The Institute for Far Eastern studies (IFES) published the article below:

The Issue of Regulating Coal and Iron Ore Exports Raised in North Korea



There is a growing sense inside North Korea for a need to regulate the export of underground resources such as coal through imposing export tariffs or other trade barriers.

An overwhelming percentage of the country’s exports consist of underground resources and there is rising speculation that North Korea is pushing forward long-term transformation of its trade and industrial structure.

An article in a recent edition (published October 20, 2014) of Kim Il Sung University’s school newspaper has argued that “We need to protect the country’s precious resources by applying different tariff rates.”

The article stressed that “The subjects of export tariff first need to be selected for raw materials and energy resources that is urgently needed for the construction of a socialist economic powerhouse.”

In other words, there is a need to prevent the excessive exportation of goods through levying a high export tariff rate on underground resources.

The article specifically picked out coal and iron ore as underground resources which are important for economic development, and pointed out that “We need to do all we can to prohibit the export [of these resources].”

According to KOTRA (the Korea Trade-Investment Promotion Agency), in 2013 the percentages of coal and iron ore among North Korea’s total exports were, respectively, 42.9 percent and 9.3 percent, which amount to over half of all exports.

North Korea’s consideration of regulating the export of underground resources in such a situation is seen as an attempt to achieve long-term industrial development, which may decrease its foreign currency earnings in the short-run.

The Kim Il Sung University newspaper article also argued that “We must actively protect our country’s resources so that we can develop a vibrant and self-reliant national economy.”

The fact that last year North Korea’s export of anthracite* to China dropped for the first time in 8 years is also thought to be a product of such a policy consideration.

North Korea’s push to regulate the export of underground resources is viewed as an effort to reduce its dependence on China, but many are skeptical regarding how effectively North Korea will implement such a policy with its urgent need for foreign currency.