UN sanc­tions to halve N. Korean ex­ports

The Pak Banker - - 6BUSINESS -

The lat­est wave of U.N. sanc­tions on North Korea fol­low­ing its banned weapons tests may nearly halve the im­pov­er­ished state's min­eral ex­ports, cloud­ing its econ­omy heav­ily de­pen­dent on China, a re­port showed Tues­day.

The U.N. Se­cu­rity Coun­cil im­posed a raft of tougher sanc­tions on Py­ongyang ear­lier this month to pun­ish it for the Jan. 6 nu­clear test and Feb. 7 launch of a long-range rocket, both of which vi­o­lated pre­vi­ous U.N. res­o­lu­tions. The sanc­tions, agreed upon by Wash­ing­ton and Bei­jing, in­clude bans on North Korea's ex­ports of min­eral re­sources like coal, iron and rare earth min­er­als, as well as im­ports of avi­a­tion and rocket fuel sup­plies to the reclu­sive coun­try.

Out of North Korea's ex­ports es­ti­mated at $3.34 bil­lion in 2014, out­bound ship­ments of the banned ma­te­ri­als ac­count for 44.9 per­cent, the Korea In­ter­na­tional Trade As­so­ci­a­tion (KITA) said. The fig­ures for 2015 were not avail­able. Rev­enue from the coal trade was es­ti­mated at $1.14 mil­lion in 2014, or 34.2 per­cent, fol­lowed by iron ore and steel with 6.6 per­cent and 3.9 per­cent, re­spec­tively. The rest of the banned ma­te­ri­als such as gold, ti­ta­nium ore, vana­dium ore and rare earth min­er­als also showed thin trad­ing.

All of the coun­try's coal and iron ore was shipped to China from 2010 to 2014, which ac­counted for 97 per­cent of trade of banned ma­te­ri­als, the as­so­ci­a­tion said. The North im­ported $13.9 mil­lion of jet fuel from Bei­jing in 2014. If China stops oil sup­ply to the North, it could ef­fec­tively limit its air force's ex­er­cises, it said. "The U.N. sanc­tions de­prive North Korea of $1.5 bil­lion in rev­enue sources, which could se­ri­ously ham­per its econ­omy and in­dus­try if the mea­sures are pro­longed," the KITA said in the re­port. "North Korea is ex­pected to ex­pand ex­ports of non- sanc­tion items such as clothes, but un­sta­ble power sup­ply and the ban on cargo and fi­nances will make it hard to ship them overseas." For sanc­tion to be­come ef­fec­tive, the KITA stressed Bei­jing's role in abid­ing by the rules along with the in­ter­na­tional com­mu­nity. China, North Korea's eco­nomic life­line, has vowed to fully im­ple­ment the new U.N. sanc­tions on its re­cal­ci­trant neigh­bor.

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