Positive Economic Growth in North Korea for Four Years Consecutively

The economy in North Korea has shown a positive growth rate in the last four years with economic support from South Korea.

However, it has been found that the industrial structure of North Korea still primarily consists of 30% agriculture, forestry and fishery businesses, so thus still lingers around the level which South Korea was at the end of the 1960s.

The Bank of Korea clarified through the report `2002 Presumptive Result of the Economic Growth Rate of North Korea` on June 4 that the North Korean economy has increased by 1.2% with favorable conditions in agriculture, forestry, fishery and construction, thus continuing to see increases in the last four years since 1999.

Specifically, the industries of agriculture, forestry and fishery have increased by 4.2% compared to last year with the favorable weather conditions and fertilizer support from South Korea and as for the construction industry, it experienced a growth of 10.4% due to an increase of constructing residential buildings.

Nevertheless, the mining industry depreciated by 3.8% due to power supply shortages and deteriorating equipment. The manufacturing industry has also decreased by 2.0% because of the depressed production of the heavy chemical industry.

The economic scale of North Korea (GNI) is 2.24 billion dollars, which is 1/28 of Korea`s GNI and the national income per head in North Korea is 762 dollars, which is 1/13 of South Korea`s figure.

The trade scale between South and North Korea was recorded at 64 million dollars, thus has increased by 59.3% compared to the previous year and occupying 28% of the overall trade scale of North Korea. South Korea`s exports to North Korea increased by 63.2% by providing food credit and materials as well as equipment needed in connecting railroads and roads.

Also, South Korea`s imports from North Korea increased by 54.2% as the processing on commission trade and commercialized transactions of agricultural products activated. North Korea`s exports increased by 13.1% but the import decreased by 5.9%, thus the overall trade scale decreased by 0.4% compared to the previous year. It was found that there was a decrease in imports has been due to shortened voluntary support for international society due to worsened international relations.

The Bank of Korea forecasts that the economic reformation management of North Korea announced in July 2002 has not been able to lead to an increase in production in overall industries due to a chronic shortage of supplies as well as worsening foreign economies. Simply, the reformation management plan of North Korea just has motivated laborers to activate the light industries and the commercial circulation divisions, the Bank of Korea analyzed.

Kwu-Jin Lim mhjh22@donga.com