Counting the Cost

N Korea unfazed by talks of increasing sanctions

Pyongyang’s nuclear weapons programme is full steam ahead in the face of increasing US-led international sanctions.

Not only did North Korea appear unfazed by US-led talks of imposing further sanctions on the country amid tensions caused by ongoing nuclear tests from Pyongyang; instead, it launched its sixth test. 

Washington has called for an oil embargo and a freeze on Kim Jong-un‘s assets and is even threatening sanctions against the international business community should they choose to trade with North Korea. China accounts for the majority of North Korean trade, followed by Russia at a distant second place.

However, in 2016, North Korea’s output grew at its fastest pace in 17 years, at 3.9 percent, leaving analysts to doubt the effectiveness of the sanctions model. 

Byung-Yeon Kim, a professor of economics at Seoul National University says there are sanctions that are yet to be made which could yet make a difference to North Korea’s nuclear programme ambitions.

“There are three more sanctions possible. The first is to cut off oil supplies to North Korea,” he says. “If the Chinese government cuts off supplies through their pipelines, this will reduce oil consumption in North Korea by 40 or 50 percent, it will halt the economy to a large extent.”

On the seemingly undeterred growth of North Korea’s output, Kim says markets and trade are the main drivers.

“This changes the economy of North Korea. The markets and trade have impacted construction because the money from foreign trade helps to build large buildings in North Korea. The energy sector [is also affected] because North Korea has built some power plants. There was also an increase in production last year affected by foreign trade and the marketisation of North Korea.”

“Markets undermine the control of society. People engage in market activities, they do not rely on the state, therefore, they become more autonomous. Therefore, in the long run, North Korean authorities will lose control over people. Therefore, in one sense, the markets [are good] because the economy is okay and they can focus on nuclear developments, but on the other hand, this marketisation will undermine the control [of the North Korean] society,” he continues. 

Also on this episode of Counting the Cost:

India’s river project: India’s government is launching an ambitious plan to connect its major rivers amid monsoon flooding that shook the country this season. The eastern state of Bihar saw some of the worst flooding India has ever seen, with hundreds killed and thousands rendered homeless.

However, concerns about the project causing further environmental damage have risen from within local communities.

The plan includes connecting 60 India’s major rivers, including the Ganges, with strategically placed dams helping to regulate the flow of excess water from overfilled rivers and into those with a greater need for a higher volume of water.

With thousands of kilometres of canals also set to be built as part of the new river infrastructure, the environmental and social impact has been assessed to potentially cause major damage. Millions of people living on and near the selected river banks are set to lose their homes as part of the building process.

Officials are positive that with the introduction of an adequate resettlement programme, these fears can be put to rest. Farmers and families who have experienced the brunt of government infrastructure programmes in the past, however, are not as optimistic. 

Qatar’s new deep water port:

Qatar recently inaugurated the new Hamad deep water port as part of its plans to ensure economic independence and security. The new port provides an alternative to large container ships which were previously forced to dock in the United Arab Emirates by giving them a direct route to the Qatari capital, Doha. 

The port boasts a capacity of 7.5 million shipping containers annually with full operations set to be in motion by 2020. 

Strategic risk analyst Andreas Krieg says this not only a significant moment for Qatar in light of the current blockade imposed by neighbouring Gulf countries, but for the future of the country’s sustainability and resilience in its ability to maximise its shipping and storage capabilities without relying on any alternate sources. 

Business opportunities are also a major off-shoot of the Hamad port project says Krieg, potentially the most important output from this new development, “The Hamad port is part of a much wider project to create small and medium-sized enterprises around that area, making logistical costs of these companies to import and export easier.”