PYONGYANG, North Korea, Jan. 17 (UPI) -- Global sanctions have hit North Korea's foreign trade hard but analysts question the decline's significance, given the country's already small export volume.
Citing a report by the Korean Finance Corp. in Seoul, the Los Angeles Times reported the Communist country's trade in 2009 totaled $3.41 billion, down 10.6 percent from 2008 -- the largest annual decline since 1998, stemming from sanctions imposed in retaliation for the country's nuclear weapons program.
The situation on the Korean Peninsula has worsened with the sinking of a South Korean warship in May 2010 and the November shelling of a South Korean island in which four people died. South Korea had been the North's major trading partner.
Analysts told the Times as the North faces fewer options for trade, it is forced to rely more on China, its neighbor and closes friend.
The decline in trade would be painful for North Korea "but not lethal," East Asian economy Professor Rudiger Frank at Vienna University told the Times.
"North Korea's trade levels are already so low the drop should not be overemphasized," he said.
Jeong Hyung Gon at Seoul's Korea Institute for International Economic Policy said the North Korean regime faces a tough time ahead.
"They know that to turn things around, they cannot simply rely on China," he said.
Frank said he believes the North is relying less on weapons exports and more on selling raw materials, with infrastructure assistance from China.
"Of all the minerals of the world, research shows that only lead and tin are missing in North Korea," he said. "They have the stuff other nations are interested in. And China is helping the north get them out of the ground."