The possibly dangerous direction of North Korean economic policy

By: Benjamin Katzeff Silberstein

The North Korean economy really do seem to be going from bad to worse. I was slightly optimistic at the beginning of the year that trade with China (and to an increasing extent Russia) would move back toward its pre-Covid-normal or even increase given international tensions.

But what if the state simply doesn’t want that to happen? We’ve seen a clear retrenchment in overall economic policy, and the state has centralized foreign trade. But what if it wants to lower foreign trade overall? Self-reliance, after all, remains the core ideology.

This recent report from Daily NK sources in Yanggang seems to suggest as much, where trade cadres have been told off by the Party for pushing for too much for trade to scale up. Sounds to me like they’re just doing their jobs.

This hasn’t been confirmed as a broader policy, and we need much, much more information to say anything concrete. But the report is an interesting data point and a worrying one. Even more retrenchment from global trade would be potentially disastrous for the population.

It is of course possible that the report only represents a specific instance and has more to do with internal political or financial feuds than with anti-trade sentiments. All this is more speculative than predictive.

But, I do think we need a broader, and perhaps more speculative debate, on worst-case-scenarios inside North Korea. I don’t think we’re near 1990s-levels yet, but the economy is incredibly fragile to begin with and policies right now seem both messy and dangerous.

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