North Korean Economy After Covid-19 and its Prospects

Eun-ju Choi

ej0717@sejong.org

Research Fellow

The Sejong Institute

❍ Regarding North Korean sanctions since 2020, COVID-19 and natural disasters caused triple distress, hence, raising the possibility of humanitarian problems

  - Amid a sharp drop in North Korean trade, mainly exports, due to strengthened sanctions against North Korea since 2017, the impact from the foreign trade sector intensified due to border blockade in the face of the COVID-19 pandemic in 2020

    - Understanding the situation of the North Korean economy in the four years since the triple distress is a factor to consider in predicting North Korea's future choices

❍ Amid the economic shock of North Korea, North Korea has strengthened its stance on stabilizing people's livelihoods and Self-reliance, while promoting countermeasures to prevent existing problems from worsening

   - Expect back-chain effects by raising policies to improve durability, and minimize external shocks by focusing capabilities on core industries

   - Parenting policies and regional development strategies are proposed as a response to the problems of residents' lives in vulnerable and underdeveloped areas that are exposed to relatively increased economic shocks

❍ Although the fiscal contraction continues against the economic management, it is difficult to identify signs of a serious economic crisis as it does not lead to an energy and food crisis

- Difficulties in economic management are intensifying, such as a sharp decline of foreign trade, a halt in the utilizing the government's finances, and an increase in the burden of raising funds to strengthen the ability to respond to health crises and natural disasters, but they do not turn into a crisis like the past as they prioritize urgent issues such as food and energy supply

❍ From around 2022, North Korea is expected to seek to change its economic situation by strengthening relations and economic exchanges with China and Russia while meeting the economic demand facing the gradual resumption of foreign trade, expecting to escape from the worsened situation since the last 4 years but will be hard to make a notable progress in economic situation.​