- The pandemic poses challenges for both Koreas in a changed global economy, presenting an opportunity to seek bold new initiatives.
- Despite no confirmed cases of COVID-19, North Korea will suffer the human and economic cost of a strict quarantine.
- South Korea is politically motivated and financially prepared while President Moon is in office to proceed with improved inter-Korean relations.
Nearly 70 years after the end of the Korean War in 1953, and the many failed efforts to forge a lasting peace and secure future for the Korean people living on a divided peninsula, the transformative impact that the COVID-19 pandemic is having globally also holds the seeds for a transformative change on the peninsula.
The pandemic and its aftermath pose significant challenges for economic and social resiliency for both Koreas in a changed global economy and geopolitical environment. These present an opportunity to seek bold new initiatives that can overcome historical legacies and current vulnerabilities and underpin future political, security, social and economic developments that can lead to enduring peace and prosperity for the Korean people.
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Human security can be the cornerstone of this future. A first step in a post-pandemic strategy of building back better would be to strengthen the capacity and resiliency of the North Korean health system and pandemic preparedness and foster sustainable food security as the foundation for a new era of inter-Korean cooperation and multi-stakeholder engagement with North Korea.
This would involve giving priority to the post-pandemic political and economic challenges facing human security in the DPRK, applying lessons of the global pandemic for strengthening North Korea’s pandemic response and preparedness, being practical about what it will take to provide sustainable food security for the North Korean people, and clearly identifying what policies related to economic management and social resiliency, together with sanctions relief and technical and financial assistance, would be required to help North Korea meet these needs.
Prioritizing human security as a foundation for peace can also have a transformative impact on nuclear and military diplomacy with the Democratic People’s Republic of Korea (DPRK) by reframing considerations and priorities for addressing all security needs. Trust building through more expansive cooperation than provision of humanitarian assistance alone can reinforce incentives to negotiate realistic timetables and ways for political, military, and economic adaptations to the evolving post-pandemic global order and regional relations. This can also form a new and potentially more fruitful context for reaching practical agreements on denuclearization of the peninsula.
The DPRK is at a critical juncture. Despite continuing advances in military technology, the combined impacts of diplomatic failures for peace building, disappointing efforts to improve economic management and performance, punishing sanctions, consequences of the COVID-19 pandemic and the intense prevention strategy, multiple typhoons, and growing social disparities and tension in the political economy, are all converging as 2020 comes to a close.
As the leadership prepares for a Party Congress planned for January 2021, these domestic challenges and a changing international political environment with the election of Joe Biden in the US and Yoshihida Suga in Japan, set the context for making strategic choices for future economic and security policy that could either lead to entrenched dependence on China and Russia, or a transformative period of global engagement and cooperation.
Economy and human security
A 1974 UN report framed human security as freedom from fear and freedom from want. Both are inevitably connected to the overall performance of the economy. Since the economic collapse and famine of the 1990s, the DPRK has conflated regime security with human security in prioritizing improving food security, nutrition, and health services to the people, while managing deeply-rooted fear of military threats though maintaining a large standing army and seeking advances in military technology in its nuclear, missile and conventional arms programmes.
The sanctions regime that has been progressively expanded by the UN Security Council and US government has been aimed at suppressing the ability of the economy to support its military ambitions. But especially beginning in 2017, sanctions have also had major negative impacts on the ability of the economy to support meeting the basic human needs of the civilian population in health and food security.
Apart from the impacts of sanctions, the ability of the economy to support North Korea’s security needs have been constrained by its continued adherence to a state-planned economic system with state ownership, and its consequences for low productivity, chronic shortages and low priority for consumer goods.
The tolerance and growth of markets coupled with expanded trade with China until recently have offset some of these systemic weaknesses, but the absence of an integrated approach to management of a mixed economy underlies structural inefficiencies and inequities in the economy and its management. North Korea has been more able to accommodate and adapt to this marketization process in periods when perceptions of external threats have been minimized.
In 2020, these longer-term economic conditions have been impacted by the COVID-19 pandemic and the policy of protecting the health of the people through closing borders and strict quarantine measures. The choice to prioritize the health of population over the economy has been reflected in a dramatic decrease in trade; production of a published budget that is based on a contradiction between the revenue increase expected and stagnation in sources of those revenues; delays in major construction projects such as the Pyongyang General Hospital; and monetary measures taken by the state to raise revenues through bonds, place caps on hard currency holdings, and limit the use of cash cards and mobile phone minutes for electronic payments.
Also, after a long period of exchange rate stability, a 20% depreciation in the US Dollar to Won rate has added to monetary instability. On top of these developments, three typhoons have impacted North Korea, causing damage requiring immediate responses in a pandemic-compromised society. Overall, the DPRK at the end of 2020 seemed to be having huge economic difficulties contributing to significant social stress.
Health system resilience
Health has always been and continues to be a priority for the DPRK. Universal and free medical care is guaranteed by the constitution. Even during the last decade, when North Korea was investing heavily in its nuclear and missile programs, spending on health by the government is estimated to be around 6.1-6.4% of GDP, a robust percentage when compared to its economic peers.
The North Koreans also achieve high levels of health metrics such as the Maternal Mortality Ratio and Infant Mortality when compared to its peers. Despite these achievements, the capacity and resilience of the health system are compromised by ageing infrastructure and equipment and limited availability of medical supplies.
These factors contribute to a clear urban-rural disparity in health as reported in the 2017 UNICEF survey. To mitigate this disparity, the handful of humanitarian organizations working inside North Korea target the most vulnerable. However, their effectiveness has been severely curtailed by the sanctions regime and funding cuts, and the pandemic has essentially brought virtually all programmes to a halt this year.
The DPRK opened up to receiving significant amounts of humanitarian health assistance from multilateral, bilateral and non-governmental organizations during the crisis of the 1990s, reaching $500 million in 2001.
This fell sharply between 2003 and 2005 as nuclear negotiations stagnated; and has remained at less than $50 million a year since 2014, reflecting reduced political will to provide humanitarian funding as the DPRK’s nuclear and missile programmes expanded and sanctions increased in response.
The continuing expansion of sanctions and decline in international humanitarian assistance since 2016 have had a negative impact on the health of the North Korean people. According to one estimate, 4,000 people may have died as the result of delays and the funding cuts to the UN agencies operating inside the DPRK, with over 3000 of them children.
Since 2019, the time to obtain approval by the UN Sanctions Committee of exemptions for humanitarian assistance has been markedly reduced to a couple of weeks, and since the pandemic, sometimes only days. But, the fact that the exemption process is still in place in the face of an international health emergency is problematic. The flow of humanitarian aid has been compounded by financial sanctions which has added to reputational risk and resulted in convincing the banks not to process legitimate funds for humanitarian work inside the DPRK.
On January 23, the DPRK became the first country in the world to close its borders to travel. They also severely restricted external trade by placing all cargo through strict disinfection and quarantine measures. The government has prioritized protecting the health of the population despite huge economic costs. These prevention measures appear to be working.
Officially, even after conducting over 12,000 COVID-19 tests, North Korea has reported no confirmed cases of COVID-19. However, as the pandemic rages on and the borders remain sealed, the human and economic cost of the isolation will at some point overtake the potential toll of a COVID-19 outbreak inside North Korea.
Recent studies of global experience estimate that the worst-case scenario for the number of deaths due to COVID-19 inside in the DPRK could be as high as 150,000, and that the wider health effect of the measures that are designed to prevent the virus from entering the country could cause as many as 93,000 additional deaths in North Korea in a single year.
Some factors that contribute to this increase in excess deaths include an increase in people living in poverty, the degradation of the health system due to interrupted supply chains, delays in accessing medical care, and the loss of external humanitarian assistance. Unless the country is able to reopen its borders, even in a limited way, the economic and human toll will continue to mount.
A critical first step in the new approach will be to provide sufficient assurances to the DPRK of its safety from the pandemic. First, the country should be provided with ample testing capacity. The new testing capacity, perhaps even at a national level, could be combined with the country’s highly effective quarantine and contact-tracing skills to build a level of confidence that may lead to a limited reopening.
Second, medical countermeasures such as ventilators, oxygen concentrators, latest medications, and so on, should be provided in sufficient quantities to build adequate treatment capacity. And lastly, North Korea should be a full recipient of the COVID vaccine under the multilateral platforms for equitable vaccine distribution.
Sustainable food security
Food security is one of the most important components of freedom from want for all people in a society. Food accessibility concerns who gets what share and quality of food among different groups and is revealed by their nutritional status. Food availability comes from both domestic and imported sources and is assessed generally in estimates of total tonnes of food available.
Nutritional surveys conducted by UNICEF between 1997 and 2017 show that nutritional status improved significantly during this period and on North Korean children had better nutritional status than children in richer Asian countries such as the Philippines and India. This improvement was due to increased domestic food production and a manageable food import burden on the economy.
To provide subsistence food for a population of 25 million in the DPRK requires around 5.5 million metric tonnes of cereal. Improvements in agricultural production from 2009-2017 resulted in an annual deficit of around 400,000-500,000 tonnes per year needing to be imported. However, the harvests of 2018 and 2019 saw a precipitous decline in crop yields, with the need for imported food tripling to about 1.5 million tonnes per year.
The main shock to the agricultural economy was the dramatic escalation of sanctions adopted by the UN Security Council in 2016 and 2017, especially the tight limits placed on import of oil and oil-based products needed for fertilizer production and other inputs, such as pesticides, and for fuel for agricultural machinery and transport.
These sanctions also dramatically reduced North Korea’s foreign exchange earnings through bans placed on coal and other mineral exports and textile exports, which significantly impacted ability to pay for the large increase on the DPRK with continued sanctions, pandemic-related restrictions on economic activity, and border closings that have shut down trade and ability to pay for imports needed to fill the food deficit. China and Russia donated substantial food aid to help alleviate these stresses.
Strategic Choices for the DPRK
Due in large part to sanctions and diplomatic disappointments, the North Korean leadership has become increasingly distrustful both of multilateral organizations and prospects for improvement in bilateral relations with the US and South Korea, and is relying more on China and Russia for political and economic support in the challenging external environment.
With COVID-19 and increased isolation, the DPRK has also revealed irrational fears of contagion from unlikely sources, such as pollution from China and leaflets from South Korea.
The DPRK also wants to prioritize economic development and the wellbeing of the people and to make improvements in economic policies and management despite the difficulties in the adverse external environment. As the pandemic continues, the leadership faces several strategic short and long-term choices.
First, while China and Russia have been critical supports in 2020, South Korea is both politically motivated and financially prepared while President Moon is in office to proceed with improved inter-Korean relations. Is North Korea willing to taking advantage of this window of opportunity to expand inter-Korean cooperation focusing on meeting short-term needs to manage the pandemic through increased testing and medical measures and projects to help address other critical needs in health and food security?
Second, to strengthen the capacity and resilience of the health system and to adopt policies and management practices for a more efficient and productive economy that can support sustainable food security, is the DPRK willing to consider being more open and cooperative with multi-stakeholder partners for addressing these needs?
While North Korea has been intent on improving the economy “in our own style”, it is noteworthy that the successes of both China and Vietnam were accompanied by policies to open up to the international community and to learn from the experiences of other countries in adopting successful long-term economic development strategies.
Some steps that could be taken to support such a choice would be willingness to provide more statistical information on economic and social conditions and to embrace expanded cooperation with multilateral organizations that operate in transparent and accountable ways.
Third, building on cooperation for human security and related trust building with foreign partners, is the DPRK willing to consider new approaches to nuclear diplomacy anchored in a practical step-by-step process of pursuing a path to peace that aims to resolve the longstanding security concerns on the peninsula and that can lead to a phased reduction in sanctions and support for successful long-term economic development?
Strategic choices for the global community
With the elections of President Biden in the US and Prime Minister Suga in Japan there is also a window of opportunity to reframe alliance relations and coordination of policies for addressing the DPRK’s nuclear, missile and conventional arms threats along with longer-term goals for maintaining peace and prosperity in Northeast Asia in a changing geopolitical environment.
For the global community and especially the countries most concerned with traditional and non-traditional security in Northeast Asia, there are also strategic choices that will shape the future path of engagement and relations with the DPRK.
First, after several years of pursuing bilateral diplomacy with North Korea, will there be a willingness to pursue innovative new approaches to diplomacy that blend multilateral with bilateral engagement and improved coherence and coordination among the main stakeholder countries, including China and Russia?
While the UN sanctions regime has been forged by consensus in the Security Council, its maintenance now is contested by China and Russia, and while sanctions exemptions are being given for humanitarian purposes, many practical obstacles remain.
In the short-term, in order to alleviate critical social stresses currently present in the DPRK, and signal willingness to consider new approaches to diplomacy, choices could be made to relax sanctions that are having a direct impact on health and food security, and to address the issue of money transfers to the DPRK by multilateral organizations, bilateral agencies, and humanitarian NGOs to enable them to meet in-country operating expenses and assistance programmes directed to critical human security needs.
If such decisions were complemented by expressions of North Korean willingness to work cooperatively and transparently with the providers of such assistance, trust building would be advanced.
Second, if initial cooperative efforts to support North Korean human security challenges as the pandemic recedes are successful, would there be a willingness to support expanded multi-stakeholder support for strengthening the capacity of the health system through investments in supplies for COVID-19 vaccines, other essential pharmaceuticals, and modern medical equipment, together with related technical assistance and training where needed?
Third, with progress in negotiations on the nuclear and other security issues, would there also be support for helping create an environment for the DPRK safely to pursue economic reforms and receive economic development assistance to have an anchor of economic as well as human security in its longer-term security equation?
This could involve an expanded role for the UN agencies, initially a limited role of the International Monetary Fund to provide technical assistance and training on national accounts and macroeconomic management and other financial system issues, initial limited involvement of the international development banks and regional cooperative mechanisms such as the Greater Tumen Initiative, in applying lessons of international experiences in managing the COVID-19 pandemic for future public health management capabilities, non-sanctioned opportunities for economic development, and cross-border cooperation.
Prioritizing human security for the DPRK in the current situation facing the country holds the potential for a new path for peace and eventual Great Reset on the Korean peninsula. This requires courage to overcome fears and distrust, and willingness to make strategic choices by the leadership of North Korea. It also requires international openness, especially by the United States South Korea and Japan, to take advantage of the opportunity at the present moment as the world reimagines many aspects of global life in the aftermath of the pandemic, to also make strategic choices to pursue new approaches in relations and negotiations with the DPRK to seek sustained peace and prosperity for the Korean people and the Northeast Asia region.