North Korea’s economy is suffering its worst decline in 20 years, according to figures released Friday — a result of the biting sanctions slapped on the regime in recent years for its nuclear and ballistic weapons tests.
In response, North Korean leader Kim Jong Un has been visiting factories, berating officials, and cozying up to China in the hope that Beijing can help ease sanctions.
The figures, released by the Bank Of Korea, shows in North Korea gross domestic product (GDP) fell 3.5 percent in 2017 compared to the previous year. This marks the sharpest decline since the regime suffered a 6.5 percent drop in 1997 as a result of a devastating famine.
The pain of western sanctions have been exacerbated by North Korea’s closest trading ally China more strictly enforcing economic measures against the regime in the second half of 2017 following pressure from the United Nations.
The worst hit sector was industrial production, which accounts for about a third of the nation’s total output. It dropped by 8.5 percent, according to the Bank of Korea, as factory production collapsed because Pyongyang was unable to secure enough oil, coal and gas.
Output from agriculture and construction industries also fell by 1.3 percent and 4.4 percent respectively.
It appears Kim was aware of his country’s economic decline before the release of the statistics.
The despot last week was seen visiting industrial facilities, power plants and tourist sites across the country — shifting focus from the regime’s nuclear arsenal to its economy.
According to the state-run KCNA news agency, Kim voiced his ”great anxiety” about poor standards and failing to meet targets, while dressing down ruling party officials for their lack of “revolutionary spirit.”
At the Chongjin Bag Factory, located in the same region as a nuclear test site, which the regime blew up in May, Kim ordered workers to sew twice as much sponge in the shoulder straps to prevent schoolchildren feeling any discomfort.
In Younjin, Kim visited a seaside hotel and asked why the facility remained unfinished six years after construction began. Even worse, at the Orangchon power station he berated officials for failing to complete construction a full 17 years after it began, saying it “doesn’t make sense.”
Wang Enbin, the deputy director of the department of commerce in China’s Liaoning province, which borders North Korea, said this week he was keen for the two countries to work together as soon as possible.
Kim’s focus on the economy is positive for the U.S., giving Washington leverage as it pushes to enforce the Singapore declaration in which North Korea promises to work towards denuclearization.
“It’s clear from KCNA and government statements, that Kim is serious about putting economic growth at the top of his agenda,” John Hemmings, Asia Director at the Henry Jackson Society, a British foreign policy think tank, told VICE News.
“This gives the U.S. some leverage in offering that in exchange for [denuclearisation], however Kim’s goal will be to try and get economic growth ahead of and separately from denuclearisation, so we can expect to see him weakening the international coalition against him and emphasising the humanitarian impact of sanctions.”
While sanctions are biting hard in North Korea, Kim’s efforts to cozy up to China may be a deliberate ploy to use the current unease between Beijing and Washington over trade to gain sanctions relief.
“Given its current trade war with the Trump administration, there’s a danger that Beijing will loosen sanctions on North Korea in order to leverage its fight with Washington on trade,” Hemmings said.
Cover image: North Korean leader Kim Jong Un gives field guidance during his visit to the under construction Orangchon Power Station in this undated photo released by North Korea's Korean Central News Agency in Pyongyang July 17, 2018. (KCNA via REUTERS)