Background
North Korea has been subject to economic sanctions for many years following its nuclear ballistic missile tests and refusal to comply with international disarmament and non-proliferation treaties. The United Nations Security Council had imposed a series of extensive sanctions to dissuade its nuclear program since 2006. In August 2017, the Security Council unanimously passed the 8th round of United Nations sanctions which further tightened the existing economic sanctions on North Korea.
Imposition Of Sanctions
The economic sanctions on North Korea seek to target its external sources of revenue and resources and restrict North Korea’s ongoing nuclear, ballistic missile and other weapons of mass destruction programs. The outcomes of these sanctions have far reaching implications for North Koreans. Sanctions have been imposed on various aspects of trade, investment, financial services, travel, access to oil, arms sales, financial transactions and cargo inspections, among other measures.
The sanctions have also tightened the cap on North Korea’s oil and gas imports, stopped all natural gas imports, halted the sale of textiles, banned all new joint ventures, strict scrutiny on financial transactions and suspended certain aviation activities. As a result, North Korea’s exports of iron, coal, and other minerals were diminishing significantly.
Impact On North Korea
The economic sanctions have had a devastating effect on North Korea’s economy, leading to an estimated plunge in Gross Domestic Product from an estimated $37billion to $32billion. In 2017, the UN’s World Food Program estimated that 70 percent of North Koreans, about 10.4 million people, are “food insecure” and required urgent food assistance.
Notably, the sanctions have had a destabilizing impact on North Korea’s currency, forcing the government to implement increasingly strict currency controls. The North Korean currency, the won, had fallen 52 percent in 2014 amidst the sanctions. Similarly, the country’s inflation rate can be expected to rise further.
Sanctions As A Tool Of Diplomacy
While economic sanctions can be used as a force of deterrence, they can also be used as a tool of diplomacy to bring an end to a disagreement over certain matters. In the case of North Korea, they were imposed to discourage Pyongyang from further development of its nuclear missile program. For example, in June 2020 the security council had approved a “symbolic” ban on exports such as coal, iron ore and seafood, as a diplomatic measure to compel the North Korean government to return to the negotiating table in pursuit of a peaceful resolution.
Effects On North Korea’s Relations
The economic sanctions have had an undeniable impact on North Korea’s international relations. It has further widened the gap between North Korea and its traditional ally, China. In December 2017, China had imposed its own tough economic sanctions on its neighbor.
Furthermore, the economic sanctions have significantly corroded its ties with South Korea. The strained economic ties between the two states have hampered their bilateral economic cooperation and deprived them of the opportunity to resume stalled inter-Korean business projects, such as the Kaesong Industrial Complex in North Korea that employed 50,000 workers.
Improving The Economic Situation
Given the serious repercussions of the sanctions, North Korea’s government has taken numerous steps to bolster its economy. For instance, North Korean leader Kim Jong Un announced plans to cultivate limited direct foreign investment. The government also announced plans to promote renewable energy and facilitate special foreign investment zones.
These initiatives have seen some success. A pending deal with Singapore-based SeaLots to develop the country’s shipping sector and construction projects being commissioned in North Korea for Russian businesses are testament to the fact that economic sanctions are not totally stalling the country’s economic prospects.
Influence Of Sanctions On People
The economic sanctions have had a drastic effect on the lives of everyday North Koreans. The dwindling sources of income and lack of capacity to import food, fuel and other essentials have further exacerbated the economic crisis in the country.
The situation is so alarming that the United Nations in March 2018, initiated an appeal asking member states to donate USD111.85million as relief aid for North Korea’s 16.4million population.
Suppression Of Humanitarian Aid
The sanctions have been criticized for their potential to suppress the flow of humanitarian aid. This can be exemplified by the case of the US NGO, the Eugene Bell Foundation, which was forced to halt its tuberculosis relief efforts for North Korean patients in 2019 due to US sanctions imposed on North Korea.
Although the US government eventually allowed the NGO to resume its operations, a recent report published by the Asia Pacific Peace, Human rights and Development Alliance revealed that the NGO still faces difficulties in obtaining medicine and other necessary medical supplies.
Policy Discrepancies
The existing economic sanctions on North Korea are fragmented in nature, varying in their objectives and enforcement, making it difficult to accurately determine the economic magnitude of their effects. Furthermore, the lack of unified dedication within the UN member states has allowed some countries to circumvent the sanctions and carry out illicit activities with North Korea.
This is especially true in the case of China, with reports suggesting that China has knowingly flouted various aspects of existing economic sanctions. While trade between China and North Korea has diminished as a result of the sanctions, there are still areas in which Chinese imports are increasingly flowing into North Korea.
Social Impact Of Sanctions
Given their drastic effect on North Korea’s economy, the economic sanctions have had serious implications for the country’s people. Reports have suggested that North Koreans are suffering far worse than before the sanctions, with people unable to access food, healthcare and other essential services.
Various research projects have since been carried out to understand the impacts of the sanctions on North Koreans’ livelihoods, as well as their health and access to education. Researchers have also studied how specific sectors such as: trade, finance and employment have been affected.
Conclusion
Despite their intentions, economic sanctions on North Korea have left a devastating impact on the country’s economy and people. This is largely due to discrepancies in the enforcement of the sanctions, lack of unified dedication within the UN, as well as various countries undermining the sanctions by circumventing them.
As such, it is imperative to focus on providing a solution to the problem rather than relying solely on economic sanctions to bring about change. The international community must come together to ensure that economic sanctions on North Korea are adequately enforced across the board and to provide the North Korean people with the necessary humanitarian aid.
