North Korea’s COVID-19 policy dilemma: epidemic prevention conflicting with trade

Abstract

Amidst the COVID-19 pandemic, striking a delicate balance between sustaining economic activity and safeguarding public health has become a crucial concern. The border closures for COVID-19 prevention have further intensified concerns for North Korea, which conducts over 90% of its trade with China and Russia, countries sharing its borders. This study aims to scrutinize North Korea’s response to these competing imperatives by examining the impact of border closures on the country’s trade dynamics with China and Russia. This study employed the difference-in-difference (DID) method to analyze transformations in North Korea’s economic activity before and after the border closures, utilizing trade data and nighttime satellite imagery captured in 2019 and 2020. The results reveal that North Korea actively reoriented its trade priorities towards Russia and accorded precedence to its epidemic prevention system over its economy during the pandemic. A noticeable increase in imports of food and pharmaceuticals was observed, indicating a significant rise in the inflow of these essential commodities. The findings of this study suggest that during the early stages of the COVID-19 pandemic, North Korea placed significant policy emphasis on preserving public health. However, due to economic hardships and food shortages, if the pandemic persists in the long term, it indicates the possibility of partial or complete lifting of border closures to mitigate these challenges.