Epidemic threatens N. Korea's economic lifelines

SEOUL • North Korea's already tenuous economic lifelines to the outside world are now nearly severed as it seals its borders with China and Russia to prevent the spread of the coronavirus.

It has stopped air and train services, set up weeks-long quarantines for recently arrived foreigners, suspended international tour-ism and imposed a near-complete lockdown on cross-border travel.

All this could hurt leader Kim Jong Un's efforts to make good on his promise to jumpstart the economy. Those efforts have been undermined by a lack of progress in denuclearisation talks with the United States, which has led the way in imposing international sanctions on North Korea.

"They're keeping the cargo and the Chinese out; nobody can go in or out," said a source with first-hand knowledge of the situation at the China-North Korea border.

Ms Kang Mi-jin, a North Korean defector in Seoul who reports for the Daily NK website, said the border appears to have been almost entirely shut down since at least Jan 30. "The Ministry of People's Armed Forces ordered all guard posts to bar smuggling as well. People, freight, nothing can come in or go out," she said.

Pyongyang has reportedly asked Beijing not to repatriate North Korean defectors detained in China, according to a South Korean pastor who works with refugees.

The source with knowledge of the situation at the border said North Koreans who work in restaurants and elsewhere in China, violating United Nations sanctions, are in "virtual captivity" at home under instructions from the North's authorities.

North Korea is adept at implementing public health interventions, but sanction restrictions could make it difficult for it to get medical supplies, said Harvard Medical School's Dr Kee Park.

"Their actions, very costly in terms of revenue from tourists and trade as well as administratively for quarantining people, reflect their concerns regarding their health system's capacity to handle an outbreak," he said.

The efforts appear to have been successful in preventing virus cases in North Korea so far.

"There could be a huge impact not just on the North's market economy, but also on its entire economy," Ms Kang said. "North Korea promotes localisation, but even for products - candies, crackers or clothing - manufactured in the country, the raw materials come from China."

There are signs that prevention measures could lead to the cancellation of military parades and other mass celebrations at least through this month, including a commemoration of the North Korean army and former leader Kim Jong Il's birthday.

The extent of the economic risk largely depends on the duration of the lockdown and how sweeping the restrictions are, said Professor Artyom Lukin of the Far Eastern Federal University in Vladivostok. "If the lockdown continues for several months and longer, this will certainly have a considerable negative impact on North Korea."

There are no official numbers on the size of North Korea's economy, but South Korea's Bank of Korea estimated the North's economy shrank in 2018 for a second straight year and its international trade fell 48.4 per cent in value.

Since then, China and Russia have called more publicly for sanctions to be lifted. Border trade picked up and there were signs that North Korea's economy may have been on a relative rebound.

A recent report by a South Korean trade association found China's proportion of the North's overall external trade rose to 91.8 per cent last year, compared with 17.3 per cent in 2001. Thousands of Chinese tourists provided an additional economic lifeline.

The coronavirus crisis could weaken the North's position in its stand-off with the US over denuclearisation talks and could lead Pyongyang to try to offset its economic vulnerability by resuming long-range missile launches or nuclear tests, Prof Lukin said.

"If the coronavirus situation is not resolved quickly, it is going to make life much more difficult for North Korea in 2020."

REUTERS

A version of this article appeared in the print edition of The Straits Times on February 05, 2020, with the headline 'Epidemic threatens N. Korea's economic lifelines'. Print Edition | Subscribe