Australia’s prime minister went to his Pentecostal church Sunday after nailing a surprise victory Saturday in the country’s general election.
Polls had indicated that Scott Morrison and his conservative Liberal-National coalition government were sure to loose.
The polls, however, were wrong.
Morrison was swept back into office, leaving the pollsters and the opposition Labor Party scratching their heads wondering how they miscalculated the odds.
“I have always believed in miracles,” Morrison told a cheering crowd Saturday.
U.S. President Donald Trump, whose presidential victory was also a shock to pollsters and the U.S. Democratic party, called Morrison to offer his congratulations. The White House said “the two leaders reaffirmed the critical importance of the long-standing alliance and friendship between the United States and Australia.”
By all accounts, North Korea’s cash-strapped economy is flagging under crippling international sanctions and the slowdown means the traditional elite and a rising merchant class may be feeling pinched, experts say.
“The elites in Pyongyang are really feeling it,” said Joshua Stanton, a Washington attorney who helped draft the North Korean Sanctions Enforcement Act in 2016.
“They’re having a very tough time right now. I think they’re losing their wealth rapidly. And they’re concerned about the government’s policies and directions, and the failure to get sanctions lifted in Hanoi,” he continued.
People walk beneath portraits of late leaders, Kim Il Sung, left, and Kim Jong Il, in Pyongyang, North Korea, April 18, 2017.
North Korean aristocrats
The most privileged government and military officials, considered North Korea’s aristocrats, are estimated to number about 2,000 people. Born into families who backed the country’s founder, Kim Il Sung in the 1940s and 1950s, they are fiercely loyal to the Kim dynasty, said William Brown, former CIA analyst and a North Korea economy expert.
Despite their fealty to current leader Kim Jong Un, this top echelon of what is supposed to be a classless society is losing money. The state-run enterprises they control in the centrally planned socialist economy — heavy industries such as mining and light industries such as textile and clothing factories — have been hit hard by the sanctions that President Donald Trump refused to lift at the Hanoi summit earlier this year, demanding that North Korea agree to full denuclearization as a precondition for relief.
Similar to oligarchs or private entrepreneurs and capitalists by the Western standards, the donju emerged from the market economy, which grew out of the country’s worst famine in the 1990s as workers, paid by the state in food rations, started trading whatever they could find for food on black markets. The markets established in a time of shortages were legitimized, then encouraged under Kim. Today, the donju partner with the elite families, providing funds for construction projects such as building apartments in Pyongyang while the families provide labor, usually workers they re-assign from state-owned enterprises.
North Korean Leader Kim Jong Un visits Taesong Department Store just before its opening, in this photo released April 8, 2019 by North Korea’s Korean Central News Agency.
“The donju touch on about just everything, everything from construction to manufacturing to things happening in the markets to transportation issues,” said Ken Gause, director of the International Affairs Group at the Center for Naval Analyses.
“Right now, they’re under increasing pressure in terms of … getting the hard currency that they need in order to continue to do various projects that they do inside North Korea, which allows them to maintain their influence that they have within the regime and on the society,” he added.
Limiting luxuries, confiscating wealth
Unlike ordinary North Koreans, members of these privileged classes enjoy a luxurious lifestyle. Some drive imported cars. Some occasionally travel abroad. Others send their children to the country’s prestigious Kim Il Sung University, Kim Jong Un’s alma mater.
But as the government runs ever shorter on hard currency, it’s confiscating their wealth.
“[The] North Korean government has always historically used a lot of its money to keep those people happy,” said Stanton, listing gifts of luxury goods, apartments and “access to … material wealth.”
But that’s changing, Stanton said, “because the government is running out of money, it’s doing a lot of anti-corruption investigations and inspections. It’s trying to find their money, their savings, any cash that they have stored away, any bank accounts that they have in China, any wealth that they’ve accumulated.”
The overall lack of cash and the government’s confiscation of what it finds among the elite are creating discontent but not so much as to trigger organized unrest.
“They could put pressure on Kim definitely,” Brown said. “But [as] more of a loyal opposition rather than a radical opposition. I think … the most likely unrest would come from workers, state enterprise laborers, miners, people who are working for the state and who are barely being paid at all, and have to go into the marketplace to make a living.”
FILE – In this Sept. 9, 2016, photo, a man watches a TV news program reporting North Korea’s nuclear test at Seoul Railway Station in Seoul, South Korea. North Korea has conducted five nuclear tests at its Punggye-ri site, the first in 2006.
A ‘mounting toll’
In October 2006, the U.N. Security Council (UNSC) imposed sanctions on North Korea in response to Pyongyang’s first nuclear weapons test. They were designed to pressure North Korea into ending its nuclear ambitions by banning sales to Pyongyang of heavy weaponry, missile technology and material, and select luxury goods, according to a Council on Foreign Relations backgrounder. In March 2016, the UNSC sanctioned sales of aviation fuel to North Korea after its fourth nuclear test.
Since November 2016, after Pyongyang’s fifth nuclear test, the UNSC has aimed sanctions at North Korea’s economy by banning its export of key commodities such as copper, coal, seafood, textiles and labor.
The sanctions were aimed at cutting off foreign currency flowing into the country — most of the wages paid to North Korean workers contracted to work overseas ended up in Pyongyang — and the UNSC capped North Korea’s imports of the crude oil and refined petroleum that the country needs to sustain its economy and run the military.
Since Trump took office in 2017, the U.S. has issued its own set of sanctions through the so-called “maximum pressure campaign,” which blocks from the U.S. financial system any foreign business or individual involved in trade with North Korea, and exposes any assets of the foreign businesses or individual to seizure by the U.S. government. Last week, U.S. officials seized a North Korean ship allegedly used in the illegal coal trade.
Undated photo released by the U.S. Justice Dept. on May 9, 2019 shows the North Korean cargo ship ‘Wise Honest’.
“I’m convinced that the international and other sanctions on North Korea are taking a mounting toll on [North Korean] economy,” said Evans Revere, former State Department official in the George W. Bush administration.
“The pressure from sanctions and related measures may not now be enough to destabilize the regime,” he added, “but if these measures remain in place, and especially if more sanctions and other measures are applied, they have the potential to do so.”
Economic growth impaired
According to a report on 38North, a website devoted to analyzing North Korea, the growth rate of the country’s economy in 2018 was 4.6%, the lowest since 2006, based on the assessment it made from the data on North Korea’s 2019 budget reported at its parliamentary session in April.
“This corresponds with Western reports on sanctions, especially those issued since 2017, having an impact on North Korea’s economy,” the report said.
Troy Stangarone, senior director at the Korean Economic Institute, said, “Kim Jong Un does face a dilemma” of how long he can “continue on the current path without sanctions relief.”
“What we have now is a situation where North Korea’s heavy industry appears to be collapsing,” Stanton said. “The effect of this is going to become more noticeable in the coming weeks and months.”
North Korea is currently facing a food crisis with more than 10 million people estimated to be without enough food to last until next year, according to a U.N. report on the country’s food security issued earlier this month.
“It allows people to get off the official economy, the economy that is controlled by the state, which has basically dried up early since the ’90s, into the 2000s, and the 2010,” Gause said. “That part of the top-down economy has been weaker and weaker, and the markets have basically filled in the gaps.”
Stangarone said, “As long as North Korea’s able to control the flow of information and maintain control of the population, I think this shift towards marketization is probably permanent.”
Gause said, “If [Kim] is not able to show progress on [economy] … either one, he’s got to re-engage in diplomacy with the United States and see if he can get sanctions relief there or he has to potentially go toward more brinkmanship in order to try to reset the chess board.”
The U.S. State Department has cleared $314 million in possible sales of air defense missiles to South Korea, the Pentagon said, as tensions re-emerge on the Korean Peninsula.
South Korea, a key Asian ally of the United States, asked to buy up to 94 SM-2 missiles used by ships against air threats, along with 12 guidance systems and technical assistance, for a total cost of $313.9 million, the U.S. Defense Security Cooperation Agency (DSCA) said on its website. The agency, a unit of the Department of Defense, delivered certification on Thursday notifying Congress of the possible sale.
The proposed sale, announced Friday by the Pentagon, comes after North Korea recently criticized South Korea’s defense purchases from the United States, including the arrival of the first F-35 stealth aircraft.
With denuclearization talks stalled after a second summit between North Korea and United States broke down in Hanoi in February, North Korea went ahead with more weapons tests this month.
The reclusive North and the rich, democratic South are technically still at war because their 1950-53 conflict ended in a truce, rather than a peace treaty.
South Korea already uses SM-2 missiles developed by Raytheon Co., but is building more missile defense-capable destroyers equipped with the weapon.
North Korea has boasted about its indigenous surface-to-air missiles.
Separately, Japan, another key U.S. ally in the region, was also cleared to buy $317 million worth of medium-range air-to-air missiles from Washington, the DSCA said.
North Korea has asked United Nations Secretary-General Antonio Guterres to deal with the “illegal” seizure of one of its cargo ships by the United States, state media said Saturday.
“This act of dispossession has clearly indicated that the United States is indeed a gangster country that does not care at all about international laws,” the North Korean ambassador to the United Nations said in a letter sent to Guterres dated Friday, according to North Korea’s KCNA news agency.
Pyongyang’s protest to the United Nations over the seizure comes amid mounting tensions since a second summit between North Korean leader Kim Jong Un and U.S. President Donald Trump, aimed at bringing about the denuclearization of the North, broke down in Hanoi in February.
The letter also called for “urgent measures” by Guterres and claimed that Washington infringed the North’s sovereignty and violated U.N. charters.
With the denuclearization talks stalled, North Korea went ahead with more weapons tests this month. The tests were seen as a protest by Kim after Trump rejected his calls for sanctions relief at the Hanoi summit.
North Korea has said the ship seizure violated the spirit of the summit and demanded the return of the vessel without delay.
The U.S. Justice Department said the North Korean cargo ship, known as the “Wise Honest,” was seized and impounded to American Samoa. The vessel was accused of illicit coal shipments in violation of sanctions and was first detained by Indonesia in April 2018.
WHEN KOREANS meet a new acquaintance, one of the first questions they ask is, “How old are you?” What may seem surprising or even rude to foreign visitors is necessary to comply with Korean standards of politeness. The language has a multi-tiered system of honorifics. How you address somebody depends on their status, which is determined first and foremost by age, though sex and professional standing also play a role. Getting it wrong can be awkward.
Getting it wrong is also easy, given the country’s confusing mix of systems for calculating age. To start with, most Koreans consider babies one year old when they are born. What is more, everyone collectively turns a year older on January 1st. This used to happen on lunar New Year, which falls about a month later, when people still eat a bowl of beef soup with rice cakes in celebration. (Babies marking their second birthday despite having been born only weeks before have milk.)
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The “Korean age” calculated in this way has traditionally been more important than the Western-style age recorded on people’s passports. Many older Koreans do not even know their birthdays. To add to the mess, yet another method is used to determine whether someone is old enough to drink alcohol, or when they should perform military service: their birth year is subtracted from the current calendar year, so a person born on January 1st is considered the same age as someone born 364 days later.
All this not only confuses visitors but also stymies bureaucrats, who are often uncertain which number to use for what purpose. Popular apps designed to convert one type of age into another help the numerically challenged, but hardly clarify the rules. Studies suggest that most Koreans would prefer a simpler system.
Some politicians have decided that the way forward is rejuvenation. Earlier this year a group of lawmakers submitted a bill to abolish the Korean way of measuring age for administrative purposes. The National Assembly has yet to consider the proposal. If it is approved, the whole country could become a year or two younger at the stroke of a pen—a handy trick in a fast-ageing society.
ASLAN SAGUTDINOV had a hunch. The authorities in Kazakhstan are so intolerant of dissent, he reasoned, that it does not really matter what protesters write on their placards. Simply holding up a sign of any sort is considered subversive enough to merit arrest. After all, two democracy activists, Asya Tulesova and Beybaris Tolymbekov, had been arrested in April for unfurling a banner at a marathon in Almaty, the financial capital, that read “You cannot run from the truth #forafairelection #Ihaveachoice”. They were jailed for ten days for breaching rules on public assembly, even though the authorities insist that the presidential election on June 9th will be fair, and that people will have a choice.
To test the government’s paranoia, Mr Sagutdinov stood in the middle of the city of Uralsk and held up a big blank sheet of paper. Sure enough, the police took him into custody. They could not think of anything to charge him with, however, so they soon let him go. A police spokesperson later helpfully explained that Mr Sagutdinov had been detained not for holding up a piece of paper, but for the opinions he expressed as he did so.
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The protesters at the marathon and Mr Sagutdinov have spawned a series of imitations. A man who hung a banner quoting the constitution over a road in Almaty was briefly jailed, then fined. A schoolboy in Nur-Sultan—the capital, which was recently renamed in honour of Nursultan Nazarbayev, the septuagenarian former president—staged a blank-paper protest of his own. Activists have been posting photographs of themselves on social media holding up nothing at all. People frustrated with three decades of authoritarian rule have also held small street protests to demand democracy. Many have been arrested; some have been jailed for short spells.
The authorities are especially touchy at the moment because Kazakhstan, an oil-rich former Soviet republic of 18m, is in the midst of a delicate transition. Mr Nazarbayev resigned in March after three decades in charge. The election is being held to affirm his chosen successor, Kassym-Zhomart Tokayev, the interim president.
Mr Nazarbayev’s support in elections varied wildly, from a meagre 81% to a respectable 98%. It helps that he never had to face a credible opponent. One potential rival shot himself twice in the chest and once in the head, police say. Another was disqualified for taking part in an illegal protest, as it happens. Others boycotted the polls as stitch-ups. This time, however, the authorities have allowed a candidate with a record of political opposition to register. No one expects Amirzhan Kosanov to be allowed to win. Many fear he will simply legitimise the election, while toning down his criticism of the powers-that-be. It is not even clear whether his supporters will be allowed to hold up placards.