North Korea aims to expand government expenditure on pandemic preparedness by a third this year, according to state media, in response to leader Kim Jong Un’s requests for a more “modern and people-oriented” viral response.
The budget plans were approved during a rubber-stamp parliament session in Pyongyang on Sunday and Monday, only weeks after the North cautiously reopened railroad freight business with China after two years of severe border bans and economic decline.
During a political meeting in December, Kim hinted at deeper changes to the country’s pandemic response when he urged for a shift to enhanced anti-virus measures based on a “scientific foundation.”
According to the Korean Central News Agency, North Korea’s Supreme People’s Assembly approved plans to expand anti-virus spending by 33.3 percent over last year. Those expenditure projections were not described in monetary terms in the report.
North Korea’s pandemic response is a top priority in state affairs, according to Kim Tok Hun, premier of the North Korean Cabinet, a key institution in charge of economic policies, but the measures will be “put on a scientific basis to guarantee the security of the country and the people,” according to KCNA.
In the midst of a widening diplomatic standoff, it appears that Kim Jong Un did not attend the parliamentary session, and state media did not report any statements by senior officials toward Washington or Seoul.
Kim has promised to beef up his nuclear weapons in previous political rallies. According to KCNA, the North’s nuclear weapons program received 15.9% of its total government spending last year, and the same amount of its budget this year would be spent on boosting military capabilities.
North Korea’s budget description clearly indicated its ambitions to steadily enhance trade and other interactions with China, its primary ally and economic lifeline, said to Cheong Seong-Chang, an expert at South Korea’s private Sejong Institute. He suggested that instead of shutting down the entire country, the North might take China’s technique of closing some districts to stop broadcasts.
North Korea continues to claim that it has a spotless record of keeping COVID-19 out of its country, a claim that is widely questioned. However, the two-year closing of its border to practically all commerce and visitors stunned an economy already battered by decades of mismanagement and severe US-led sanctions over Kim’s nuclear and missile programs.
Last month, the North resumed railroad freight business with China, following a flurry of missile launches plainly geared at pressing the Biden administration over delayed nuclear negotiations, which some analysts believe demonstrates the urgent need for foreign assistance.
The reopening of the border might indicate that the North is looking for more long-term solutions to the coronavirus danger, which could last for years. It might also give insight into the North’s plans for COVID-19 vaccinations.
North Korea has so far avoided vaccinations distributed by the United Nations-backed COVAX program, probably due to international monitoring requirements. However, other analysts believe the North will continue to seek China and Russia’s assistance in providing regular testing and vaccines for workers and military in border areas where access from other regions would be severely restricted.
Because many of North Korea’s key export operations are forbidden under international sanctions strengthened since 2016, when Kim began speeding his nuclear development, imports will almost definitely drive the country’s resumption of commerce with China. Fertilizers are needed to enhance food production, building supplies are needed to support Kim’s ambitious development programs, and factory items are needed to stimulate industrial production, which has been destroyed by the two-year trade embargo.
Nonetheless, commerce between North Korea and China is projected to be severely reduced compared to pre-pandemic levels.
Given the toll of sanctions and pandemic-related issues, North Korea is unlikely to have enough foreign currency reserves to purchase a large quantity of products quickly. Experts say it would be a significant policy blunder to boost imports too rapidly when a surge in pent-up demand may further destabilize an already shaky economy.
“It appears North Korea is taking a ‘taste and see’ strategy, reopening its border in stages if the COVID-19 situation stabilizes but closing it again if the virus situation worsens,” said Kim Byung-yeon, an economics expert at Seoul National University. “It’s also probable that the state would strive to impose stronger control over commerce than in the past, as well as crackdown on illegal operations like smuggling, so commercial activity will be less dynamic than it was previously.”