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Economic Sanctions and the Nuclear Issue: Lessons From North Korean Trade

On 38 North, Prof. Frank comments on the latest North Korean trade data in the context of the ongoing sanctions debate. [link]

The key takeaways include:

  • North Korean trade in 2016 has grown over 2015 (when it had dropped for the first time in 16 years), which is counterintuitive.
  • The trade deficit in 2016, and actually each year since Kim Jong-un has taken power, is below the average of 2005-2012.
  • We see no obvious effect of the closing of the Kaesong Industrial Zone on North Korean imports.
  • With cash reserves of just 2 billion US$, and at the current levels of price and usage, the North Korean government could procure oil for the next five years without exporting a singe item.
  • Only ten years ago, North Korea was able to exist comfortably with just one third of its current trade.
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