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North Korea GDP Increased For Two Years

Posted May. 28, 2001 07:34,   


The North Korea`s Gross Domestic Production (GDP) has increased for last two consecutive years.

But as the economic differential between South and North has widened, the North economic scale recorded one-twenty seventh of that of the South in terms of the Gross National Income (GNI).

According to the estimation of the 2000 North Korea GDP, released from the Bank of Korea (BOK), the North Korea`s GDP grew 1.3 percent mainly due to the large growth in the construction and mining sections in spite of the stiff decline in the grain production(-15.0 percent). The North has recorded minus growth since 1990 when the Bank of Korea began to estimate, but turned to the plus growth since 1999 (6.2 percent) when it declared the open-economy policy.

For the estimation, the North`s production has increased in most sections such as mining, manufacturing, construction, and service industries. But in contrast, the grain production sank greatly due to the natural disasters like draught and flood. If the agricultural sector is excluded from the estimation, the GDP increased by 4.4 percent from the previous year.

Especially, the sharp increase of the mining industry (5.8percent) and the construction industry (13.6 percent) shows that the North has concentrated on expanding the Social Overhead Capital (SOC). The imports of capital goods such as power generation equipment, trucks, and excavators rose 46.9 percent, the total scale of foreign trade increased 33.1 percent year-to-year.

But in spite of the economic growth of the North, the economic differential between the two Koreas has widened greatly. The North Korea`s GNI amounted to 1/27.1of South Korea`s, expanded from 1/25.4 in 1999.

The per-capita GNI of last year also was estimated at $757, 1/12.7 of South Korea`s.

GNI reflects the pure income from the overseas in GDP.

Meanwhile, the trade scale of two Koreas has increased 27.5 percent from the previous year, recording $0.4 billion 250 billion. Non-transactional trade such as fertilizer aid has increased 24.1 percent, and the transactional trade has increased 38.7 percent.

Choi Choon-Shin, the director of national income statistical team of the BOK told that ``The open-economy has contributed considerably to the economic growth of the North. Even though the most production facilities of the North fell behind, if the North maintains the open-economy policy, its economy will keep growing.``

Lee Heon-Jin mungchii@donga.com