As of mid-1993, North Korea's economy remained one of the
world's most highly centralized and planned, even by pre-1990
communist standards. Complete "socialization" of the economy was
accomplished by 1958, when private ownership of the means of
production, land, and commercial enterprises was replaced by
state or cooperative (collective) ownership and control. As a
result, industrial firms were either state-owned or cooperatives,
the former contributing more than 90 percent of total industrial
output in the 1960s.
Unlike in industry, collectives are the predominant form of
ownership and production in agriculture; the remaining rural
enterprises are organized as state farms. The sole negligible
exception to state and collective ownership in agriculture is the
ownership of small garden plots and fruit trees, as well as the
raising of poultry, pigs, bees, and the like, which are permitted
both for personal consumption and sale at the peasant market.
Private plots can be no more than roughly 160 square meters in
area. State and cooperative ownership and control extends to
foreign trade, as well as to all other sectors of the economy,
including banking, transportation, and communications.
In commerce nearly all goods are distributed through either
state-operated or cooperative stores. Less than 1 percent of
retail transactions are carried out at peasant markets, where
surplus farm products are sold at free-market prices.
As in other Soviet-type or "command" economies, all economic
decisions concerning the selection of output, output targets,
allocation of inputs, prices, distribution of national income,
investment, and economic development are implemented through the
economic plan devised at the center and are "blueprinted" by the
State Planning Committee
(see Planning
, this ch.;
Organization of the Government
, ch. 4). In the face of the worldwide political
and economic collapse of communist regimes in the early 1990s,
North Korea defiantly continues to sing the praises of a command
economy. Attempts to increase production through rigid central
control and exhortations and other non-pecuniary incentives have
not ceased, as exemplified by the campaign entitled "Speed of the
1990s." On-site industrial visits by President Kim Il Sung and
his son and heir-apparent, Kim Jong Il, continue.
However, there have been some minor efforts toward relaxing
central control of the economy in the 1980s that involve
industrial enterprises. Encouraged by Kim Jong Il's call to
strengthen the implementation of the independent accounting
system (tongnip ch'aesangje) of enterprises in March 1984,
interest in enterprise management and the independent accounting
system has increased, as evidenced by increasing coverage of the
topic in various North Korean journals
(see The Media
, ch. 4).
Under the system, factory managers still are assigned output
targets but are given more discretion in making decisions about
labor, equipment, materials, and funds.
In addition to fixed capital, each enterprise is allocated a
minimum of working capital from the state through the Central
Bank and is required to meet various operating expenses with the
proceeds from sales of its output. Up to 50 percent of the
"profit" is taxed, the remaining half being kept by the
enterprise for purchase of equipment, introduction of new
technology, welfare benefits, and bonuses. As such, the system
provides some built-in incentives and some degree of micro-level
autonomy, unlike the budget allocation system, under which any
surplus is turned over to the government in its entirety.
Another innovation, the August Third People's Consumer Goods
Production Movement, is centered on consumer goods production.
This measure was so named after Kim Jong Il made an inspection
tour of an exhibition of light industrial products held in
P'yongyang on August 3, 1984. The movement charges workers to use
locally available resources and production facilities to produce
needed consumer goods. On the surface, the movement does not
appear to differ much from the local industry programs in
existence since the 1960s, although some degree of local autonomy
is allowed. However, a major departure places output, pricing,
and purchases outside central planning. In addition, direct sales
stores have been established to distribute goods produced under
the movement directly to consumers. The movement is characterized
as a third sector in the production of consumer goods, alongside
centrally controlled light industry and locally controlled
traditional light industry. Moreover, there were some reports in
the mid-1980s of increasing encouragement of small-scale private
handicrafts and farm markets. As of 1992, however, no move was
reported to expand the size of private garden plots.
All these measures appear to be minor stop-gap measures to
alleviate severe shortages of consumer goods by infusing some
degree of incentives. In mid-1993 no significant moves signaling
a fundamental deviation from the existing system had occurred.
The reluctance to initiate reform appears to be largely
political. It is, perhaps, the linkage between economic reform
and political liberalization that worries the leadership. This
concern is based on the belief that economic reform will produce
new interests that will demand political expression, and that
demands for the institutionalization of such pluralism eventually
will lead to political liberalization. There clearly exists a
catch-22 situation for Kim Il Sung and, particularly, for Kim
Jong Il. In order to legitimize his power base, the younger Kim
needs an economic base. However, his economic reforms challenge
his position as the advancer of chuch'e and may eventually
undo the regime.
In the mid-1980s, the speculation that North Korea would
emulate China in establishing Chinese-style special economic
zones was flatly denied by then deputy chairman of the Economic
Policy Commission Yun Ki-pok (Yun became chairman as of June
1989). China's special economic zones typically are coastal areas
established to promote economic development and the introduction
of advanced technology through foreign investment. Investors are
offered preferential tax terms and facilities. The zones, which
allow greater reliance on market forces, have more decisionmaking power in economic activities than do provincial-level
units. Over the years, China has tried to convince the North
Korean leadership of the advantages of these zones by giving
tours of the various zones and explaining their values to
visiting high-level officials.
In December 1991, North Korea established a "zone of free
economy and trade" to include the northeastern port cities of
Unggi, Ch'ngjin, and Najin. The establishment of this zone also
had ramifications on the questions of how far North Korea would
go in opening its economy to the West and to South Korea, the
future of the development scheme for the Tumen River area, and,
more important, how much North Korea would reform its economic
system.
|
Background | | An independent kingdom for much of its long history, Korea was occupied by Japan beginning in 1905 following the Russo-Japanese War. Five years later, Japan formally annexed the entire peninsula. Following World War II, Korea was split with the northern half coming under Soviet-sponsored Communist control. After failing in the Korean War (1950-53) to conquer the US-backed Republic of Korea (ROK) in the southern portion by force, North Korea (DPRK), under its founder President KIM Il Sung, adopted a policy of ostensible diplomatic and economic "self-reliance" as a check against outside influence. The DPRK demonized the US as the ultimate threat to its social system through state-funded propaganda, and molded political, economic, and military policies around the core ideological objective of eventual unification of Korea under Pyongyang's control. KIM's son, the current ruler KIM Jong Il, was officially designated as his father's successor in 1980, assuming a growing political and managerial role until the elder KIM's death in 1994. After decades of economic mismanagement and resource misallocation, the DPRK since the mid-1990s has relied heavily on international aid to feed its population. North Korea's history of regional military provocations, proliferation of military-related items, long-range missile development, WMD programs including nuclear weapons test in 2006 and 2009, and massive conventional armed forces are of major concern to the international community.
|
|
Location | | Eastern Asia, northern half of the Korean Peninsula bordering the Korea Bay and the Sea of Japan, between China and South Korea
|
|
Area(sq km) | | total: 120,538 sq km
land: 120,408 sq km
water: 130 sq km
|
|
Geographic coordinates | | 40 00 N, 127 00 E
|
|
Land boundaries(km) | | total: 1,673 km
border countries: China 1,416 km, South Korea 238 km, Russia 19 km
|
|
Coastline(km) | | 2,495 km
|
|
Climate | | temperate with rainfall concentrated in summer
|
|
Elevation extremes(m) | | lowest point: Sea of Japan 0 m
highest point: Paektu-san 2,744 m
|
|
Natural resources | | coal, lead, tungsten, zinc, graphite, magnesite, iron ore, copper, gold, pyrites, salt, fluorspar, hydropower
|
|
Land use(%) | | arable land: 22.4%
permanent crops: 1.66%
other: 75.94% (2005)
|
|
Irrigated land(sq km) | | 14,600 sq km (2003)
|
|
Total renewable water resources(cu km) | | 77.1 cu km (1999)
|
|
Freshwater withdrawal (domestic/industrial/agricultural) | | total: 9.02 cu km/yr (20%/25%/55%)
per capita: 401 cu m/yr (2000)
|
|
Natural hazards | | late spring droughts often followed by severe flooding; occasional typhoons during the early fall
|
|
Environment - current issues | | water pollution; inadequate supplies of potable water; waterborne disease; deforestation; soil erosion and degradation
|
|
Environment - international agreements | | party to: Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Environmental Modification, Hazardous Wastes, Ozone Layer Protection, Ship Pollution
signed, but not ratified: Law of the Sea
|
|
Geography - note | | strategic location bordering China, South Korea, and Russia; mountainous interior is isolated and sparsely populated
|
|
Population | | 22,665,345 (July 2009 est.)
|
|
Age structure(%) | | 0-14 years: 21.3% (male 2,440,439/female 2,376,557)
15-64 years: 69.4% (male 7,776,889/female 7,945,399)
65 years and over: 9.4% (male 820,504/female 1,305,557) (2009 est.)
|
|
Median age(years) | | total: 33.5 years
male: 32.1 years
female: 34.9 years (2009 est.)
|
|
Population growth rate(%) | | 0.42% (2009 est.)
|
|
Birth rate(births/1,000 population) | | 14.82 births/1,000 population (2009 est.)
|
|
Death rate(deaths/1,000 population) | | 10.52 deaths/1,000 population (July 2009 est.)
|
|
Net migration rate(migrant(s)/1,000 population) | | -0.09 migrant(s)/1,000 population (2009 est.)
|
|
Urbanization(%) | | urban population: 63% of total population (2008)
rate of urbanization: 0.9% annual rate of change (2005-10 est.)
|
|
Sex ratio(male(s)/female) | | at birth: 1.06 male(s)/female
under 15 years: 1.03 male(s)/female
15-64 years: 0.98 male(s)/female
65 years and over: 0.63 male(s)/female
total population: 0.95 male(s)/female (2009 est.)
|
|
Infant mortality rate(deaths/1,000 live births) | | total: 51.34 deaths/1,000 live births
male: 58.64 deaths/1,000 live births
female: 43.6 deaths/1,000 live births (2009 est.)
|
|
Life expectancy at birth(years) | | total population: 63.81 years
male: 61.23 years
female: 66.53 years (2009 est.)
|
|
Total fertility rate(children born/woman) | | 1.96 children born/woman (2009 est.)
|
|
Nationality | | noun: Korean(s)
adjective: Korean
|
|
Ethnic groups(%) | | racially homogeneous; there is a small Chinese community and a few ethnic Japanese
|
|
Religions(%) | | traditionally Buddhist and Confucianist, some Christian and syncretic Chondogyo (Religion of the Heavenly Way)
note: autonomous religious activities now almost nonexistent; government-sponsored religious groups exist to provide illusion of religious freedom
|
|
Languages(%) | | Korean
|
|
Country name | | conventional long form: Democratic People's Republic of Korea
conventional short form: North Korea
local long form: Choson-minjujuui-inmin-konghwaguk
local short form: Choson
abbreviation: DPRK
|
|
Government type | | Communist state one-man dictatorship
|
|
Capital | | name: Pyongyang
geographic coordinates: 39 01 N, 125 45 E
time difference: UTC+9 (14 hours ahead of Washington, DC during Standard Time)
|
|
Administrative divisions | | 9 provinces (do, singular and plural) and 2 municipalities (si, singular and plural)
provinces: Chagang-do (Chagang), Hamgyong-bukto (North Hamgyong), Hamgyong-namdo (South Hamgyong), Hwanghae-bukto (North Hwanghae), Hwanghae-namdo (South Hwanghae), Kangwon-do (Kangwon), P'yongan-bukto (North P'yongan), P'yongan-namdo (South P'yongan), Yanggang-do (Yanggang)
municipalities: Nason-si, P'yongyang-si
|
|
Constitution | | adopted 1948; revised several times
|
|
Legal system | | based on Prussian civil law system with Japanese influences and Communist legal theory; no judicial review of legislative acts; has not accepted compulsory ICJ jurisdiction
|
|
Suffrage | | 17 years of age; universal
|
|
Executive branch | | chief of state: KIM Jong Il (since July 1994); note - on 9 April 2009, rubberstamp Supreme People's Assembly (SPA) reelected KIM Jong Il chairman of the National Defense Commission, a position accorded nation's "highest administrative authority"; SPA reelected KIM Yong Nam in 2009 president of its Presidium also with responsibility of representing state and receiving diplomatic credentials
head of government: Premier KIM Yong Il (since 11 April 2007); Vice Premier KWAK Pom Gi (since 5 September 1998), Vice Premier O Su Yong (since 13 April 2009), Vice Premier PAK Su Gil (since 18 September 2009), Vice Premier PAK Myong Su (since 4 September 2009), Vice Premier RO Tu Chol (since 3 September 2003)
cabinet: Naegak (cabinet) members, except for Minister of People's Armed Forces, are appointed by SPA
elections: last held in September 2003; date of next election NA
election results: KIM Jong Il and KIM Yong Nam were only nominees for positions and ran unopposed
|
|
Legislative branch | | unicameral Supreme People's Assembly or Ch'oego Inmin Hoeui (687 seats; members elected by popular vote to serve five-year terms)
elections: last held 8 March 2009 (next due to be held in March 2014)
election results: percent of vote by party - NA; seats by party - NA; ruling party approves a list of candidates who are elected without opposition; a token number of seats are reserved for minor parties
|
|
Judicial branch | | Central Court (judges are elected by the Supreme People's Assembly)
|
|
Political pressure groups and leaders | | none
|
|
International organization participation | | ARF, FAO, G-77, ICAO, ICRM, IFAD, IFRCS, IHO, IMO, IOC, IPU, ISO, ITSO, ITU, NAM, UN, UNCTAD, UNESCO, UNIDO, UNWTO, UPU, WFTU, WHO, WIPO, WMO
|
|
Flag description | | three horizontal bands of blue (top), red (triple width), and blue; the red band is edged in white; on the hoist side of the red band is a white disk with a red five-pointed star
|
|
Economy - overview | | North Korea, one of the world's most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and shortages of spare parts. Large-scale military spending draws off resources needed for investment and civilian consumption. Industrial and power output have declined in parallel from pre-1990 levels. Severe flooding in the summer of 2007 aggravated chronic food shortages caused by on-going systemic problems including a lack of arable land, collective farming practices, and persistent shortages of tractors and fuel. Large-scale international food aid deliveries have allowed the people of North Korea to escape widespread starvation since famine threatened in 1995, but the population continues to suffer from prolonged malnutrition and poor living conditions. Since 2002, the government has allowed private "farmers' markets" to begin selling a wider range of goods. It also permitted some private farming - on an experimental basis - in an effort to boost agricultural output. In October 2005, the government tried to reverse some of these policies by forbidding private sales of grains and reinstituting a centralized food rationing system. By December 2005, the government terminated most international humanitarian assistance operations in North Korea (calling instead for developmental assistance only) and restricted the activities of remaining international and non-governmental aid organizations such as the World Food Program. External food aid now comes primarily from China and South Korea in the form of grants and long-term concessional loans. In May 2008, the US agreed to give 500,000 metric tons of food to North Korea via the World Food Program and US nongovernmental organizations; Pyongyang began receiving these shipments in mid-2008. During the October 2007 summit, South Korea also agreed to develop some of North Korea's infrastructure, natural resources, and light industry, but inter-Korean economic cooperation slowed in 2008 as Pyongyang restricted tourism and manufacturing joint ventures in the North, and food aid from South Korea was suspended. Firm political control remains the Communist government's overriding concern, which will likely inhibit the loosening of economic regulations.
|
|
GDP (purchasing power parity) | | $40 billion (2008 est.)
note: data are in 2008 US dollars
|
|
GDP (official exchange rate) | | $26.2 billion (2008 est.)
|
|
GDP - real growth rate(%) | | 3.7% (2008 est.)
|
|
GDP - per capita (PPP) | | $1,800 (2008 est.)
note: data are in 2008 US dollars
|
|
GDP - composition by sector(%) | | agriculture: 23.3%
industry: 43.1%
services: 33.6% (2002 est.)
|
|
Labor force | | 20 million
note: estimates vary widely (2004 est.)
|
|
Labor force - by occupation(%) | | agriculture: 37%
industry and services: 63% (2004 est.)
|
|
Unemployment rate(%) | | NA%
|
|
Population below poverty line(%) | | NA%
|
|
Household income or consumption by percentage share(%) | | lowest 10%: NA%
highest 10%: NA%
|
|
Budget | | revenues: $2.88 billion
expenditures: $2.98 billion (2005)
|
|
Inflation rate (consumer prices)(%) | | NA%
|
|
Economic aid - recipient | | $372 million
note: approximately 65,000 metric tons in food aid through the World Food Program appeals in 2007, plus additional aid from bilateral donors and non-governmental organizations (2007 est.)
|
|
Agriculture - products | | rice, corn, potatoes, soybeans, pulses; cattle, pigs, pork, eggs
|
|
Industries | | military products; machine building, electric power, chemicals; mining (coal, iron ore, limestone, magnesite, graphite, copper, zinc, lead, and precious metals), metallurgy; textiles, food processing; tourism
|
|
Industrial production growth rate(%) | | NA%
|
|
Exports | | $1.684 billion (2007)
|
|
Exports - commodities(%) | | minerals, metallurgical products, manufactures (including armaments), textiles, agricultural and fishery products
|
|
Exports - partners(%) | | South Korea 45%, China 35%, India 5% (2007)
|
|
Imports | | $3.055 billion (2007)
$2.879 billion (2006)
|
|
Imports - commodities(%) | | petroleum, coking coal, machinery and equipment, textiles, grain
|
|
Imports - partners(%) | | China 46%, South Korea 34%, Thailand 6%, Russia 4% (2007)
|
|
Debt - external | | $12.5 billion (2001 est.)
|
|
Exchange rates | | North Korean won (KPW) per US dollar - 140 (2007), 141 (2006), 170 (December 2004), market rate: North Korean won per US dollar - 3,400 (October 2008)
|
|
Currency (code) | | North Korean won (KPW)
|
|
Telephones - main lines in use | | 1.18 million (2008)
|
|
Telephone system | | general assessment: inadequate system; currently mobile cellular telephone services are available in Pyongyang only
domestic: fiber-optic links installed between cities; telephone directories unavailable; mobile cellular service, initiated in 2002, suspended in 2004; Orascom Telecom, an Egyptian company, launched mobile service on December 15, 2008 for the Pyongyang area only
international: country code - 850; satellite earth stations - 2 (1 Intelsat - Indian Ocean, 1 Russian - Indian Ocean region); other international connections through Moscow and Beijing (2008)
|
|
Internet country code | | .kp
|
|
Airports | | 79 (2009)
|
|
Pipelines(km) | | oil 154 km (2008)
|
|
Roadways(km) | | total: 25,554 km
paved: 724 km
unpaved: 24,830 km (2006)
|
|
Ports and terminals | | Ch'ongjin, Haeju, Hungnam (Hamhung), Kimch'aek, Kosong, Najin, Namp'o, Sinuiju, Songnim, Sonbong (formerly Unggi), Ungsang, Wonsan
|
|
Military branches | | North Korean People's Army: Ground Forces, Navy, Air Force; civil security forces (2005)
|
|
Military service age and obligation(years of age) | | 17 years of age (2004)
|
|
Manpower available for military service | | males age 16-49: 6,225,747
females age 16-49: 6,188,270 (2008 est.)
|
|
Manpower fit for military service | | males age 16-49: 4,104,964
females age 16-49: 4,492,374 (2009 est.)
|
|
Manpower reaching militarily significant age annually | | male: 191,759
female: 184,641 (2009 est.)
|
|
Military expenditures(% of GDP) | | NA
|
|
Disputes - international | | risking arrest, imprisonment, and deportation, tens of thousands of North Koreans cross into China to escape famine, economic privation, and political oppression; North Korea and China dispute the sovereignty of certain islands in Yalu and Tumen rivers; Military Demarcation Line within the 4-km wide Demilitarized Zone has separated North from South Korea since 1953; periodic incidents in the Yellow Sea with South Korea which claims the Northern Limiting Line as a maritime boundary; North Korea supports South Korea in rejecting Japan's claim to Liancourt Rocks (Tok-do/Take-shima)
|
|
Refugees and internally displaced persons | | IDPs: undetermined (flooding in mid-2007 and famine during mid-1990s) (2007)
|
|
Trafficking in persons | | current situation: North Korea is a source country for men, women, and children trafficked for the purposes of forced labor and commercial sexual exploitation; the most common form of trafficking involves North Korean women and girls who cross the border into China voluntarily; additionally, North Korean women and girls are lured out of North Korea to escape poor social and economic conditions by the promise of food, jobs, and freedom, only to be forced into prostitution, marriage, or exploitative labor arrangements once in China
tier rating: Tier 3 - North Korea does not fully comply with minimum standards for the elimination of trafficking and is not making significant efforts to do so; the government does not acknowledge the existence of human rights abuses in the country or recognize trafficking, either within the country or transnationally; North Korea has not ratified the 2000 UN TIP Protocol (2008)
|
|
Electricity - production(kWh) | | 20.9 billion kWh (2007 est.)
|
|
Electricity - production by source(%) | | fossil fuel: 29%
hydro: 71%
nuclear: 0%
other: 0% (2001)
|
|
Electricity - consumption(kWh) | | 17.49 billion kWh (2007 est.)
|
|
Electricity - exports(kWh) | | 0 kWh (2008 est.)
|
|
Electricity - imports(kWh) | | 0 kWh (2008 est.)
|
|
Oil - production(bbl/day) | | 120.7 bbl/day (2008 est.)
|
|
Oil - consumption(bbl/day) | | 16,000 bbl/day (2008 est.)
|
|
Oil - exports(bbl/day) | | 0 bbl/day (2007 est.)
|
|
Oil - imports(bbl/day) | | 13,890 bbl/day (2007 est.)
|
|
Oil - proved reserves(bbl) | | 0 bbl
|
|
Natural gas - production(cu m) | | 0 cu m (2008 est.)
|
|
Natural gas - consumption(cu m) | | 0 cu m (2008 est.)
|
|
Natural gas - exports(cu m) | | 0 cu m (2008)
|
|
Natural gas - proved reserves(cu m) | | 0 cu m (1 January 2009 est.)
|
|
HIV/AIDS - adult prevalence rate(%) | | NA
|
|
HIV/AIDS - people living with HIV/AIDS | | NA
|
|
HIV/AIDS - deaths | | NA
|
|
Literacy(%) | | definition: age 15 and over can read and write
total population: 99%
male: 99%
female: 99%
|
|
Education expenditures(% of GDP) | | NA
|
