New U.N. sanctions to hit N. Korea hard if fully implemented: experts

By Kim Soo-yeon SEOUL, Feb. 26 (Yonhap) -- Proposed U.N. sanctions against North Korea, if fully implemented, are likely to deal a heavy blow to its moribund economy, as they would hit a key source of the North's hard currency, experts said Friday. The United Nations Security Council looks set to adopt a fresh resolution for what's called "the strongest set of sanctions in more than two decades" over the North's latest nuclear test and long-range rocket launch. It would require U.N. member states to conduct mandatory inspections of all cargo going into and out of North Korea and ban the exports of mineral resources, a main source of dollars for the cash-strapped North. Experts here said that the new measures, if faithfully enforced, are likely to severely hit the North's economy, which has posted some marginal growth in recent years. "The new sanctions can be called indiscriminate blows to North Korea as they would block inflows of hard currency and products to North Korea," said Lim Eul-chul, a professor at the Institute for Far East Studies of Kyungnam University. North Korea is already under U.N. sanctions for its nuclear tests in 2006, 2009 and 2013 and multiple missile tests. There is criticism that such sanctions have had limited impact on reining in North Korea's nuclear aspirations so far. The U.N. Security Council has been working on how to impose "stronger and more effective" sanctions on Pyongyang. The resolution would ban aviation fuel supplies to North Korea and its exports of coal, iron and other mineral resources. It would also slap financial sanctions targeting North Korean banks and assets. Seoul's Unification Ministry said that North Korea's exports of its minerals account for about 40 percent of its total outbound shipments. "If realized, such sanctions are likely to have a considerable impact on North Korea's earning of hard currency," said Jeong Joon-hee, a ministry spokesman, at a regular press briefing. The North's mining industry accounted for 13.1 percent of its nominal gross domestic product in 2014, the latest data available, according to South Korea's central bank. The North Korea Resources Institute in South Korea said in February that if new sanctions hamper North Korea's exports to China, the North's economic growth can fall by as much as 4.3 percentage points. The fresh punishment of banning aviation fuel supplies is also likely to deal a blow to Pyongyang, as North Korea relies entirely on imports for such oil needs, experts and officials said. "If the North's access to jet fuel is denied, the North Korean military's capability to engage in smaller-size battles would be crimped," said a military official, asking not to be named. South Korea has already joined efforts to cut off the source of dollars for North Korea by shutting down a joint industrial park in the North's border city of Kaesong on Feb. 10 in response to the North's provocations. The government said that 70 percent of the money that flowed into Kaesong Industrial Complex was funneled into the ruling Workers' Party of Korea (WPK) to bankroll its weapons development. Seoul is considering imposing tougher unilateral sanctions against the North as the UNSC is poised to slap punishments on it. Measures under review include an entry ban on vessels that have traveled through North Korea and taking a tighter grip on Seoul's existing punitive sanctions imposed in May 2010. South Korea has imposed sanctions prohibiting inter-Korean economic and other exchanges to punish Pyongyang for the sinking of a South Korean warship in March of that year. "The government is likely to review follow-up actions after the U.N. resolution will come out," ministry spokesman Jeong said. Experts said North Korea may make provocations on a small scale, given its track record, or take actions to water down the effects of the sanctions on the occasion of its key party congress. The North's ruling party is preparing for its first congress in more than three decades in May when North Korean leader Kim Jong-un will unveil new lines of policies and conduct a major reshuffle. "North Korea is focusing on preparing for the party event by pushing its people into working hard in a 70-day campaign of loyalty," said Yang Moo-jin, a professor at the University of North Korean Studies. "The North may try to turn over the situation by making an important announcement at the congress following the military provocations." sooyeon@yna.co.kr (END)