New Delhi: Trade between Russia and North Korea came to zilch in 2021 due to Kim Jong Un’s strict border controls to stave off the spread of Covid. But that can all change now, as Russia gears up to battle western sanctions with new avenues of trade.
US-based news and analysis website NK News has revealed that apart from the zero exports, Russia imported only $40,000 worth of goods, 95 per cent of which was cosmetics.
This was a drastic drop from the $43 million trade figures between the two countries in 2020. North Korea continued trade with China in 2021, but that figure too was the lowest between the two countries in several decades – at $320 million.
Expert Anthony Rinna has predicted that an isolated Vladimir Putin could now “openly disregard” international restrictions on North Korea and begin trade with that country, NK News reported.
The report mentioned satellite imagery from November 2021 of new railway constructions at North Korea’s northern border. This could be a sign, the report said, of potential resumption of overland rail trade with Russia in the near future.
How the sinking ruble hits North Korea
The fall of the ruble’s value means North Korean workers are not being able to pay the government a portion of their earnings which is mandatory.
They are reportedly “struggling to meet Pyongyang’s remittance quotas”.
“From January to August 2022, each North Korean construction worker was expected to remit $6,500 in dollars, according to a monthly list of quotas set by Pyongyang… That was equivalent to 710,000 rubles using the current exchange rate of 110 rubles a dollar. In October 2021, $6,500 was equivalent to 460,000 rubles when the exchange rate was 70 rubles per dollar. This means North Koreans must now earn 30% to 40% more to fulfil the required remittance quotas,” Voice of America, the US state-owned international news broadcaster, has reported.
Furthermore, according to the Wall Street Journal, although sanctions on Russia are unprecedented for a large country, the ongoing smuggling of coal by North Korean vessels in Chinese ports could mean the sanctions may not have the desired impact if China replicates such market access to Russia.
“As the world’s second-biggest economy and its top trading nation, China has the wherewithal to set its own course on sanctions, and its government is reflexively distrustful of US-led rule making. The size and fragmentation of China’s market, with over 5,800 merchant ships, seven of the world’s 10 busiest shipping ports and tens of thousands of bank branches can help hide nefarious activity,” the WSJ wrote.