NK’s foreign currency income likely to shrink over virus spread

North Korea’s foreign currency income looks set to shrink this year, as the coronavirus halts Chinese tourism, one of the few remaining legitimate sources of hard currency for the cash-strapped regime, a Seoul-based think tank said in its latest report.

Pyongyang, which closed its borders with Beijing to contain COVID-19, has long relied on tens of thousands of its people working in China, Russia and elsewhere to send dollars back home, but many workers have been sent back because of UN sanctions, according to Korea Institute for International Economic Policy

“North Korea appears to be facing difficulty securing foreign money, as Chinese tour programs are suspended over COVID-19, while a significant number of North Korean laborers have been repatriated,” the report said.

Total trade volume with China, the North’s closest ally and biggest trading partner, is unlikely to take a major hit from the virus, though, it added. The North has yet to suspend travel of cargo ships. Pyongyang kept its doors open to trading vessels during the SARS outbreak in 2004.

The report said the North’s economy is in dire condition, with its trade volume the previous year cut to $2.7 billion, compared with $5.3 billion in 2016. In 2019, Pyongyang also recorded the largest-ever goods trade deficit of $2.3 billion with Beijing. Industrial output in the North was still sluggish.

Meanwhile, the North Korean government was aggressively seeking Chinese investment in fishery facilities to boost production, Radio Free Asia said Monday, quoting local traders familiar with the issue.

“Pyongyang is offering labor and land in exchange for Beijing’s capital and technology. It’s a joint venture where North Korea runs the business and China receives its proceeds,” one trader told RFA, which added the Chinese, however, were not as receptive to the proposal as they had previously been.

By Choi Si-young (siyoungchoi@heraldcorp.com)