From the Korea Herald:
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.
So where is that capital account surplus coming from to finance the trade deficit? It is NOT coming from South Korea.
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N. Korea trade dependency hits 40%