North Korean GDP per capita over $1,000 for the first time ever last year, says Hyundai

By Benjamin Katzeff Silberstein

Someone once said that if anyone ever gives you a number on anything related to the North Korean economy and they include a decimal, you can be sure that they are wrong. This almost certainly holds true for the GDP estimates for North Korea that come out every year.

Earlier this year, South Korea’s Bank of Korea estimated that North Korean GDP had contracted by 1.1%, for the first time since 2010. Now, Hyundai Research Institute claims that nominal GDP per capita in fact went above $1,000, putting North Korea roughly on the same level as South Korea in the mid-1970s. Unless North Korea’s population declined very suddenly and drastically during the last year (which it didn’t, of course), both claims cannot hold true at the same time. I am personally more inclined to believe the directionality (though not necessarily the exact figure) of Hyundai’s estimate:

North Korea’s gross domestic product (GDP) per capita surpassed US$1,000 for the first time last year despite heavy sanctions imposed following a series of nuclear and missile tests, a Seoul-based think tank said Thursday.
Hyundai Research Institute estimated North Korea’s nominal GDP per capita at $1,013 in 2015, up from $930 from the previous year, based on its own income analysis model.

The reclusive state’s nominal GDP reached $986 in 1987, but has since declined to around $650 in the early 2000s.

According to the Food and Agriculture Organization of the United Nations (FAO), the North produced 4.78 million tons of crops in 2015, a 10.7-percent fall from a year earlier, due to severe drought. The price of rice per 1 kilogram surged 5.6 percent on-year to 5,200 won (US$4.73).

Trade with China was valued at $5.71 billion won last year, down 16.8 percent from 2014, mainly due to a drop in the North’s exports of natural resources to its largest trading partner.

In contrast, inter-Korean trade rose 15.6 percent on-year to $2.71 billion in 2015, the institute said.

The international community’s aid to Pyongyang was tallied at $31.87 million last year, up 12.4 percent from a year ago, but less than 2011’s $97.11 million, it noted.

The research institute evaluated the communist state’s economic power is equivalent to that of South Korea in the mid-1970s.

North Korea’s per-capita GDP lags far behind of other Asian nations, including China ($7,990), Vietnam ($2,088) and Laos ($1,799). It is even below other underdeveloped countries, such as Bangladesh ($1,287) and Myanmar ($1,292), according to the institute.

“North Korea’s current economy is not capable of standing alone,” said Kim Cheon-koo, a researcher at Hyundai Research Institute. “The wide income gap between South and North Koreas is expected to create massive costs for reunification.”

Full article here:
N. Korea’s per-capita GDP tops US$1,000 in 2015: report
Yonhap News
2016-09-29

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