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Korea, North Economy 1996

    • Overview:
      More than 90% of this command economy is socialized; agricultural land is collectivized; and state-owned industry produces 95% of manufactured goods. State control of economic affairs is unusually tight even for a Communist country because of the small size and homogeneity of the society and the strict rule of KIM Il-song in the past and now his son, KIM Chong-il. Economic growth during the period 1984-88 averaged 2%-3%, but output declined by 3%-5% annually during 1989-92 because of systemic problems and disruptions in socialist-style economic relations with the former USSR and China. In 1992, output dropped sharply, by perhaps 7%-9%, as the economy felt the cumulative effect of the reduction in outside support. The leadership insisted on maintaining its high level of military outlays from a shrinking economic pie. Moreover, a serious drawdown in inventories and critical shortages in the energy sector have led to increasing interruptions in industrial production. Abundant mineral resources and hydropower have formed the basis of industrial development since World War II. Output of the extractive industries includes coal, iron ore, magnesite, graphite, copper, zinc, lead, and precious metals. Manufacturing is centered on heavy industry, including military industry, with light industry lagging far behind. Despite the use of improved seed varieties, expansion of irrigation, and the heavy use of fertilizers, North Korea has not yet become self-sufficient in food production. Indeed, a shortage of arable lands, several years of poor harvests, and a cumbersome distribution system have resulted in chronic food shortages. The collapse of Communism in the former Soviet Union and Eastern Europe in 1989-91 has disrupted important technological links. North Korea remains far behind South Korea in economic development and living standards. GDP is stagnant.

    • National product:
      GDP - purchasing power parity - $21.3 billion (1994 est.)

    • National product real growth rate:
      0% (1994 est.)

    • National product per capita:
      $920 (1994 est.)

    • Inflation rate (consumer prices):

    • Unemployment rate:

    • Budget:

        $19.3 billion

        $19.3 billion, including capital expenditures of $NA (1992 est.)

    • Exports:
      $1.02 billion (f.o.b., 1993 est.)

        minerals, metallurgical products, agricultural and fishery products, manufactures (including armaments)

        China, Japan, Russia, South Korea, Germany, Hong Kong

    • Imports:
      $1.64 billion (f.o.b., 1993 est.)

        petroleum, grain, coking coal, machinery and equipment, consumer goods

        China, Russia, Japan, Hong Kong, Germany, Singapore

    • External debt:
      $8 billion (1992 est.)

    • Industrial production:
      growth rate -7% to -9% (1992 est.)

    • Electricity:

        9,500,000 kW

        50 billion kWh

        consumption per capita:
        2,053 kWh (1993)

    • Industries:
      machine building, military products, electric power, chemicals, mining, metallurgy, textiles, food processing

    • Agriculture:
      accounts for about 25% of GDP and 36% of work force; principal crops - rice, corn, potatoes, soybeans, pulses; livestock and livestock products - cattle, hogs, pork, eggs; not self-sufficient in grain

    • Economic aid:

        Communist countries, $1.4 billion a year in the 1980s, but very little now

    • Currency:
      1 North Korean won (Wn) = 100 chon

    • Exchange rates:
      North Korean won (Wn) per US$1 - 2.15 (May 1994), 2.13 (May 1992), 2.14 (September 1991), 2.1 (January 1990), 2.3 (December 1989)

    • Fiscal year:
      calendar year

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