North Korea is one of the most isolated countries in the world. With its closed economy and government that is one of the most oppressive in the world, it is not difficult to understand why North Korea is a source of agitation for many countries. But what do businesses actually buy from North Korea?
At first glance, it may seem that businesses have no reason to buy anything from North Korea. The overwhelming majority of economic sanctions imposed by international bodies, such as the United Nations, have effectively silenced most of the country’s commercial transactions.
However, not all business dealings with North Korea have been cut off. There are certain sectors where businesses are still able to purchase goods from North Korea. According to trade statistics compiled by Statistics Korea, some of the items that businesses are buying from North Korea include coal, oil, chemical products, machinery, and electronic goods.
In 2018, North Korea’s trade with South Korea surged to an unprecedented level. According to the Bank of Korea, North Korea’s exported goods to South Korea totaled almost 1.5 billion U.S. dollars, while its imports totaled 853 million U.S. dollars. This marked a significant rise from 2017, when North Korea’s exports to South Korea totaled only 127 million U.S. dollars, and its imports only 8 million U.S. dollars.
This surge in trade is seen as a positive sign for North Korea. Despite its international isolation, North Korea managed to increase its exports to South Korea by almost 1 billion U.S. dollars in one year, a positive sign for its economy.
But North Korean businesses are not just trading with South Korea. As trade embargoes continue to be enforced on North Korea, businesses around the world are still interested in purchasing goods from the country. Many companies in China, India, Japan, and other countries have sought to purchase goods from North Korea, though most of these deals have not been made public.
Given the vast economic resources of some of these countries, many international experts have raised genuine concerns over the operations of these businesses. These experts argue that any business dealings, even those conducted through legal channels, could help the North Korean government sustain its oppressive rule and militaristic ambitions.
At the same time, however, there are some who believe that purchasing goods from North Korea could have a positive impact on the country. These people argue that by trading with North Korea, businesses can help open up the country to the global economy and create economic opportunities for North Korean citizens.
Political Impact
Apart from the economic impact, trading with North Korea has a significant political impact. Many governments, including the United States and the United Nations, have traditionally viewed North Korea’s trade with the rest of the world with suspicion. As such, many countries have imposed trade embargoes in order to contain North Korea’s military ambitions.
While these embargoes have been mostly successful in cutting off North Korea’s economic ties with the rest of the world, it has not succeeded in eliminating them entirely. As proven by the recent surge in trade between North Korea and South Korea, businesses are still willing to engage in commerce with the country, regardless of the political risks.
This has led to the United Nations and the United States to express their concerns with countries that choose to trade with North Korea, as well as to place additional trade sanctions on specific businesses and countries. Some of these sanctions are even directed at countries that do not have direct trade ties with North Korea, as some governments view these countries as “enablers” of North Korea’s activities.
Sanctions and Their Effects
International sanctions against North Korea have been in place for decades, and have had a significant impact on the country’s economy. Most notably, the sanctions have effectively prevented North Korea from engaging in international trade, as well as accessing critical resources and technologies.
The effects of the sanctions have been particularly noticeable in the agricultural industry, where farmers have not been able to access enough resources to properly cultivate their crops. This has resulted in a decrease in North Korea’s agricultural production, which in turn has caused food shortages and led to an increase in food prices.
Furthermore, the sanctions have also limited North Korea’s ability to export goods to other countries. In particular, the country has been unable to export goods to South Korea and China, which are, traditionally, two of North Korea’s largest trading partners.
The sanctions have also had a significant impact on North Korea’s economy. The limited access to international financial markets and resources has further hampered the country’s ability to engage in global commerce. This has resulted in a stagnant economy, which has caused a decrease in economic growth and an increase in poverty rates.
Financial Transactions with North Korea
Despite the international sanctions, some businesses have still been able to engage in financial transactions with North Korea. Most of these transactions involve the purchase of goods such as oil, coal and other commodities.
It is important to note that not all of these transactions are legal. Some businesses have engaged in illegal trade with North Korea, which has led to international sanctions against both the businesses and governments involved. As such, businesses and governments that engage in financial transactions with North Korea should be aware of the legal risks associated with such transactions.
Aside from purchasing goods from North Korea, businesses have also been able to access funds within North Korea. This is due to the increasing availability of banking services in North Korea, as well as the adoption of international standards of financial accounting. While there are still certain restrictions in place, businesses are now able to conduct international payments, fund transfers and other financial transactions with North Korean entities.
Business Opportunities in North Korea
Despite the political and economic restrictions imposed on North Korea, some businesses have seen the country as an opportunity. There are businesses who are interested in investing and helping to develop North Korea’s economy.
These businesses believe that by investing in North Korea, they can help create jobs, assistance in the development of infrastructure, and assist in the growth of the North Korean economy. They contend that by doing so, they will be able to create long-term value for their shareholders, as well as benefit the North Korean people.
However, these businesses should be aware of the risks associated with investing in North Korea. The country’s economy is highly unstable and the legal and regulatory environment is often unpredictable. As such, businesses should exercise caution when considering investing in a volatile and unpredictable country like North Korea.
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