North Korea’s attempt to build an enormous shipyard proved that in this era of international sanctions, it’s hard to tell what’s going on there: A former U.S. diplomat was able to visit the site in September and then contact a North Korean fishing boat which had been recently held in Japan.
An economy in its infancy in 2012, North Korea issued a massive order to build a ferry and coastal shipyard to support an industrial zone along the Tumen River that runs between North Korea and China. The state said the Kaesong Economic Zone would provide jobs and even an offshore fishing industry.
The order included plans for a floating hotel, barge ferries, a fleet of special vessels and surface-hulled sea ships, as well as factories and monohull and suezon fast ferries. The plan called for the largest of all the berths to be comprised of 65 giant barges, each capable of carrying 5,000 tons of cargo.
The United Nations imposed a sanctions on North Korea, including a ban on ship-to-ship transfers of fuel, in response to Pyongyang’s nuclear and missile programs. China, North Korea’s largest economic partner, agreed to implement an even more serious ban on sales of coal, iron ore and seafood to the regime. A panoply of other measures sought to cut off revenue and hard currency from sectors critical to Pyongyang’s ability to launch new weapons.
The U.S. is also working toward the full implementation of what is called the Annex of the 1718 UN Arms Embargo, which bans the sale of military equipment, but is widely assumed to have exemptions for political reasons.
The U.S. State Department has long warned the Russians to halt work on the North Korean ferry. Last year, the U.S. ambassador to the United Nations, Nikki Haley, called for a moratorium on all ship-to-ship transfers of fuel to and from North Korea. Russia subsequently promised to do the same.
In September, U.S. officers traveled to the North Korean area. U.S. officials told Fox News that at that time they noticed “nothing out of the ordinary,” saying they had previously boarded a North Korean fishing vessel and several vessels believed to be carrying banned goods.
North Korea already does not have sufficient operating and refrigeration capacity for so much energy-intensive raw materials, said Elizabeth Economy, a fellow at the Center for Strategic and International Studies. The country is also dependent on coal and oil imports from China and Russia.
“It’s clear that they are not going to have the economies that they need to feed and to house people if they keep building ships that are not needed,” Economy said.
North Korea’s industrial development is centering on the market to export fertilizer, grain and other agricultural commodities in exchange for relatively large cash payments. The cash comes in part from trade with Russia and China, as well as limited exports of primary commodities like sugar and cigarettes.
“At the basic level the stakes are that so much needs to go on, and for their basic survival they’ve made investments on such an enormous scale,” said Stephen Coomer, a professor of applied economics at Rice University.
Trump has called for China to use its economic leverage on North Korea and according to “The New York Times,” U.S. officials are examining China’s role in the financing of the North Korean shipbuilding industry, after State Department officials told the newspaper that China helped finance a contract that was ultimately canceled by North Korea’s government. The Times said that the State Department was investigating further, but the FBI declined to comment on the report.
Fox News’ Shannon Bream and the Associated Press contributed to this report.