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Mitsuhiro Mimura: The secret to North Korea’s economic resilience

July 3, 20250 comments♥ 0
00:00 You're listening to an exclusive episode of the NK News podcast available only to subscribers. You can listen to this and other episodes from your preferred podcast player by accessing the Private Podcast feed. For more detailed instructions, please see the step-by-step guide on the NK News website at nknews.org slash private dash feed uh... hello listeners and welcome to the NK News Podcast. I'm your host, Jaco Zwetsla, and this episode is recorded in the NK News recording studio on Wednesday, the 25th of June, 2025. It's the 75th anniversary of the start of the Korean War.
01:00 And today, I am talking to Professor Mitsuhiro Memura, who is a leading Japanese expert on the North Korean economy and regional integration in Northeast Asia. It's something we haven't talked about before. He's currently a professor at the Economic and Social Research Institute for Northeast Asia at the University of Niigata Prefecture or ERINAU-UNP for short. And he's previously served as a senior research fellow at the Economic Research Institute for Northeast Asia. So Professor Mimura, welcome to the NK News podcast. Thank you. It's great to have you here. Now you've been to North Korea many, many more times than I have. I've been four times. I think you've been over 40.
01:40 So there's less than 40, maybe more than 35. Okay, but who's counting? There's still many more times than me. And you've been tracking the economy for decades. So right now, despite sanctions and years of diplomatic isolation, it looks like trade is booming again in North Korea and we see new infrastructure going up. They've got the project, the 2010 project. So let's start with this. Is North Korea actually in the middle of an economic rebound?
02:10 Well, they are showing very, let's say, strong resilience against economic sanctions. But well, I can say their economy is growing so much. So in spite of the sanctions, their economy is growing little by little. And that seems to be that, well, from the outer world, North Korea might look something strange because, well, in spite of these very very strong Sanction measures is a prohibiting and 90% of is export to China 90% Yeah in 2016 became the band under the UNSC sanctions, you know, yeah, so Actually, it should be
03:02 struggling but should be struggling, but they are so-so. I can't say that their economy is good, but we're so-so in spite of the many, many is a sanction measures. Okay, so the growth that we are seeing, some of the new infrastructure, the buildings going up, is that a surface level growth or is there some real depth beyond that?
03:28 Well, it's very hard to say because there is no open statistics. They are opening up. So at least they have some steel and cement to build his apartments in Pyongyang. And, but also- Do they make their own steel and they make their own cement?
03:49 Yes. Okay. Well, it's a, well, a Japanese company built as a factory in the Japanese colonial era. And then it was destroyed by Korean War and then rebuilt again. So they have a good iron mill in Chongjin and also in Hwanghaedo. Okay.
04:11 Yeah. Right. So you just mentioned how hard it is to, to make any kind of analysis of the North Korean economy. When were you last in North Korea? In August, 2019. Okay. So yeah, about six months before North Korea shut down for COVID.
04:29 Yeah, actually, I was planning to visit Pyongyang in the middle of February 2020, but my visit was cancelled two weeks before my visit. So how do you track the North Korean economy now when it's almost impossible to visit and with no open statistics? How do you look at it? Well, we're looking at the, not the statistics, but they report yearly governmental budget. And we're looking at that during COVID period, the growth rate of the national budget was very low. But now
05:10 after 2013, 23, the speed got a bit faster than the COVID period. But actually, looking at the trade statistics of China. Hang on, just before we go to China, go back to the budget figures. Can you give us any idea of the percentage growth in the budget in the last couple of years after COVID? Okay, so during COVID season 2020-21-22, the growth rate is like 0.7%. Okay, so very, very low. Yeah, very, very low.
05:46 And after that, it became some 1.7%. Okay, so we have some modest growth in the size of the budget. Well, we're looking at the size of the North Korean economy. 1-2% is a development, is very slow development. Okay. If it is some US economy Japanese economy South Korean economy The 1.5 2% growth is very big in figures. Thank you Okay, so in North Korea, so relatively speaking given the North Korean conditions, it's a low rate of yeah
06:20 Okay. Now you were about to talk about China So I know that we we often look at the Chinese statistics to learn what's happening in North Korea, China trade. So what, what are the latest figures between North Korea and China? Tell us about the current direction of the North Korean economy. So after 2023, the figures are growing, but well, it's maybe there is a glass ceiling of China DPRK trade because of the
06:50 UNSC related sanctions. So the figure didn't go up, well, is a return to the figures before 2016. Ah, okay. So yeah, because many of those sanctions began in 2016. 17. 17. It was 16, there were resolutions were made and actual decrease in figures started 2017. Mm-hmm. Yeah, okay. So for example, the United Nations resolution 2371 passed in August 2017. That's the resolution that banned all North Korean experts of iron, coal, lead, and seafood, correct?
07:33 But I think if I'm not mistaken, we hear that North Korean coal exports seem to be increasing. Well, that is an unofficial export, right? Okay. But can we see, do you have any idea about the size of North Korean unofficial coal exports or iron exports? Well, as for iron exports, the figure might not so big. And as for coal, well, as North Korea started to export coal to China, well, they started to do so very fast in 2011. And looking at the size of export, maybe some 1 million ton, well, a year or 2 million tons a year is quite possible. But actually, Chinese government is also, what to say, controlling the unofficial trade.
08:30 When you say controlling, you mean is it restricting unofficial trade? Well, it is, well, a kind of illegal, it's an economic transaction. Right. Because of the sanctions. Right. So does that mean that the Chinese government is preventing completely open trade of coal? So basically, they do not allow Chinese companies to import coal from the DPRK, but some companies, well, is smuggling it. Right. Okay. Yeah. Sometimes ship-to-ship transfers. Well, since the amount of coal China is importing is so huge, so some thousand of tons, bunch of tons, thousands of tons of coal import to China seems to be very small.
09:17 Uh-huh. Okay. Yeah. But on the other side, how important are coal experts to the North Korean economy? Well, actually, the money they receive is not so big. But actually, I estimate 60 to 80% of the export price of coal is the cost for North Koreans to export coal. And that means that 60% to 80% of money exported to China goes into this domestic market or what do you say, domestic institutions. And so actually exporting coal to China
10:06 has a big spillover effect to North Korean domestic economy. A spillover effect? Yes, so that means that if a coal mine is want to produce coal, then they have to hire people to miners and also a lot of people doing the selecting of coal and also canteens and also apartments.
10:35 So there are so many people is risking money from export of coal. So in a way, the North Korean, can we fairly say that the North Korean coal industry is being kept alive by unofficial exports to China. for more information.