N. Korea's Economy Only 1/28 of S. Korea's
2003-06-05
Communist North Korea posted gross national income (GNI) of 21.33 trillion won in terms of the South Korean currency in 2002, up 5.1 percent from a year ago. The figure represents only 3.6 percent, or one-28th, of South Korea's GNI of 596.88 trillion won, the Bank of Korea said Thursday.
During the period, per capita GNI for North Korea reached 954,000 won, just 7.6 percent of its southern counterpart's 12.52 million won. North Korea's population was estimated at 22.36 million in 2002, up from 22.25 million in 2001, nearly half of South Korea's 47.64 million.
North Korea's foreign trade is about 0.7 percent of South Korea's annual trade.
North Korea traded $2.26 billion worth of goods and services with other countries in 2002, down 0.4 percent from $2.27 billion the previous year. Imports dropped 5.9 percent despite the 13.1 percent hike in exports.
The decrease in imports was mainly attributed to the drop in the international community's free donations to North Korea.
The North's main imported goods were cereals, construction equipment, industrial facilities and mineral fuels, while its main exports were marine products and textiles.
In the meantime, the amount of inter-Korean trade reached $640 million in 2002, up 59.3 percent from a year before, owing to an increase in South Korea's food aid to the North.
North Korea's economy grew 1.2 percent last year, down from 3.7 percent in 2001.
According to the BOK, the North's economy contracted since 1990 but experienced growth of 6.2 percent in 1999 for the first time in a decade and 1.3 percent in 2000.
North Korea's economic growth was led by the agriculture, forestry and fishery industry and construction industry, which grew 4.2 percent and 10.4 percent, respectively.
Despite the economic growth for the past four years, North Korea faces serious problems such as lack of food and energy along with inflation triggered by economic reform measures implemented on July 1 last year.
''The slowdown in growth was due to the decreases in the factory operating rate caused a by lack of energy,'' Korea University's North Koreaology professor Nam Sung-wook said.
''Following North Korea's nuclear threat last October, the U.S. halted its free supply of crude oil to the North last November,'' he added. The North had received the fuel aid from the U.S. in exchange for not pursuing a nuclear program.
The central bank pointed out that the communist nation has not changed its price-setting policy even after dramatically raising prices and wages through the economic reform measures, which has led to rising inflation pressure.
Following the measures, the North hiked prices of rice and corn by 538 times and 471 times, respectively, while raising power rates 60-fold, according to sources. In addition, the North also increased laborers' average wage by 18 times to 2,000 won from the previous 100-150 won.
In April, rice was priced at 185-195 won, increasing from 130-150 won in February this year and 44 won in July last year. Prices of used color TVs and bicycles stood at around 80,000 won and 40,000 won, respectively, while the price of shoes reached as much as 4,000 won, double a worker's average monthly income.
Park Suhk-sam, chief economist of the North Korean economic studies team at the central bank, said the North Korean economy has shown signs of slight improvement over the past few years but is still in bad shape due to lack of food and power.
''Currently, the North's economy relies heavily on external aid. Accordingly, if foreign aid is suspended completely, it is probable that North Korea will face economic collapse,'' he added.
Source : www.korea.net
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