N. Korea trade dependency hits 40%

  • Published : Mar 30, 2010 - 12:53
  • Updated : Mar 30, 2010 - 12:53

The North Korean economy`s dependency on international trade is nearing 40 percent, a think tank reported yesterday.
According to the Korea Development Institute`s report on North Korea`s economy in the 2000s, North Korea carried out international trade worth $5.64 billion last year.
The cross border trade figure of $5.64 billion recorded last year is equivalent to about 40 percent of the North`s gross domestic product, which is estimated to be about $15 billion.
In the report, the KDI said that the figures show that North Korea`s economy, which the regime boasted as having the most independent structure in the world, is taking a form increasingly dependent on the outside world.
The report said that North Korea`s cross border trade volume has risen rapidly, mainly due to increasing imports, and that such developments have been essential to the country`s economic recovery.
Since 2000, North Korea has managed to post positive growth rates.
However, North Korea`s GDP per capita is thought to be hovering below figures recorded in the late 1980s and the early 1990s, before the country`s economic crisis began.
According to United Nation`s statistics, North Korea`s GDP per capita was between $600 and $700 for the 2007 to 2008 period.
In comparison, the country`s GDP per capita was ranged between $900 and $1,000 in the late `80s and the early `90s.
The KDI estimated that applying the rate at which the North`s GDP per capita has been increasing since 2000, the country`s GDP per capita is likely to be between $700 and $1,300 in 2012.
The report also said that although the North Korean authorities are moving back toward a more tightly controlled economy, the country`s is unlikely to meet the targets set for 2012.
In addition, the report said that recording a trade deficit of $1.5 billion last year -- equivalent to about 10 percent of its gross domestic product -- makes it appear that the country is going to have a hard time digging itself out of trouble by itself.

Of last year`s $5.64 billion trade figure, exports accounted for about $2.06 billion, while imports came in at more $3.57 billion. According to the KDI`s figures, the North`s cross border trading has been increasing at an average rate of 11 percent each year since 2000, when the figure was recorded at about $2.39 billion.
Along with the increase in trade volume, North Korea`s trade deficit has also increased rapidly since 2000.
Between 2000 and 2004, North Korea`s trade deficits were maintained below or just above $1 billion. However the figure rose sharply in 2005 to reach $1.38 billion in 2005.
The KDI said that the North`s authorities have been able to offset trade deficits through the large amount of overseas capital that has flown into the country since 2000.

By Choi He-suk