The first inter-Korean exchange of goods occurred in 1988.
This development had the potential to significantly alter both
North Korea's future economic development and its foreign
economic relations. Trade began modestly with the November 21,
1988 arrival of forty kilograms of North Korean clams at the
South Korean port of Pusan. A second transaction, in January
1989, involved South Korean imports of North Korean art such as
paintings, pottery, woodwork, and industrial artworks. In July
1990, North Korea swallowed its pride and accepted delivery of
some 800 tons of South Korean rice collected by Christians
through a "Rice of Love" campaign for the poor.
In December 1990, the first contract between a South Korean
company and a North Korean company was signed. Doosung Company, a
small, little-known trading company in Seoul, signed a direct
barter trade contract with Kmgang-san International Trade and
Development Company. The contract called for exchanging US$1.3
million worth of goods by the end of February 1992. Doosung was
to ship 500 refrigerators and 240 color television sets and to
receive North Korean cement, artifacts, and paintings of equal
value. A total of 11,243 North Korean works of art worth
US$650,000 arrived in Pusan on February 15, 1991, followed
shortly thereafter by a shipment of electronic products to North
Korea. Before this deal, some 200 North-South transactions--
involving no fewer than 150 South Korean firms and nine North
Korean firms--had taken place, but all these transactions had
been indirect and had been conducted through brokers in Hong Kong
or Japan.
On March 29, 1991, Cheongji Trading Company became the second
South Korean trading company to sign a formal barter agreement
with Kmgang-san International Trade and Development Company. The
two companies agreed to exchange 100,000 tons of rice for 11,000
tons of cement and 30,000 tons of coal. The initial rice shipment
of 5,000 tons left Mokp'o in July 1991. Seoul was ready to
compensate fully any losses to Cheongji through an inter-Korean
cooperation fund established in August 1990. The fund was to
provide loans and financial assistance for expenses related to
promoting inter-Korean trade and other forms of economic
cooperation.
In addition to direct agreements with smaller South Korean
firms, North Korea also began to trade with South Korea's
conglomerates, or
chaebl (see Glossary).
Lucky-Goldstar
signed a contract in February 1991 with a Chinese broker to ship
30,000 barrels of high sulfur diesel oil to North Korea for
US$1.4 million payable in cash. The diesel oil was to be shipped
from Yosu, South Korea, to Namp'o, North Korea. Two
chaebl, Samsung and Lucky-Goldstar, bought almost 135
kilograms of North Korean gold bullion in 1991 from brokers in
Hong Kong. This transaction was South Korea's first purchase of
gold from North Korea.
Immediately after the two Koreas were admitted to the United
Nations in 1991, South Korean traders, including Samsung and
Hyundai, began to increase imports of products from North Korea.
Samsung signed a contract to import steel sheets, zinc ingots,
farm crops, and yarn; the company planned to pay for the steel
sheets by exporting color television sets, sugar, and
refrigerators. Another South Korean conglomerate, Ssangyong,
imported iron ingots in September 1991 and planned to import
more. Hyundai planned to import 1,500 tons of iron ingots in
October 1991. Based on South Korean figures, the value of the
two-way trade increased from US$23.34 million in 1989, to
US$25.61 million in 1990, and to US$190 million in 1991.
One indication of North Korea's readiness to trade with South
Korea was the early 1992 report that North Korea had ordered
US$800 million to US$1 billion of consumer goods from South Korea
to be known as "April 15 goods" in honor of Kim Il Sung's
eightieth birthday. These goods, ranging from toothbrushes and
clothing to refrigerators and washing machines, were to be sold
or handed out to North Koreans as gifts during the birthday
celebrations. The South Korean firms were asked not to attach
brand names to the goods.
At the beginning of inter-Korean trade, North Korea exported
hot-rolled coil, iron and zinc ingots, coal, steel sheets,
cement, potatoes, electrolyte copper, Alaskan pollack, dried
squid, raw silk, and other products. Textiles, sock looms,
electrical appliances, and other goods were imported. A turning
point was reached in 1991, when inter-Korean economic cooperation
moved beyond commodity trade.
In January 1992, Daewoo chairman Kim Woo Choong visited North
Korea as the first officially invited South Korean business
leader. While in P'yongyang, Kim concluded a joint venture
agreement with the North Korean government to establish an
industrial park in Namp'o for the exclusive use of Daewoo and
other South Korean firms. Daewoo will spend between US$10 million
and US$20 million to build the complex; North Korea will provide
the labor and land. Consumer goods such as clothes, leather
goods, footware, toys, and kitchen utensils will be produced for
export to third countries. Daewoo is expected to make a separate
agreement involving investment guarantees, shipping arrangements,
sales methods, and technology transfer. As the goods are not to
be used for internal consumption, it is likely that some kind of
compensation trade arrangement was reached whereby Daewoo's
payment for its investment will come from selling the finished
products in third countries. On February 10, 1992, Seoul
announced its approval of Daewoo's joint venture projects in
North Korea.
|
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.
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Location | | Eastern Asia, northern half of the Korean Peninsula bordering the Korea Bay and the Sea of Japan, between China and South Korea
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|
Area(sq km) | | total: 120,538 sq km
land: 120,408 sq km
water: 130 sq km
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Geographic coordinates | | 40 00 N, 127 00 E
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Land boundaries(km) | | total: 1,673 km
border countries: China 1,416 km, South Korea 238 km, Russia 19 km
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Coastline(km) | | 2,495 km
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Climate | | temperate with rainfall concentrated in summer
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Elevation extremes(m) | | lowest point: Sea of Japan 0 m
highest point: Paektu-san 2,744 m
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Natural resources | | coal, lead, tungsten, zinc, graphite, magnesite, iron ore, copper, gold, pyrites, salt, fluorspar, hydropower
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Land use(%) | | arable land: 22.4%
permanent crops: 1.66%
other: 75.94% (2005)
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Irrigated land(sq km) | | 14,600 sq km (2003)
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Total renewable water resources(cu km) | | 77.1 cu km (1999)
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Freshwater withdrawal (domestic/industrial/agricultural) | | total: 9.02 cu km/yr (20%/25%/55%)
per capita: 401 cu m/yr (2000)
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Natural hazards | | late spring droughts often followed by severe flooding; occasional typhoons during the early fall
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Environment - current issues | | water pollution; inadequate supplies of potable water; waterborne disease; deforestation; soil erosion and degradation
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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
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Geography - note | | strategic location bordering China, South Korea, and Russia; mountainous interior is isolated and sparsely populated
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Population | | 22,665,345 (July 2009 est.)
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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.)
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Median age(years) | | total: 33.5 years
male: 32.1 years
female: 34.9 years (2009 est.)
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Population growth rate(%) | | 0.42% (2009 est.)
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Birth rate(births/1,000 population) | | 14.82 births/1,000 population (2009 est.)
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Death rate(deaths/1,000 population) | | 10.52 deaths/1,000 population (July 2009 est.)
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Net migration rate(migrant(s)/1,000 population) | | -0.09 migrant(s)/1,000 population (2009 est.)
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Urbanization(%) | | urban population: 63% of total population (2008)
rate of urbanization: 0.9% annual rate of change (2005-10 est.)
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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.)
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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.)
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Life expectancy at birth(years) | | total population: 63.81 years
male: 61.23 years
female: 66.53 years (2009 est.)
|
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Total fertility rate(children born/woman) | | 1.96 children born/woman (2009 est.)
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Nationality | | noun: Korean(s)
adjective: Korean
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Ethnic groups(%) | | racially homogeneous; there is a small Chinese community and a few ethnic Japanese
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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
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Languages(%) | | Korean
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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
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Government type | | Communist state one-man dictatorship
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Capital | | name: Pyongyang
geographic coordinates: 39 01 N, 125 45 E
time difference: UTC+9 (14 hours ahead of Washington, DC during Standard Time)
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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
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Constitution | | adopted 1948; revised several times
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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
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Suffrage | | 17 years of age; universal
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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
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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
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Judicial branch | | Central Court (judges are elected by the Supreme People's Assembly)
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Political pressure groups and leaders | | none
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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
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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
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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.
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GDP (purchasing power parity) | | $40 billion (2008 est.)
note: data are in 2008 US dollars
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GDP (official exchange rate) | | $26.2 billion (2008 est.)
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GDP - real growth rate(%) | | 3.7% (2008 est.)
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GDP - per capita (PPP) | | $1,800 (2008 est.)
note: data are in 2008 US dollars
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GDP - composition by sector(%) | | agriculture: 23.3%
industry: 43.1%
services: 33.6% (2002 est.)
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Labor force | | 20 million
note: estimates vary widely (2004 est.)
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Labor force - by occupation(%) | | agriculture: 37%
industry and services: 63% (2004 est.)
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Unemployment rate(%) | | NA%
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Population below poverty line(%) | | NA%
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Household income or consumption by percentage share(%) | | lowest 10%: NA%
highest 10%: NA%
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Budget | | revenues: $2.88 billion
expenditures: $2.98 billion (2005)
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Inflation rate (consumer prices)(%) | | NA%
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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.)
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Agriculture - products | | rice, corn, potatoes, soybeans, pulses; cattle, pigs, pork, eggs
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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
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Industrial production growth rate(%) | | NA%
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Exports | | $1.684 billion (2007)
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Exports - commodities(%) | | minerals, metallurgical products, manufactures (including armaments), textiles, agricultural and fishery products
|
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Exports - partners(%) | | South Korea 45%, China 35%, India 5% (2007)
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Imports | | $3.055 billion (2007)
$2.879 billion (2006)
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Imports - commodities(%) | | petroleum, coking coal, machinery and equipment, textiles, grain
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Imports - partners(%) | | China 46%, South Korea 34%, Thailand 6%, Russia 4% (2007)
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Debt - external | | $12.5 billion (2001 est.)
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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)
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Currency (code) | | North Korean won (KPW)
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Telephones - main lines in use | | 1.18 million (2008)
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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)
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Internet country code | | .kp
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Airports | | 79 (2009)
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Pipelines(km) | | oil 154 km (2008)
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Roadways(km) | | total: 25,554 km
paved: 724 km
unpaved: 24,830 km (2006)
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Ports and terminals | | Ch'ongjin, Haeju, Hungnam (Hamhung), Kimch'aek, Kosong, Najin, Namp'o, Sinuiju, Songnim, Sonbong (formerly Unggi), Ungsang, Wonsan
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Military branches | | North Korean People's Army: Ground Forces, Navy, Air Force; civil security forces (2005)
|
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Military service age and obligation(years of age) | | 17 years of age (2004)
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Manpower available for military service | | males age 16-49: 6,225,747
females age 16-49: 6,188,270 (2008 est.)
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Manpower fit for military service | | males age 16-49: 4,104,964
females age 16-49: 4,492,374 (2009 est.)
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Manpower reaching militarily significant age annually | | male: 191,759
female: 184,641 (2009 est.)
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Military expenditures(% of GDP) | | NA
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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)
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Refugees and internally displaced persons | | IDPs: undetermined (flooding in mid-2007 and famine during mid-1990s) (2007)
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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)
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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.)
|
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Oil - production(bbl/day) | | 120.7 bbl/day (2008 est.)
|
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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.)
|
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HIV/AIDS - adult prevalence rate(%) | | NA
|
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HIV/AIDS - people living with HIV/AIDS | | NA
|
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HIV/AIDS - deaths | | NA
|
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Literacy(%) | | definition: age 15 and over can read and write
total population: 99%
male: 99%
female: 99%
|
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Education expenditures(% of GDP) | | NA
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