By: Benjamin Katzeff Silberstein
Readers of this blog know that market prices have risen over the past few weeks, largely as a result of North Korea’s anti-COVID19-measures. Over the past few weeks, however, other signs than market prices have surfaced that the economic situation may be getting more difficult, unrelated to Kim Jong-un’s health situation.
- On April 17th, the Cabinet and WPK Central Committee reportedly announced a ban of all non-essential imports. The reason, ostensibly, is anti-COVID19-protections. One can also imagine it has to do with keeping the country’s hard currency base in place.
- This measure, and perhaps combined with the overall mood, led to panic buying of import products in Pyongyang shops.
- Prices on imported goods have increased drastically, Daily NK reports, with the price of imported soybean oil going from 45 RMB to 100 RMB for 5kg.
- We should also view the issue of the public bonds in this context. In mid-April, the state issued public bonds which it ordered the bureau in charge of constructing the Pyongyang General Hospital to use to pay suppliers. This may be a sign that the state lacks cash of its own to fund the project, and it may expand the bonds issuing program. Moreover, the state may require entrepreneurs to purchase them. If the state begins exerting pressure on economic actors to purchase these bonds, such policies could become measures to essentially confiscate the assets of private economic actors, because the state lacks funds of its own.
Lots of uncertainties as always, but these trends are well-worth keeping an eye on.View Original Article