North Korean Economy Watch

According to Yonhap:

Trade and economic levels between South and North Korea remained quite wide last year, data showed Monday, pointing to prolonged lackluster business and economic conditions in the reclusive North.

According to the data by Statistics Korea, South Korea’s total trade volume stood at US$1.07 trillion as of 2012, which is 157 times larger than the North’s $6.8 billion. In particular, the South’s exports came to $547.9 billion, 188.9 times larger than those of the North.

The nominal gross national income (GNI) levels between the two Koreas also remained wide.

The GNI for the South was estimated at 1,279.5 trillion won ($1.21 trillion) last year, 38.2 times larger than the North, the data showed. On a per-capita basis, South Korea’s GNI was 18.7 times larger than that of the North.

South Korea also outperformed the North in infrastructure and other social overhead capital spending.

The South’s road network totaled 105,703 kilometers, which compared with the 26,114 km for the North, the data showed. The South had the power generating capacity of 81.8 million kilowatts a year, which is 11.3 times larger than the North.

The only category that the North outperformed the South was in coal production. It produced a total of 25.8 million tons of coal last year, about 10 times the amount of coal produced by the South, according to the data.

The two Koreas had a combined population of 74.4 million, with the South holding a population of about 50 million, the data showed.

The statistics agency has been providing such information on the North every year since 1995 as a way to provide a glimpse into the economic and industrial conditions of the reclusive country.

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Trade, economic gaps between 2 Koreas remain wide: data
Yonhap
2013-12-23

According to Yonhap:

Trade between North Korea and its major trading partner China rose 6.2 percent on year in the first 10 months of this year to total US$4.72 billion, data showed Wednesday, despite international sanctions against Pyongyang over its defiant nuclear and missile tests.

The rise suggested that North Korea is becoming increasingly reliant on China, although Beijing is not supportive of Pyongyang’s nuclear ambition.

In the 10-month period, North Korea’s exports to China jumped 12.3 percent on year to account for $2.36 billion, according to data by the China Customs Information Center. The North’s imports gained 1.8 percent to $2.36 billion.

Remarkably this data shows a perfect balance of trade between the DPRK and China (exports=imports). This is a reversal from earlier in the year when it was reported that DPRK – PRC trade volumes had fallen from the previous year. See previous posts on DPRK trade statistics here.

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Trade between N. Korea, China rise 6.2 pct in Jan-Oct despite sanctions
Yonhap
2013-12-4

According to Yonhap:

Inter-Korean trade has gradually been returning to normal levels following the reopening of a joint industrial park in North Korea’s border city of Kaesong in September, government data showed Sunday.

According to data from the Ministry of Unification and the Korea Customs Service, two-way trade between South and North Korea amounted to US$152.15 million last month. The amount is equivalent to 80.9 percent of total bilateral trade in the same month last year.

“Exports have grown with the entry of large amounts of raw materials, production facilities and food supplies as (the Kaesong complex) prepares to resume operations in earnest,” a ministry official said, speaking on condition of anonymity.

The complex, which ground to a halt in April amid high security tensions on the Korean Peninsula, reopened in September. Inter-Korean trade is limited to the joint factory park because all other economic exchanges have been banned since May 2010 due to North Korea’s sinking of a South Korean warship in March of that year.

“The Kaesong Industrial Complex is gradually recovering to previous levels,” the official said.

The complex, a key outcome of the first-ever inter-Korean summit in 2000, combines South Korean capital and technology with cheap North Korean labor to produce clothes, utensils, watches and other labor-intensive goods.

The project serves as a key source of cash for the impoverished country.

My compendium of stories related to the closure and reopening of the Kaesong Zone can be found here.

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Inter-Korean trade recovers following reopening of Kaesong complex
Yonhap
2013-11-24

According to Yonhap:

North Korea’s trade with China gained 4.4 percent from a year ago in the first nine months of this year, new data showed Tuesday, raising questions about the effectiveness of sanctions put in place to punish the North for conducting its third nuclear test earlier this year.

Trade volume rose to US$4.69 billion between January and September from $4.49 billion for the same period last year, according to the data released by the China Customs Information Center.

The data, seen by Yonhap News Agency, showed that North Korea’s exports to China jumped 9.4 percent to $2.09 billion during the nine-month period, while its imports from China fell 2.3 percent to $2.6 billion.

A South Korean diplomatic source in Beijing suspected that North Korea’s shortage of hard currency might be a factor for the decline in imports.

“North Korea’s lack of foreign currency may be partly attributable to the fall in imports of Chinese goods,” the source said on the condition of anonymity.

During the first nine months of this year, North Korea’s imports of Chinese crude oil, however, rose to 415,000 tons, compared with 402,000 tons for the same period last year.

China did not export crude oil to North Korea in June and July this year, but resumed crude exports in August, according to the source.

In August and September, China exported 165,000 tons of crude oil to North Korea, the source said.

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N. Korea-China trade up 4.4 pct in Jan.-Sept. despite sanctions
Yonhap
2013-11-5

According to Yonhap (2013-10-31):

North Korea’s population stands at 24.9 million, the 49th-largest in the world, a report by a United Nations fund showed Thursday.

According to “State of World Population 2013” published by the U.N. Population Fund (UNFPA), the North Korean population is expected to grow 0.5 percent in the 2010-15 period.

It said that boys born during this five-year period could expect to live an average of 66 years, while the female life expectancy was estimated at 73 years.

The latest findings also said a woman in the communist country is likely to give birth to two children, smaller than the overall average of 2.5 kids for the 202 countries checked.

The UNFPA said that 16 percent of the North’s population were between the ages of 10 and 19. This is just shy of the global average of 16.7 percent, although it is 3 percentage points higher than the comparable figure for South Korea.

In the number of people in the 10-19 age group, the North ranked 118th, with South Korea trailing far behind at 151st, the report showed.

The report said that despite various deprivations affecting the isolationist country, 100 percent of childbirths were assisted by trained medical personnel such as doctors, nurses and midwives.

The findings, meanwhile, showed the maternal death rate in the country at 81 deaths for every 100,000 births, while infant mortality rate reached 28 for every 1,000 children under the age of 5.

The population fund said it based its report on data provided by various U.N. organizations including the United Nations World Population Prospects.

The UN report can be found here.

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N. Korea’s population stands at 24.9 mln, 49th-largest in the world: report
Yonhap
2013-10-31

According to Yonhap:

North Korea’s crop imports from China more than doubled to hit a yearly high in September, data showed Wednesday.

According to the data compiled by Kwon Tae-jin, a senior researcher at the Korea Rural Economic Institute, North Korea imported 67,208 tons of grains and legumes such as flour, rice, corn and bean in September from its neighboring country, compared with 26,804 tons a month earlier.

The surge was attributed mainly to Pyongyang’s increased imports of corn. The impoverished nation bought a total of 50,613 tons of corn last month, nearly nine times the amount imported the previous month, the data showed.

“The big increase in imports would either mean that Pyongyang is running out of its stock amid the regime’s efforts to increase the ration to people since this spring or that it is try to stabilize market prices,” Kwon said.

“Factoring in the forecast of good harvests for the autumn, the North is expected to enjoy a relatively stable supply of crops at least for the rest of the year,” he added.

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N. Korea’s crop imports from China hit annual high in Sept.
Yonhap
2013-10-30

According to the Daily NK:

North Korea imported 386 high-end Swiss watches this year, it has been revealed.

According to the Federation of the Swiss Watch Industry, mechanical and digital watches with a combined value of US$76,000 were purchased by the North in 2013.

This figure represents a 50% decrease from 2012.

“North Korea purchases a very small number of watches, as the domestic market for watches is small,” Head of the Economy and Statistics Department at the Federation of the Swiss Watch Industry Philippe Pegoraro told Radio Free Asia on the 24th.

Some North Korea watchers have questioned if the reduced import volume reflects worsening economic conditions.

North Korea imported approximately 2000 Swiss watches in 2005, but this figure dropped precipitously to 26 the following year as a result of United Nations economic sanctions initiated in response to the North’s nuclear test.

Imports have been on the rise since 2007, with 450 watches imported in 2008, 660 in 2009 and 590 in 2011.

Kim Jong Eun is known to engage in “gift politics” by presenting watches and other luxury items in exchange for loyalty.

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Sharp Decline in Swiss Watch Imports
Daily NK
Jin Dong Hyeok
2013-10-25

According to Yonhap:

The International Federation of Red Cross and Red Crescent Societies (IFRC) said Wednesday that it plans to give US$7.15 million worth of aid to North Korea in 2014, up 7.8 percent from this year.

The organization also said in its updated 2012-15 long-term report that it will allocate $7.96 million for 2015 to help the communist country.

The report showed that the IFRC set aside $6.63 million to help the impoverished country this year, up from $4.40 million spent in 2012.

It said money will be spent on improving public health, sanitation and infrastructure to help the North upgrade its ability to cope with natural disasters.

The report added that Red Cross aims to help around 350,000 North Koreans who are vulnerable to disasters and poverty.

The IFRC, meanwhile, speculated that there were over 3.13 million North Koreans who were displaced form their homes, with 147 having lost their lives due to various natural disasters last year.

The North was hard hit by torrential rains and Typhoon Bolaven in the summer of 2012.

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Int’l Red Cross aid to N. Korea to rise 7.8 pct in 2014
Yonhap
2013-10-23

According to the UN World Food Program:

On the occasion of World Food Day (16 October), WFP has opened a new factory to produce nutritious biscuits in DPR Korea. Fortified foods, produced in 14 factories all over the country, are the backbone of WFP’s efforts to address undernutririon and fight hunger in the country for some 1.6 million women and children every month.

Speaking at the opening ceremony, Country Director Dierk Stegen said: “WFP is committed to fighting hunger worldwide. In DPRK, we work in close partnership with the government to reduce hunger and undernutrition in young children and their mothers by providing locally produced foods that are enriched with vitamins and minterals.”

Improved Efficiency

The Pyongsong Biscuit Production Line is replacing an existing biscuit factory in Haeju, as the equipment of that production line has become too old and too costly to replace. The Pyongsong Factory is strategically located, with a railway connection to Nampo port and easier access to nearby counties. The new factory will improve production efficiency, save transport costs and minimize the transport time of delivering the nutritious biscuits to 231,000 children at nurseries, kindergartens and schools in 12 counties.

Government Partnership

WFP and the Government of DPR Korea have been working together to produce nutritious foods enriched with vitamins and minerals in country since 1998. The Government contributes the factory infrastructure, staff support, and maintenance, utilities and overhead costs associated with the production, while WFP provides raw materials, spare parts, technical training and oversight of production and distribution.

Funding Needs

The Pyongson Biscuit Factory has the capacity to produce up to 294 metric tons of fortified biscuits every month – but this is dependent on contributions from donors. Currently, funding levels are such that production will cease at the end of February. For the next 12 months WFP needs to source US$80million to continue its work to provide assistance to the most vulnerable children and women in DPK Korea.

According to the Asahi Shimbun:

China is holding petroleum that was heading to North Korea from Iran in an apparent attempt by Beijing to maintain its control over Pyongyang, sources said.

According to Chinese sources, the petroleum was part of North Korea’s contract to import about 500,000 tons of condensate, a light oil, from Iran. North Korea, seeking to diversify its energy sources, started discussions on the deal last year.

The agreement was reached with the cooperation of a major Chinese state-run petroleum company.

The condensate is believed to have been shipped from Iran over a number of occasions on tankers registered to a third nation. But Chinese authorities ordered the tankers to stop when they reached the Chinese coast in the Yellow Sea this spring.

The ships were then towed to ports in Dalian, Liaoning province, and Qingdao, Shandong province. Sources said the condensate remains in those ports, which have restricted access to outsiders.

China is believed to have asked North Korea to pay about $2 million (about 196 million yen) for storage expenses.

“Once China realized that North Korea was beginning to depend on Iran for petroleum, China began using various measures to remain engaged so it can maintain its influence over North Korea,” a diplomatic source knowledgeable about relations between China and North Korea said.

Under the North Korea-Iran contract, Pyongyang is to pay Tehran for the condensate, but the condensate itself must be first sent to a Chinese state-run petroleum company.

“Because North Korea does not have the most advanced refineries, it had to ask China to refine the condensate,” a source in the petroleum industry said.

It is unclear what legal basis China is using for holding up the shipments because condensate and other petroleum products needed for daily living are not banned under U.N. economic sanctions imposed against North Korea.

However, one source involved in the transaction said, “As part of the economic sanctions that were imposed against military actions taken by North Korea, inspections were carried out by Chinese authorities, which asked that the petroleum be kept at the port.”

…

Until now, China is said to have provided about 80 percent of the petroleum used in North Korea. The main means of transport were through a pipeline that runs along the Yalu River between the border of the two nations as well as by ship.

According to Chinese customs statistics, the export volume was about 520,000 tons a year.

…

“Not only has a ban on petroleum export shipments been imposed by China, but the total import volume through the pipeline has also been reduced to one-third the level of the same period of the previous year,” a source involved in trade between China and North Korea was told by a North Korean government source in September.

China remains North Korea’s biggest backer, even with the contract with Iran.

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China holding up shipment of Iranian petroleum to North Korea
Asahi Shimbun
Koichiro Ishida
2013-10-20