North Korea is reportedly running out of hard currency and could be effectively broke by October, a South Korean lawmaker revealed Wednesday.
North Korea is facing tough international sanctions, punitive measures imposed on the rogue regime for its ballistic missile and nuclear weapons testing, and rumors have circulated for months that the Trump administration’s “maximum pressure” campaign is taking its toll on the regime.
“If international sanctions against the North continue like this, all of North Korea’s foreign currency earnings and overseas assets will be frozen, and its dollar (reserves) will dry up around October,” South Korean lawmaker Rep. Kang Seok-ho, member of the conservative Liberty Korea Party and chairman of the parliamentary intelligence committee, revealed Wednesday, pulling from an unspecified analysis put together after discussions with intelligence officials, according to Yonhap News Agency.
“Our government should further strengthen cooperation with the international community on sanctions against the North,” Kang added, asserting that North Korea’s sudden willingness to engage the South is an attempt by Pyongyang to relieve the pressure and escape economic hardship.
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North Korea has become increasingly reliant on international trade in recent years, making sanctions potentially more effective at destabilizing the North’s fragile economic system, which functions as a command economy propped up by illicit market activities that survive on bribes and corruption.
“Pyongyang is estimated to have about $3 billion in foreign exchange reserves,” Kim Byung-yeon, a professor of economics at Seoul National University, wrote in a recent article for the Korea JoongAng Daily . “The coffers will fall further this year. By the second half, North Korea could be short on foreign exchange.”
Kim, acknowledging that the North Korean regime may have hoarded away additional funds, argued for tougher sanctions against North Korea.
Ri Jong Ho, a former North Korean official in charge of securing funds for the regime, revealed last year that North Korea may not be able to withstand the sanctions it presently faces. “I don’t know if North Korea will survive a year [under] sanctions,” he revealed last October at the Asia Society in New York.
In late January, two Chinese sources reportedly with close ties to North Korean leadership told Radio Free Asia that North Korean despot Kim Jong Un’s critical slush fund is drying up, as the young leader is believed to have spent millions of dollars on weapons testing and lavish luxury projects.
As North Korea does not provide reliable economic information, it is difficult to know the true state of North Korea’s economy or the impact of sanctions on the rogue regime.
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