N. Korea may resort to unofficial markets amid virus-hit economy: expert

NK economy-expert

By Yi Wonju
   SEOUL, Jan. 29 (Yonhap) — North Korea’s fiscal status has rapidly worsened due to the shutdown of borders over coronavirus concerns, leaving the communist country with no choice but to consider resorting to unofficial markets, a researcher said Friday.

   Lee Jong-kyu, a senior research at the state-run Korea Development Institute (KDI), made the case in a report published by the think tank, saying the North is likely to be considering utilizing local markets known as “jangmadang.”
   “North Korea’s finance and policy actions that had barely managed to withstand the harsh sanctions placed on the North is facing an inflection point this year,” Lee said in the report.

   Lee stressed that the North’s exports to China fell sharply after the shutdown of its borders last year, accounting for a merely 21 percent of exports the previous year.

   The North is thus likely to be left with no choice but to resort to unauthorized local markets, he said.

   “The North is likely to be at a crossroads between easing regulations for its unofficial market to secure national revenue or pressure economic agencies to secure national revenue,” he said.

    At its rubber-stamp Supreme People’s Assembly (SPA) meeting earlier this month, the North decided to raise its total state budget expenditures on-year by a mere 1.1 percent, marking the lowest rate of increase since North Korean leader Kim Jong-un took power.

   The total expected revenue also rose by a mere 0.9 percent on-year, marking the lowest increase to date under the current leader.

   The North appears to have approved only a slight increase in its budget this year amid multiple challenges, including its ongoing antivirus campaign, devastation caused by typhoons and economic woes from global sanctions.

   Pyongyang claims to be coronavirus-free, but it has taken relatively swift and drastic antivirus measures since early last year, including sealing its borders and imposing strict restrictions on movement.’

A picture of the Friendship Bridge linking North Korea and China (Yonhap)

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