Economy

Declining North Korean Economy

North Korean economy has been badly impacted since the fall of the Soviet bloc in 1991. The impact is explicit in its average annual growth rate of -4.1percent from 1990 to 1998. This resulted in a drop of more than 50% in total production from the 1980s levels. There was a change of pace in 1999 when the economy showed signs of recovery. North Korea grew at an average rate of 2.2% from 2000 to 2005. There was a downturn yet again in 2006, and during the five-year period 2006 to 2010, only the year 2008 registered positive growth. The DPRK has inched up since 2011.

The gross domestic product (GDP) of North Korea is estimated to be $40 billion in 2015.

In terms of trade, China is North Korea’s main trading partner, according to the CIA’s World Factbook. Close to 86% of the region’s exports from North Korea are directed to China. The main exports are metallurgical products, minerals, manufactured products, textiles, and agricultural and fishery products. North Korea’s main import items are petroleum, cooking coal, machinery, equipment, textiles, and grain. More than 90% of the region’s total imports come from China. No wonder, China provides the region with concessional assistance and support but also accounts for the bulk of North Korea’s trade.

The economic history of North Korea portrays slowdown, stagnation, and crisis, with intermittent phases of recovery and sluggish economic growth. The regime’s priority to make Korea a defense economy has overshadowed development, food production, living standards, and human rights. North Korea lives in isolation and hardship. Its economy presents a dichotomized picture with nuclear armament on one side and starvation on the other.