North Korea’s Recent Economic Recovery and the Sustainability of the Regional Development Policy – 38 North: Informed Analysis of North Korea

Submission Statement

Summary: An analysis of the recent economic dynamics in North Korea in light of normalization of trade with China and the progress of the “comprehensive revitalization” and “20×10 Regional Development Policy” of General Secretary Kim Jong Un. 38North sees that infrastructure build-up, which are the aims of the “Regional Development Policy” succeeds but asks whether the new factories and facilities can be operable

How it relates to the sub: North Korea is undertaking a transformation that could strengthen its regime stability and economic-technical capabilities while largely preserving its political and social system intact. This is a very important development considering North Korea role in one of the most critical regions of the world. North Korea peculiar strategy however cannot be easily sorted into “pro-China” or “pro-Kremlin” camp either.

My Opinion: This is largely stating the obvious at this point, North Korea can build things, even if the standards are lower and advanced methods are materially unavailable. However, the critical choke point is electricity revitalization, and all indications show they are planning to revitalize their coal industry to restore power supply that has been in depression since the 1990s. They have announced coal mine revitalization in the recent plenum and the propaganda (which is **the** policy signal in North Korea) has been focusing on coal recently.

I am also thinking foreign currency exchange rate collapse is largely irrelevant story. Most of market transactions are in foreign currency, locals refuse to even touch the North Korean won, and DailyNK suggest a large role in won value collapse is the result of authorities simply cracking down on money exchangers, which would always drive price up due to risk factor.