KIEP Reported, ``North Korean Economy Fell into Pit of Poverty ``

An analysis result said that economy of North Korea fell into a `pit of poverty` from which they cannot revive without outside help. It also revealed that North Korea is eagerly trying to reestablish a relationship with EU to improve their economic situation.

Korea Institute for International Economic Policy (KIEP) said yesterday on the

North Korean economy by releasing a report called `EU’s Role toward Korean

Peninsular and Current Question`.

The report diagnosed ``North Korea are in a stage of encroachment of capital as their

domestic saving cannot fill in the capital’s depreciation. And North Korea fell into a pit

of poverty from which they cannot come out because the minus-growth continues.``

According to the report, recent improvement of North Korean economy for last two years is a temporary phenomenon in which the influx of foreign capital became a surplus after filling in the gap between domestic consumption and saving.

Park Joong-Hyun sanjuck@donga.com