban (for the time being, at least) on North Korean coal attracted attention to something that many observers had speculated about: the essentially private nature of some mining enterprises that sell their coal to China.Indeed, the growth of the semi-legal private economy began in North Korea in the early 1990s and by the early 2000s it reached a point

Jul 10, 2016By Andrei Lankov

Andrei Lankov

Snail trail

By Andrei Lankov Communist countries loved their railways. Compared with market economies of roughly similar size, the communist bloc countries paid much more attention to their railway networks, often at the expense of motorways and other means of transportation.This affinity for rail can be explained by a number of factors: to an extent, it can be explained by the great impact the ideas from the late 19th century had on communist decision makers. For them, industrial power was expressed, above all, in terms of steel produced and tons of coal dug up. On the other hand, such an emphasis on railways might be related to a certain ingrained distrust of individual car ownership and, more broadly speaking, less controllable and more flexible automotive transportation.However, special emphasis on railways in the Communist Bloc countries did not prevent their gradual stagnation. By the 1970s, the Communist countries’ railways began to resemble living history museums. Perhaps, nowhere else in the world was this tendency more pronounced than in North Korea.When North Korea bec

Jun 26, 2016By Andrei Lankov

Andrei Lankov

China and NK: back to square one

By Andrei LankovFor a brief while, South Korean diplomats were in a rather celebratory mood: it looked like China, for a change, had joined the ROK and the U.S. in their efforts to subject North Korea to the toughest sanctions ever. Indeed, in early March the Chinese representative in the U.N. Security Council voted for Resolution 2270 which introduced such measures, and for a while the united front looked like a reality.Frankly, for yours truly, it was a surprise: the harsh position Beijing had seemingly committed itself to was unprecedented, and China’s switch happened quite suddenly. However, now it seems that this change was merely a short-term fluctuation.There are many signs of a warming of relations between China and North Korea. In early June, Ri Su-yong, the former North Korean foreign minister who currently is the Korean Workers’ Party vice-chairman responsible for foreign relations, visited Beijing. It is the first time since 2013 that a North Korean official of such high rank has appeared in the Chinese capital. Among other things, Ri was granted an audience w

Jun 12, 2016By Andrei Lankov

Andrei Lankov

Sanctions working? Not yet...

By Lankov AndreiOn the March 5, the U.N. Security Council introduced new sanctions targeting North Korea. Although they have some loopholes, they are much tougher than any previous sanctions. They might be the first sanctions to create real economic trouble in North Korea. The question is, will they?Sanctions are manifold, but the single most important item is the ban on exporting North Korean mineral resources that all U.N. member states are expected to abide by. Resolution 2270 unconditionally bans exports of titanium and vanadium ores, as well as rare earth minerals and gold. Importing North Korean coal and iron ore is also theoretically banned, but with some caveats that leave the issue essentially at the discretion of the buyer.In the past, we have seen many times when the introduction of a new set of sanctions has been followed by optimistic predictions from hardliners asserting that ‘sanctions would soon start to bite’. The belief was that with sanctions hurting, North Korea would mend its unruly ways. Thus far, such predictions have never been confirmed, but this

May 29, 2016By Lankov Andrei

Andrei Lankov

Workers' Party Congress: much ado about (almost) nothing?

By Andrei Lankov For a few months, North Korea watchers and media have been actively discussing the then-coming Seventh Congress of the Korean Workers’ Party. It was not uncommon to hear that this Congress would become a major turning point, where Kim Jong-un would declare dramatic policy changes and perhaps embark on a wave of radical social and economic reforms. However, nothing like that happened. The Seventh Congress turned out to be what such pompous events have usually been ― a boring exercise in self-congratulation, full of eulogies to the Kim Family, but little of any lasting substance. Perhaps, one should not be surprised by this: a brief look at communist bloc history easily confirms that party congresses are grossly overstated events whose actual political impact has always been quite small. With few rare exceptions congress of the Leninist parties in the communist blocs have never been places where new policies are first formulated. At best, such large gatherings merely rubber-stamped existing policy changes, thus giving them a measure of ad

May 15, 2016By Andrei Lankov

Workers' Party Congress: much ado about (almost) nothing?

Andrei Lankov

The Parks, a Pyongyang success story

By Andrei Lankov Ms. Park (not her real name) was born in the late 1960s and by birthright she belongs to the North Korean aristocracy. All her grandparents were, to some degree, involved in the anti-Japanese guerilla resistance, and one of them even had close personal connections to Kim Il-sung in his early days fighting the Japanese in the wilderness of Manchuria. Ms. Park’s father was a high-level official, for security reasons we cannot go into much detail, but suffice it to say, he was in the top 1,000 (probably top 500) bureaucrats in the country.Ms. Park’s youth coincided with the late 1980s, the Indian summer of the Kim Il-sung regime. At that time, the economy was stagnating, but the old system was still basically functional. Thus, in her teen and college years, Ms. Park enjoyed a fairly typical existence for North Korea’s top officialdom.In those days, the rich and powerful in North Korea almost exclusively came from the top party, state and military elite. Things have gotten far more complicated since then due to the emergence of an (quasi) independe

May 1, 2016By Andrei Lankov

Andrei Lankov

NK's founding father, Kim Il-sung

By Andrei Lankov On the 15th of April, North Korea had lavish celebrations for Kim Il Sung’s birthday, officially known as “Day of the Sun”. These celebrations can be seen as an embodiment of the personality cult going mad, but one should not think that all this official pomp is completely fake. For many North Koreans the founding father of their state is, indeed, a person worthy of respect. It is not incidental that polls confirm that the late Generalissimo and Sun of the Nation still enjoys much support among his former subjects and even among defectors.Why do North Koreans tend to love the long-deceased dictator? One can argue that his popularity is based to a large extent on outright lies, misinterpretations, and myths – but does it really matter? After all, the same can be said about many other historical figures that are widely admired across the world.To start with, Kim Il Sung is seen as an authentic hero of the anti-Japanese resistance, the proud symbol of Korean nationalism. This reputation is much exaggerated, but not completely unfounded.Kim I

Apr 17, 2016By Andrei Lankov

Andrei Lankov

North Korea's lords of coal

By Andrei Lankov Resolution 2270, which the U.N. Security Council adopted on March 2, introduced many restrictions on the export of North Korean coal. Admittedly, the resolution is also equipped with several remarkably large loopholes that mean that exports can continue come what may. It is nonetheless interesting that this news produced much in the way of noise about the threat it poses to top policy makers in Pyongyang and the tonju (literally “lords of money”).The latter group is not supposed to exist in North Korea, but it does, and is remarkably powerful. These “lords of money” are actually rich entrepreneurs and investors who are running large private businesses. The operational capital of these people nowadays is counted in the hundreds of thousands of dollars.Many may be surprised by this because the world media tend to repeat the outdated description of North Korea being the last redoubt of “Stalinism.” Indeed, in a Stalinist country, private businesses (let alone large private businesses) are not supposed to exist. But the “lor

Apr 3, 2016By Andrei Lankov

Andrei Lankov

China holds keys to N. Korea's future

By Andrei Lankov On March 2, the U.N. Security Council passed a resolution that introduces new sanctions against North Korea. Resolution 2270 is by no means the first document of this kind: every new nuclear test resulted in yet another U.N. resolution and set of sanctions.However, Resolution 2270 is unusually tough. It might be the first time the U.N. Security Council has introduced measures that can hit the North Korean economy really hard.The resolution itself envisions several bans (on top of the bans that were introduced earlier), but two bans are of special significance. First, it unconditionally bans North Korean exports of gold, vanadium and titanium ores and rare earths minerals. Second, the resolution bans the export of iron ore and coal as well, but this ban is conditional: according to the article 29(b), the coal and iron ore can be exported for purposes unrelated to the nuclear and missile program.Apart from Resolution 2270, South Korea and the United States undertook unilateral measures. South Korea closed the Gaeseong industrial zone that brought up to $100 millio

Mar 20, 2016By Andrei Lankov

Andrei Lankov

Read more

North Korea's foreign trade

King coal

Snail trail

China and NK: back to square one

Sanctions working? Not yet...

Workers' Party Congress: much ado about (almost) nothing?

The Parks, a Pyongyang success story

NK's founding father, Kim Il-sung

North Korea's lords of coal

China holds keys to N. Korea's future

Top 5 stories