Kim Jong Un’s ambitious 20×10 regional development plan is already running into problems. In addition to the shortage of common materials such as cement and wood, there is also a serious shortage of steel reinforcing bars.
On Apr. 4, a source inside the country said that rebar production at the Kaechon Steel Works in South Pyongan Province and the Nampo Steel Works has been declining due to the depletion of scrap metal compared with the rising demand for steel products.
Considering that North Koreans of all ages, sexes and occupations – from seven-year-old children to the elderly – are required to fill scrap metal quotas, a shortage of scrap metal in North Korea seems unlikely to this writer. In short, it indicates that the mobilization of the entire population has created a strange situation where not enough scrap metal has been collected.
Here, government policy is the biggest roadblock to collecting enough scrap metal. In the past, when there was a shortage of scrap metal, old facilities could be demolished, but now all old facilities are being used under the pretext of practicing “self-sufficiency,” making it extremely difficult for people to obtain scrap metal.
More broadly, North Korean government has made the terrible mistake of creating a system of steel production that relies on scrap metal. The authorities have been promoting a method of steel production that uses less coke, a raw component of steel, in the so-called “Juche steel” production process.
The country’s poor levels of steel production are closely related to North Korea’s emphasis on promoting the country’s nuclear weapons production. The authorities have diverted the funds needed to purchase coke to the construction of nuclear weapons. They also chose to emphasize the importance of Juche steel, which is cheaper and requires only labor and scrap metal to produce.
If the Workers’ Party of Korea had chosen to promote market capitalism and used the funds invested in nuclear weapons and missiles to import coke and produce high-quality steel instead, the North Korean economy could have overcome its current difficulties and even achieved growth.
For its part, “Juche steel” is very brittle because of its high carbon content. The authorities have tried to solve this problem by melting scrap metal and adding oxygen, but the scrap metal needed for this process has run out, leading to a decline in steel production.
The so-called “national defense economy,” which aims to sell weapons to Russia in order to buy rice and flour, is not helping the situation. According to the “2023 North Korea-China Trade Evaluation Report” published by the Korea Institute for Foreign Economic Policy at the end of February, North Korea has drastically increased its coke imports to 24,855 tons, triple the level of the previous year.
In other words, although North Korea has a sufficient base for effective steel production, the raw materials appear to have been sent to weapons factories to produce weapons for Russia rather than to improve the economy.
North Korean policymakers must answer the question of whether they will choose trade and cooperation through mutual trust, or persist with closed self-reliance. The authorities have a duty to struggle relentlessly to find ways to improve the economy, raise incomes and ensure a “happy life for the people.”
Translated by Annie Eun Jung Kim. Edited by Robert Lauler.
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