North Korean economy under threat as country celebrates foundation day
Today, North Koreans celebrate Foundation Day. Pyongyang may ring in the country’s 69th birthday with yet another missile test, overshadowing economic progress.
Though North Korea is still wracked by poverty and starvation, the country’s economy grew by 3.9% in 2016, according to South Korea’s central bank, the highest growth rate the North has seen in over a decade. This is largely due to the expansion of private enterprise, which has been encouraged by Kim Jong Un’s allowing nearly 400 new markets during his reign. Regardless, it is the black market that accounts for most North Koreans’ personal prosperity, generating between 70% and 90% of personal income.
Pyongyang may be jeopardising these developments through its aggressive posture. UNSC sanctions are set to cut export revenue by a third. Further measures, which are almost certain if Mr Kim continues his missile tests, could range from a textile import ban to more extreme and unlikely measures, like cutting off North Korea’s oil supply. If closer scrutiny is applied to countries supplying the black market’s goods, either voluntarily or through “secondary sanctions”, this vital sector could take a serious blow.
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