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After months of questioning over the economic impact of international sanctions against North Korea, major capitals now have proof of the effectiveness of their Pyongyang smothering strategy.
Every year trying to badess the size of the North Korean gross domestic product by compiling data retrieved by intelligence agencies, the South Korean central bank (BoK) revealed on Friday that the economy of the country's hermit had probably its GDP has declined by 3.5% to that of South Korea. We must go back to 1997 to find a contraction even more brutal (-6.5%).
The effectiveness of the new sanctions
This decline contrasts with the surge of 3.9% measured in 2016 before the introduction of new sanctions against North Korean economic and financial interests. Hoping to force Kim Jong-un's regime to stop its ballistic and nuclear tests and trigger a denuclearization of its military arsenal, the United States convinced, in the second half of 2017, the UN Security Council to vote several resolutions punishing Pyongyang and its leaders
Long very tolerant with the dictatorship, Russia and China had supported this hardening. The BoK's statistics confirm that they have more conscientiously applied the sanctions.
North Korean exports fell by 37.2% year-on-year in 2017 after the Chinese border closed to deliveries of goods and minerals from the North. Exports of animal products, mainly seafood, fell by 16% when shipments of mineral products (coal) dipped by 55.7%. At the same time, the North slightly increased its imports (1.9%) due to an increase in orders of textile products not affected by the sanctions and chemical components.
Private foreign trade, Pyongyang also had to cash, last year, a severe drought that weighed on its agricultural production and energy sector. "The production of electricity has decreased because of a lower production of the hydroelectric sector," says the Bank of Korea. These energy problems will have further complicated the activity in many industries already lacking raw materials or modern infrastructure. State companies in the chemical sector have conceded a decline in activity.
These new statistics should rebadure the supporters of a hard line against Pyongyang. In recent months, they have struggled to measure the effect of sanctions on the North and have even been surprised by the publication of data showing the maintenance of a certain dynamism in the North.
Towards a loosening
Experts had been, for example, dismayed by the recent stability of gas prices in the country. These prices, they thought, would theoretically have flown, after the drastic drop in shipments of refined products organized by China, the major supplier of the North. Contrary to their forecasts, NK Pro's statistics pointed to a decrease in pump prices in Pyongyang and some of the country's major cities in early July. progressively loosening around North Korea. After rigorously enforcing UN resolutions for a few months, Beijing would have been satisfied with some of Pyongyang's appeasement gestures, such as the suspension of nuclear and ballistic tests or Kim Jong-un's multiple visits to China, and would have decided to release the pressure on his little partner.
In the midst of a trade dispute with Washington, Xi Jinping would not have much interest in helping Donald Trump advance his strategic agenda on the Korean peninsula.
After a difficult 2017, North Korea could hope for a stabilization of its GDP in 2018 if China, which sees 95% of the foreign trade of the North, turns a blind eye to a resumption of trade on its border.
Pyongyang can also count on the solidarity of Russia which has In recent months, it has continued to tolerate the smuggling of goods through its land border or some of its ports. The South Korean government announced this week that it had launched an investigation into the arrival of 9,000 tons of North Korean coal on its markets. The coal had been delivered illegally to the South by ships from Panama and Sierra Leone that had recovered it in the Russian port of Khomlsk.
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