North Korean Economy Watch

Radio Free Asia
Junho Kim
10/6/2009

North Korea is launching a crackdown on official corruption in its key mineral export sector, a crucial source of foreign exchange for a country where millions go hungry and the ruling party has total control of resources.

“[North Korea] is currently restructuring mineral exporting companies, because such trading entities have been found to be corrupt and inefficient and involved in various abuses,” said the China-based representative of a company importing minerals from North Korea.

The source added that many importers dealing with North Korean exporters had been negatively affected by their lack of professionalism and reliability.

“The overwhelming majority of North Korean trading companies are involved in exports of minerals, so the need to revamp them is evident and understandable,” the source said.

More than 58 percent of North Korea’s U.S. $1.13 billion exports in 2008 consisted of minerals and mining products.

The restructuring would target companies with unexplained gaps in their financial accounts and those that embezzled funds during the export process, the China-based source said.

Investigation slows exports

North Korea is a key source of magnesite, a mineral used in steel-making, synthetic rubber production, and the preparation of magnesium chemicals and fertilizers.

A China-based ethnic Korean businessman surnamed Nam said Chinese importers are having trouble filling orders for molybdenum, a metal used to make heat-resistant aircraft parts, electrical contacts, industrial motors and filaments.

“For about a month, discussions on imports of molybdenum from North Korea to China were suspended at the request of the North Korean authorities, who asked their Chinese counterparts to be patient and wait a little more,” Nam said.

In an attempt to further tap abundant mineral resources, the authorities are attempting a clean-up of the mineral export sector, the China-based source said.

Following an investigation of corrupt and inefficient mineral-exporting North Korean companies, export quotas might be assigned to such companies, and those found guilty of abuse could be imprisoned, the source said.

Swiss-based mining venture Quintermina was recently formed to secure magnesia materials from North Korea, the company said on its Web site.

It said the magnesite resources of North Korea, an extension of the magnesite-talc belt from the northeastern Chinese province of Liaoning, China, are estimated at 3 billion tons, and capable of producing around 100,000 tons per year.

According to Yonhap:

Trade volume during the January-June period totaled US$1.1 billion, down 3.7 percent from a year earlier and the first decline since 1999, the Korea Trade-Investment Promotion Agency (KOTRA) said in an emailed release that cited official Chinese data. The drop was in striking contrast with a 41 percent increase during the same period last year and a 16 percent gain in 2007.

North Korea was put under U.N. sanctions for its nuclear test in May, barring its weapons trade and strictly limiting cash flows into the country. The sanctions, however, do not appear to have affected North Korea’s trade with China, an official at South Korea’s Unification Ministry said.

Prices of crude oil, which account for a quarter of North Korean imports from China, subsided this year after steep hikes in 2007 and 2008, said Jeon Dong-myeong, a ministry official overseeing North Korean trade.

“It’s not a steep decline. The 3.7 percent decline in trade volume can arise from price differences,” Jeon said.

North Korean imports from China amounted to $750 million, down 8.4 percent, while exports increased by 8.2 percent to $352 million, according to KOTRA.

By item, North Korea’s crude oil imports showed the steepest decline of 54 percent, or $111 million.

Food imports slightly increased to $23 million, and fertilizer imports considerably grew to $11.9 million, close to the amount the North brought in during all of 2008, $12.7 million.

Despite the international sanctions on the country, North Korea’s trade with Germany gained by 46.53 million euros during the first half of this year, according to KOTRA. Citing Germany’s figures, it said trade volume was up 160 percent from the same period last year, and up 30 percent from the total trade volume the two countries registered for last year.

Read the full story here:
N. Korean trade with China falls slightly in first half of 2009
Yonhap
9/23/2009

Further information and requests:
1. Here is the PR of China’s Ministry of Commerce database where trade data is published (does not work well with Mozilla). The usual caveats apply.

2. I have given up on the KOTRA web page.  Can someone please send me the KOTRA email mentioned in the Yonhap story?

3.  Here are general stories about North Korea’s trading activities. Here are stories mentioning specific trade statistics.

(h/t to H. Williams) Preliminary numbers from the UN-funded and administered DPRK census have been published.  According to the UN, the DPRK’s population as of October 2008 breaks down as follows:

Click on image for larger version, or better yet, see the results in the original PDF here.

Here is some more information from the Choson Ilbo:

The United Nations Population Fund announced a few days ago that a two-week census study conducted on North Korea in October of last year showed the country’s population as being 24.05 million people. That finding went against the forecasts of experts that North Korea’s population would have dropped from 21.21 million in 1993 to less than 18 million, due to a prolonged economic slump. Until 1993, North Korea had suppressed childbirth. But starting in 1996, when more and more people began starving to death, North Korea has been promoting childbirth by prohibiting abortions and offering special support payments to families that have many children.

North Korea also suffered from a concentration of its population, with 40 percent of its total population living in the Pyongan provinces. More than 4 million people live in South Pyongan Province, 3.26 million in the capital Pyongyang, and 2.73 million in North Pyongan Province. Unlike South Korea, there were 600,000 more women than men. But North Korea is said to have requested the UNFPA to keep the data under wraps. That was because of the breadth of the information contained the latest study, from details on individuals to data on incomes, the items owned by households, and even the availability of bathrooms, heating, tap water and sewage processing facilities.

The reason why North Korea had no choice but to agree to the information being unveiled was because South Korean capital and know-how was used to conduct the survey. According to a request by the UNFPA, South Korea footed $4 million of the $7 million spent to conduct the census, while the South’s National Statistical Office offered the method and technique used to conduct the census. As a result, the UNFPA mobilized 35,200 North Korean census takers and conducted house-to-house surveys on 5.89 million homes.

The UNFPA considered it “interesting” that North Korea had unveiled the results of the census to the world. Sultan Aziz, head of the UNFPA’s Asia-Pacific division, appeared on Voice of America and said North Korea unveiled itself to the world because it knew that it must first take a close look at itself in order to develop its own economy. That is why there are forecasts that North Korea will soon turn to the international community for help. The results of a detailed census, including the infant mortality rate and average life expectancy, due out in the first half of this year, will deliver more of a shock to North Korea than anyone else.

The third edition of the SAIS U.S.-Korea Yearbook chronicles important developments in North and South Korea that characterized their relations with their allies and enemies in 2008. Each chapter was written by SAIS students in the course, “The Two Koreas: Contemporary Research and Record,” in the fall of 2008. Their insights were based not only on extensive reading and study, but also on numerous interviews conducted with government officials, scholars, NGO workers, academics and private sector experts in both Washington and Seoul.

The Yearbook is divided into two parts: South Korea’s Foreign Relations and North Korea’s Foreign Relations. In the first part, student authors explore the dynamic foreign policy changes that were brought about by the Lee Myung-bak administration, and how these policies affected South Korean politics both at home and abroad. In the second part, student authors explore how shifting power dynamics both in the United States, as well as among the member states of the Six-Party Talks, affected North Korea’s foreign relations in 2008.

Here are links to the North Korea chapters:
Chapter 6:  The Torturous Dilemma: The 2008 Six-Party Talks and U.S.-DPRK Relations, by Shin Yon Kim.

Chapter 7:  U.S. Alternative Diplomacy towards North Korea: Food Aid, Musical Diplomacy, and Track II Exchanges, by Erin Kruth.

Chapter 8:  North Korean Human Rights and Refugee Resettlement in the United States: A Slow and Quiet Progress, by Jane Kim

The US Korea Institute has also published a New Working paper:

“State Over Society: Science and Technology Policy”
Download Here
ABSTRACT: Since the late 1990s, the Kim Jong Il regime has laid an explicit emphasis on the role of science and technology (S&T) as an instrument of national power. Facing external security challenges, domestic economic stagnation, and rising political uncertainty stemming from the succession issue, North Korea has sought greater scientific and technological development for national revival. Yet few analysts have interrogated the contours of North Korea’s S&T policy or explored its dilemmas for the regime in Pyongyang. Considered a means of modernization, S&T strikes at the heart of manifold dilemmas facing the North Korean leadership as technology poses formidable challenges to the maintenance of political control by introducing new pressures to the balance of power between state and society. In this paper, Rian Jensen, a former USKI Student Fellow, identifies the goals of North Korea’s S&T policy, outlines its mode of implementation, assesses how science and technology is recalibrating North Korean state-society relations, and identifies key policy implications for the US government.

Using the STALIN search engine I found the 1997 KCNA articles which claim that “natural phenomena” are signs of future prosperity in the Kim Jong il era.  All the stories are posted below. 

Here are the dates  and brief summaries of the stories:

1. 3/21/1997 –Weather protects KJI.  Sunshine pours dowm on him for photo.
2. 9/29/1997–Flowers bloom on trees when KJI nominated SG of KWP.
3. 10/1/1997–Flowers and leaves bloom on trees.
4. 10/6/1997–KJI makes fog go away, fruit trees blossom.
5. 10/7/1997–Friut trees and flowers blossom – sign of good fortune under KJI.
6. 10/20/1997–Twenty-five consecutive days of beautiful sunrise at Mt. Paektu and sounds of cheers from Lake Chon when KJI nominated SG of KWP.
7. 12/8/1997–KJI visit brings good weather.

After 1997 we see only two more stories where “natural phenomena” legitimize Kim’s rule:

8. 8/29/2001–Natural phenomena occur in Russia as KJI travels to Moscow.
9. 2/12/2009–Snow melts on KJI birthday.

Further Information:

1. Below are the comparative DPRK/ROK per-captia GDP numbers in the KJI era (usual caveats apply). The numbers are in 1990 $US and are from Angus Maddison.

2. Here is a graph comparing DPRK/ROK growth from 1950-2006, again from Dr. Maddison.  In 1950, both countries enjoyed a per-capita income of $850 (a number higher than I believe most North Koreans enjoy today).  In 2006, Dr. Maddison estimates that the representative North Korean earns an estimated $1,133 and the representative South Korean earns $18,356:

3. Below are all of the stories about the natural phenomena:
Great man and natural phenomena
Pyongyang, March 21, 1997 (KCNA) — A new legend is these days gaining circulation in korea, stirring up the hearts of people. it says, “the Snowstorm of mt. Paektu Fell in Fog”. A legendary phenomenon occured on November 24 last year when the respected General Kim Jong Il, the son of mt. Paektu and a peerlessly great man, was giving on-site guidance to the Panmunjom mission of the Korean People’s Army, an outpost of the forefront. That day, the area of Panmunjom was enveloped in thick fog from dawn. In the previous days, it had been cloudy but fog never set in in the area. The General went round various places of Panmunjom and mounted the balcony of the Panmun House to acquaint himself with the enemy situation. The fog would not go while he was making an inspection tour of the area. So, the enemy failed to observe the kpa post and, accordingly, they could not take any hint of happenings there. Mysterious is the fact that the fog began to lift suddenly and the weather cleared when the general posed for a photograph in front of the monument dedicated to an autograph signature of the great leader President Kim Il Sung. The fog disappeared after the General ended his inspection of Panmunjom. It was when he inspected the KPA Post on mt. Taedok in the western sector of the front on March 18 last year. No sooner had his car arrived at the entrance to the post within the range of the enemy observation than its sky was covered with inky clouds. Instantly the car passed by, the sky began to clear up. a mysterious natural phenomenon took place at a time when the General was inspecting a kpa unit which is defending cho island in the West Sea. After mounting a forward command post, exposed to rain and wind, he stood by a map of operations when the black rain cloud cleared and bright sunrays spread. Such a natural phenomenon happened when he posed for a photograph with sailors at a naval unit on that same day. Informed of them, people say that even the heaven ensures the personal safety of General Kim Jong Il, working mysterious wonders.

Mysterious phenomena in Korea
Pyongyang, September 29, 1997 (KCNA) — Mysterious natural phenomena are being witnessed in different parts of Korea while provincial party conferences adopt resolutions on recommending Secretary Kim Jong Il as General Secretary of the Workers’ Party of Korea. White flowers came into bloom on a pear tree, attracting butterflies and bees at a factory in Pyongyang on September 27. The tree is as old as the factory. On their way to work, factory workers witnessed this phenomenon and said nature also welcomes the festive event. More than 100 blossoms opened on an apricot tree at the film processing plant in the city on that same day. Eighty-five blossoms were witnessed on five ten-year-old apricot trees and two fifteen-year-olds on a stock farm in Sangwon county on September 25. Fifty pear trees on the Jangchon Cooperative Farm in Sadong district made thousands of blossoms open between September 22 and 25. About 400 blossoms came into bloom on a 20-year-old wild pear tree in a park in front of the Kaesong Municipal Party Committee building in the same period. On the morning of September 22, fishermen of the fishery station in Rajin-Sonbong city caught a 10 cm-long white sea cucumber while fishing on the waters off Chongjin. They said the rare white sea cucumber has come to hail the auspicious event of electing Secretary Kim Jong Il as Party General Secretary. Seeing the mysterious natural phenomena, Koreans say Secretary Kim Jong Il is indeed the greatest of great men produced by heaven and that flowers come into bloom to mark the great event.
(more…)

According to Bloomberg, North Koreans in the Chinese city of Dandong have slashed purchases of ham, shirts, and candy at UK-owned Tesco:

At the Tesco store, Zhao said fewer North Koreans are coming in, and they’re spending less. Most North Koreans can’t freely cross the border, and only those with the ability to travel abroad shop in Dandong.

“Before this year, they would buy over 10,000 yuan in goods, now they typically only spend thousands,” she said. (10,000 yuan is about $1,460.)

Shopkeepers working within sight of the Sino-Korean Friendship Bridge spanning the Yalu River that separates the countries said traffic is down by as much as half since May.

Fan Bo said he sells about 10 generators a month to North Korea, all to Chinese companies doing business there. “The North Koreans don’t need generators,” he said. “They don’t use electricity.” Mao Yifeng, a tire seller, blames the global financial crisis for the slowdown.

Over the course of half an hour on Aug. 12, two empty blue Chinese trucks crossed the bridge into Dandong. One diesel freight train, also Chinese, crossed to China from North Korea. The open door on one of its two cars revealed there was nothing inside.

Over 45 minutes the next morning, two empty trucks and three empty North Korean buses crossed into China. No trucks were seen heading into the North.

A souvenir salesman who only gave his surname, Huang, said he’s seen road and rail traffic on the Friendship Bridge fall by about half since North Korea’s nuclear test in May. “It was never busy, now it’s even less,” Huang said.

….Trade Aid

China is the North’s biggest trading partner. Its support for the regime can be gauged by the trade surplus it runs with the country, according to Nicholas Eberstadt, a Korea specialist at the American Enterprise Institute in Washington. That fell to $386 million in the first half of this year from $1.27 billion in all of 2008, as China’s imports of coal from North Korea hit the highest level in at least five years, China’s Ministry of Commerce data show.

“China is Kim Jong Il’s patron of last resort,” said Eberstadt. “If net transfers from China continue to shrink, it will be ‘back to the 1990s’ for North Korea. That can only be an alarming prospect for Kim Jong Il and his would-be successors.”

Official trade statistics, incomplete and not including goods smuggled by sea or across the 1,415-kilometer (880 mile) border, show two-way trade between China and North Korea fell 2.5 percent in the first six months of this year to $1.12 billion, according to China’s Commerce Ministry. Trade between China and South Korea during the same period was $67.6 billion.

Read the full artilce here:
North Koreans Spurn Tesco Ham as China Trade Withers
Bloomberg
Michael Forsythe
8/19/2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-7-22-1
7/22/2009

According to a report released by the Korea Trade-Investment Promotion Agency (KOTRA), mineral products again topped the list of DPRK exports, accounting for 41.3 percent of goods sent out of the country last year. The KOTRA report, “2008 DPRK Trade Trends,” states that the North’s 2008 exports, totaling 1,130,213,000 dollars, increased by 23 percent over the 918.77 million USD-worth of goods exported in 2007.

With the exception of plastic and wooden goods, North Korean exports grew in all areas. Mineral products accounted for 41.3 percent; non-ferrous minerals made up 16.8 percent, textiles accounted for 10.6 percent; chemical plastics made up 7.6 percent; electrical and electronic machinery made up 7 percent; and animal products accounted for 3.6 percent.

Mineral goods were up 33.5 percent over last year, recording sales of 465.44 million USD. This sector has shown continuous growth over the last five years. In 2004, trade in these goods brought in 152.28 million USD; in 2005, 243.66 million USD; in 2006, 244.43 million USD; and in 2007, 349.58 million USD.

Since 2003, North Korea has concentrated on invigorating the light-industrial sector, and has emphasized the export of manufactured goods. However, last year, exports of mineral products and non-ferrous minerals combined to make up a total of 58.1 percent of all exports; the North has been unable to restructure its export sector or satisfactorily boost light-industrial manufacturing.

North Korea’s imports grew as well, to more than twice that of exports. Bringing in goods worth 2,685,478,000 USD, imports grew by 32 percent over the 2.023 billion in imports during 2007. In 2008, mineral products accounted for 25.9 percent of imports; fibers accounted for 11.9 percent; electrical and electronic machinery, 11.5 percent; processed food items, 8.8 percent; chemical and heavy industrial goods, 7.5 percent; and non-ferrous minerals, 6.6 percent. Import of fibers, processed food, and mineral products grew, while the import of animal products, vegetable products and automobiles fell.

Crude petroleum, the North’s largest import item, was imported exclusively from China, and was up 46.9 percent (414.31 million USD) over 2007 (281.97 million USD). However, due to the loss of other sources of fuel, overall imports of crude grew by a mere 1 percent.

Import of grains fell in 2008, recording only 86.24 million USD – a fall of 25.6 percent from the 115.86 million USD in grain imports during 2007. KOTRA explains that due to instability in the grain market, imports from China of rice and barley were halted in April, while corn imports were halted in August.

(Note: Here is the KOTRA web page.  It is not a user-friendly site and I was unable to find the report in English.)

According to Fox News:

A spokesman for the World Food program has confirmed to FOX News that on July 3, the emergency relief organization was ordered to limit food deliveries to 57 of the 131 North Korean counties it previously served. At the same time, the agency was told that it must give seven days’ notice of visits to oversee food deliveries at all of its relief sites — a sharp change from the one-day notice previously required under a deal to retain U.S. support for North Korean relief efforts. As a result, the spokesman said, WFP is “reviewing the current terms and conditions for our work” in North Korea, “to ensure that our work and our accountability is not compromised.”

Additional constraints were also slapped on the child relief organization UNICEF in June, according to a spokesman, Chris de Bono. He told FOX News that the regime banned UNICEF from operating in its northerly Ryanggan province, which borders China, and is one of the impoverished country’s poorest areas. UNICEF still operates in 56 other counties across North Korea.

The restrictions make even more dire the food situation in a country where starvation and malnutrition are widespread, even as the Kim regime continues to set off atomic blasts and fire missiles in the direction of Japan and Hawaii.

Furthermore, they once again raise questions about the U.N.’s ability to monitor whatever relief activities that remain in the country. UNICEF’s spokesman told FOX News that only WFP had won the right to 24-hour notification for inspection visits, and that all other U.N. institutions in North Korea have operated with the one-week request limit as a matter of course.

UNICEF has ten international staff and 20 local staffers in North Korea. None of the international staff speak Korean. The agency is budgeted to spend $13 million a year on North Korean operations, principally on food for infants, children and pregnant women, along with emergency vaccination programs, essential medicines and clean water supplies.

But nowhere near that amount of money from international donors is currently available. According to its Web site, UNICEF has received only 10 percent of the total, or about $1.3 million, undoubtedly a result of the North Korean regime’s aggressive pursuit of nuclear weapons. Unless more money is received soon, the UNICEF spokesman said, “it will be difficult to maintain the current level of operations and this will have serious negative consequences for children and other vulnerable people.”

The same funding shortfall applies to the World Food Program, which told FOX News a month ago that donor nations had provided only $75.4 million toward a 2009 goal of $503 million for North Korea, with more than half of that amount — $38.8 million — food aid that was not delivered in 2008.

The only other U.N. agency that has significant operations in North Korea, the United Nations Population Fund, reports that it has received no curtailment in its activities, but it only operates in 11 North Korean counties. It was slated to spend roughly $8.3 million in North Korea between 2007 and 2009, chiefly for birth control and other forms of “reproductive health” and for helping the regime collect population statistics.

Nonetheless, a big question mark still hangs over the North Korean operations of the United Nations Development Program, the U.N.’s major anti-poverty agency, which suspended operations in North Korea in 2007 in the wake of revelations from an independent inquiry that it had wrongfully provided millions in hard currency to the North Korean regime, ignored U.N. Security Council sanctions in passing on dual-use equipment that could conceivably be used in the country’s nuclear program, and allowed North Korean government employees to fill key positions.

Read the full story below:
North Korea Cuts Off More U.N. Relief as Nation Starves
Fox News
George Russell
7/7/2009

North Korea doesn’t release official economic data.  Since 1991, the South Korean central bank has released its own estimates of the North Korean economy to fill the void.  Its figures are derived from information provided by the ROK’s National Intelligence Service and other sources.  The 2008 statistics can be downloaded here.

According to coverage by the Associated Press:

The North’s gross domestic product for last year was estimated at $24.7 billion, a 3.7% increase from 2007, Seoul’s Bank of Korea said in a news release. The impoverished North’s economy shrank 2.3% in 2007 and 1.1% in 2006.

The central bank said the North’s economic growth was mainly because of “temporary factors” such as favorable weather conditions that resulted in an increase in agricultural production, and the arrival of oil shipments under an international disarmament deal on its nuclear program.

The size of North Korea’s economy, however, was still about 2.6% of South Korea’s, the bank said, adding it was “difficult” to determine whether last year’s growth means the country’s internal economic conditions have improved.

The bank said the North’s agricultural production increased 10.9% last year compared with 2007. The production of coal, iron ore and other minerals expanded 2.3% and the manufacturing industry 2.5%.

…and BBC coverage:

Agricultural production rose nearly 11% in 2008 compared with 2007. And coal, iron ore and other mineral production grew 2.3% for the year.

UPDATE from Business Week:

The surprise underscores the tiny size of the North Korean economy, which could be easily swayed by such factors as weather and outside assistance. Just over two-thirds of the 3.7% growth came from the agricultural sector, and that is heavily dictated by weather. North Korea’s agricultural output increased by 10.9% in 2008 after falling by 12.1% in the previous year as it managed to escape from major floods and drought. Its 2008 manufacturing production also grew by 2.5%, compared with a gain of a mere 0.8% in 2007, thanks to heavy oil supplies by the U.S. and its allies as a result of Pyongyang’s agreement last year to begin dismantling its nuclear facilities.

Even as hope builds in South Korea about a recovery, with the U.S. and China showing signs of revival, prospects for North Korea’s economy are looking grimmer. North Korea’s nuclear test in May and the regime’s missile tests this year have led to an end to outside help and economic sanctions by the U.N. This heralds a poor performance in the manufacturing sector, which will almost certainly face an acute shortage of oil and electricity this year.

Pyongyang can’t count on the agricultural industry for any major contribution to economic growth in 2009, either. Even if North Korea manages to maintain the 2008 grain output of 4.3 million tons, which will be difficult to achieve unless last year’s exceptionally good weather is repeated, it won’t help the economy grow as it starts from a high base.

Those factors make North Korea’s economic growth last year an anomaly. “There’s no indication that North Korea’s growth engine has improved in any fundamental way,” says Bank of Korea economist Shin Seung Cheol. Even with last year’s extraordinary growth, North Korea’s gross domestic product was 1/38 of South Korea’s $935 billion and its trade volume was 1/224 of the South’s $857.3 billion in 2008. As long as North Korea’s reclusive leader Kim Jong Il refuses to open up his country, the gap is bound to keep expanding.

I have collected the most commonly referenced North Korean economic statistics here.

Read more here:
South Korea’s Central Bank Says North’s Economy Grew in 2008
Associated Press
6/28/2009

North Korea’s GDP Growth Better Than South Korea’s
Business Week
Moon Ihlwan
6/30/2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-6-16-1
6/16/2009

The amount of inter-Korean exchange has shrunk considerably this year, as tensions between the North and South continue to mount. According to the ROK Customs Administration’s inter-Korean trade office, cross-border transactions between January and April of this year fell 24.8 percent from 2008; trade amounted to 426.35 million USD, down from 566.92 million USD during the same period last year. South Korean imports were down only 9.5 percent, at 260.19 million USD, but exports to the North amounted to a mere 59.4 percent of the amount sent last year, recording 166.17 million USD. 54.9 percent of these goods (by value) traveled across the border by passing through Dorasan Station; 32.8 percent went through Incheon Harbor; 6.4 percent through Busan Harbor, 1.6 percent through Sokcho Harbor; and 1.1 percent passing through Goseong.

In April, with the North’s launch of a long-range missile in spite of the opposition of the international community, inter-Korean trade dropped to 69.2 percent of last year’s level, falling to 105.53 million USD. In fact, inter-Korean trade fell relative to the same month in the previous year eight months straight, beginning in September of last year.

With last month’s sudden nuclear test and South Korea’s subsequent joining of PSI, inter-Korean trade is expected to continue to wither in the latter half of the year. The amount of trade seen from January to April of this year is equivalent to 23.4 percent of the total trade for last year (1.82078 billion USD), and even if the current level of trade is maintained for the rest of the year, it is expected to amount to a mere 70 percent of what was traded in 2008.

Inter-Korean trade had previously been recording significant growth; in 1999, during Kim Dae Jung’s ‘People’s Government’, inter-Korean trade was worth only 328.65 million USD, but began to climb, growing more than five-fold by 2008, topping out at 1.82078 billion USD last year. However, after the launch of the current government, the amount of goods imported by the North from the South began to fall; exports to North Korea in 2008 were worth 883.41 USD, 145.15 million less than in 2007.

North Korean companies involved in processing-on-demand, agriculture and fisheries work have been part of Pyongyang’s trade ambitions, and these companies have also been hurt by the freeze in inter-Korean relations, with dozens of businesses facing closure, and many more severely hit by the North’s shrinking trade.