North Korea, Kim Jong Un seeks arms increase in cash from North Korea’s moneyed class to counter the dual threats from coronavirus and sanctions.
According to Jong Un, He said its 36-year-old leader was reasserting centralized control over the economy, potentially undermining the shift towards marketization and fledgling signs of capitalism.
It reported by Daily NK, a Seoul-based news service, and referred to by Fitch Solutions in a report last week. It has not been independently confirmed by the Financial Times. Which has slowed domestic commerce and severed critical trade links along the 1,420km border with China?
“Suddenly issuing that amount of debt, in one year, is a big deal. I think this is the first real sign that they are under very significant financial stress as a result of sanctions and result of the virus,” said Peter Ward, a Seoul-based North Korea researcher with the University of Vienna.
The North Korean government had been “basically incompetent” in making sound investment decisions and providing social services.
“You are going to smash and grab and steal lots of cash from people who know how to spend it on good things for the economy,” Mr. Ward said.
“They are probably going to spend it on all the things they usually spend it on white elephant prestige projects, palaces for the leader, and pay-offs to the elite.”
The North Korean economy, it is worst since a 6.5 percent fall 23 years ago. It marks an almost 10 percentage point downward revision from Fitch’s earlier forecast of 3.7 percent growth.
“We believe that it is now becoming tougher for the state to prop up economic activity as funding sources have dried up significantly .
There is no doubt that the Covid-19 crisis has exacerbated the effects of the still large number of economic sanctions faced by North Korea.”
North Korea claims that it has not suffered any coronavirus infections, Mr. Wertz said the crisis would bolster its bid to tighten control of foreign trade and foreign exchange.
“The goal is to get more of the revenue from market-orientated enterprises ultimately going to the state, instead of the coffers of corrupt elites, they want to have a better ability to shape the general direction of the economy’s development and know what is going on across the economy,” Mr.North Korea leader, Kim Jong Un, seek arms from elites Wertz said.