North Korean Economy Watch

On January 22, 2013, the UN Security Council adopted Resolution 2087–new sanctions on the DPRK. Here is the press release:

The Security Council, condemning the launch by the Democratic People’s Republic of Korea on 12 December 2012, which used ballistic missile technology in violation of the sanctions imposed on it, today demanded that the country not proceed with any further such activities and expressed its “determination to take significant action” in the event it did so.

In that connection, the Council demanded, through the unanimous adoption of resolution 2087 (2013), immediate compliance by the Democratic People’s Republic of Korea with its obligations under resolutions 1718 (2006) and 1874 (2009), including that it abandon all nuclear weapons and nuclear programmes completely, verifiably and irreversibly.

It deplored the country’s violations of the measures imposed on it in 2006, and strengthened in 2009, including the use of bulk cash to evade sanctions, and underscored its concern over the supply, sale or transfer to or from that country or through States’ territories of any item that could contribute to the activities banned by those resolutions.

The Council recalled that States may seize and dispose of items consistent with its previous resolutions, and clarified that the methods for disposal included, but were not limited to, destruction, rendering inoperable, storage or transferring to another States other than the originating or destination States for disposal.

It further clarified that the sanctions banned the transfer of any items if a State involved in the transaction has reasonable grounds to believe that a designated individual or entity, under the previous resolutions, is the originator, intended recipient or facilitator of the item’s transfer.

In a related provision, the Council called for enhanced vigilance by Member States and directed the relevant sanctions Committee to issue an Implementation Assistance Notice in the event a vessel refused to allow an inspection authorized by its Flag State or if any vessel flagged by the Democratic People’s Republic of Korea refused to be inspected, in line with its obligations.

Reaffirming its support for the six-party talks, the Council called for their resumption and urged all participants to intensify efforts to fully and expeditiously implement the 19 September 2005 Joint Statement issued by China.

The meeting was called to order at 3:08 p.m. and adjourned at 3:10 p.m.

You can see the full resolution here (PDF).

Here is the response from the US State Department:

Designation Of DPRK Entities Pursuant To Executive Order 13382 In Response To UN Security Council Resolution 2087

Media Note
Office of the Spokesperson
Washington, DC
January 24, 2013

The United States welcomes the UN Security Council’s unanimous adoption on January 22 of UN Security Council resolution (UNSCR) 2087, condemning North Korea’s launch of December 12, 2012, which used ballistic missile technology in violation of UN Security Council resolutions 1718 and 1874. Once again, the international community has sent a clear, united signal that North Korean provocations that undermine international security and the global nonproliferation regime, like the December 2012 launch, will not be tolerated.

To implement our obligations pursuant to UNSCR 2087 and to impede the DPRK’s illicit WMD and ballistic missile programs, the Departments of State and the Treasury on January 24, 2013, designated several entities and individuals directly tied to North Korea’s proliferation activities. The Department of State designated one entity and two individuals pursuant to Executive Order 13382, which targets proliferators of weapons of mass destruction (WMD) and their supporters. These include the Korean Committee for Space Technology (KCST), KCST senior official Paek Chang-Ho, and General Manager of the Sohae Satellite Launching Station Chang Myong-Chin.

Information on the Department of the Treasury’s concurrent actions may be viewed at:

http://www.treasury.gov/press-center/press-releases/Pages/default.aspx

The Korean Committee for Space Technology orchestrated the launches of the Taepo-Dong 2 via the satellite control center and Sohae launch area. The technology used to launch a satellite is virtually identical to and interchangeable with that used in an intercontinental ballistic missile. KCST has contributed directly to the DPRK’s long-range ballistic missile development efforts.

Paek Chang-Ho is a senior official and head of the satellite control center of KCST.

Chang Myong-Chin is the head of the launch center at which the launches took place.

These actions aim to disrupt North Korea’s continued WMD proliferation and procurement efforts that are in flagrant violation of UN Security Council resolutions. North Korea will continue to face isolation if it refuses to take concrete steps to address the concerns of the international community over its nuclear and missile programs.

More: Marcus Noland’s comments here. Slate.

UPDATE (2013-1-28): According to Yonhap, the DPRK regime is using the sanctions to unite public opinion behind leadership:

North Korea is using U.N. sanctions to unify public opinion behind the leadership and strengthen allegiance to the state, observers said Monday.

Observers in Seoul said Pyongyang places the utmost importance on the solidarity of the people whether it is in the pursuit of its “songun” or military-first politics or to build up the economy. They said recent media reports of foreign threats and the need to defend the sovereignty and dignity of the country is a move in this direction.
Incumbent leader Kim Jong-un has emphasized the importance of economic growth, while his late father placed greater emphasis on the military. North Korea’s current leader took power after the sudden death of Kim Jong-in in late 2011.

“The sudden flood of articles and stories highlighting external threats can be construed as a sign that Pyongyang wants to prop up Kim Jong-un’s weak public support base as well as the overall leadership,” a North Korean watcher said.

Others said that a spike in media reports calling on the people to defend North Korea’s independence may be a tell-tale sign that Kim Jong-un’s hold on power may not be strong as some predicted.

Reflecting these views, media outlets such as the Rodong Sinmun, an organ of the ruling Workers’ Party of Korea, Radio Pyongyang and Korean Central News Agency (KCNA), all claimed that the people are reacting strongly to calls by the powerful National Defense Commission last Thursday. The commission said future nuclear and rocket tests will have the United States in mind.

Rodong Sinmun said in an article in its Monday edition that the U.N. sanctions have fueled the firm conviction and will of the armed forces and the general public to defend the country.

The newspaper said that the all-out confrontation that can occur is a holy nationalist war.

Similar views were expressed by Radio Pyongyang on Sunday, which pointed out that the only way to deal with the United States and other outside hostile forces is to follow the military first policy.

KCNA said Saturday that foreign forces have hindered efforts to divert more attention to economic development and warned that as long as adversaries try to weaken the country, Pyongyang has no choice but to focus on the military.

The media reports come as the North’s foreign ministry, the defense commission and the Committee for the Peaceful Reunification of the Fatherland all issued statements last week denouncing the U.N. sanctions and emphasizing the country’s resolve to build up its capability to defend itself.

Meanwhile, South Korean officials have warned the North not to detonate another nuclear device. If they do detonate a nuclear device, it will be difficult to engage in inter-Korean dialogue and economic exchange, they said.

Seoul military and diplomatic sources have speculated that the communist country can conduct a nuclear test if the leadership gives its approval. Pyongyang detonated two nuclear devices in 2006 and 2009, in the face of international condemnation.