Asia's Turning Point: An Introduction to Asia's Dynamic Economies at the Dawn of the New Century

17

North Korea: Utter Orthodoxy or Attempts to Reform?

A Few Basics

North Korea, or the Democratic People’s Republic of Korea (DPRK) as it is officially known, with its population of 23.5 million, remains generally a poor country, suffering from shortages of food and basic consumer goods. The estimates of its gross domestic product (GDP) (purchasing power parity (PPP)) in 2007 range from US$40 billion (CIA 2008) to US$71 billion (the econometric consultancy firm Global Insight), and per-capita GDP, from US$1,900 to US$3,094, respectively. If we stick to the Central Intelligence Agency (CIA) figure, the DPRK’s GDP would be close to that of, for example, Cambodia, Kenya, or Tajikistan.

The central bank of South Korea estimated the DPRK’s nominal GDP for the same year at US$20.1 billion (Lee 2008), which would be a little smaller than in Iceland and a little larger than in Panama.

The share of agriculture in the GDP was estimated at 30 percent, industry 39 percent, and services 31 percent (Nanto 2008).

After the division of the Korean Peninsula following World War II the North became a militarized Stalinist state with the Korean Workers’ Party (KWP) as the dominant force. Kim Il-sung, the founder of the state and its leader for almost five decades, wielded absolute power through the development of his personality cult as “Great Leader.” After his death in 1994, his son, Kim Jong-il, inherited the position of leader.

The North Korean planned economy used to be tightly controlled by ...