A Study on North Korea
North Korea, also known as Democratic People’s Republic of Korea, is a country locate in East Asia. Its North side is bordered by China and Russia, its south side is bordered by South Korea. Pyongyang is the biggest and capital city in North Korea. There are approximately 25 million people where 10% of the population live in Pyongyang. With the exception of a small Chinese community and a few ethnic Japanese, 98% of North Koreans are ethnically homogeneous. And their official language is Korean. Agriculture accounted 21.6% for North Korean GDP, and primary crops in North Korea are rice and corn, rice are their major food supply. Industry accounted 46.2% for its GDP, due to their “military policy” which means prioritizing the Korean People’s Army, the major product is military products which is used as national defense. Beside of military products, mining also contribute a lot to GDP. As the most isolated country in the world, there are still millions of tourists travel to North Korea every year, service contribute 32.2% to its GDP. In 2015, the per capita GDP(PPP) in North Korea is $1700, it ranks 213 world wild, which is almost the poorest country in the world. Because of special county system, in terms of “communism” , people are not allowed to have private property, it means individual own nothing. Government share resources to every household “fairly”, but of course not. The people who called “elite” owns 90% of the property and power in North Korea, these people consist not even 0.1% of population in this country. Currently North Korea is running -0.4% budget deficits, its revenue is $3.2 billion and expenditure is $3.3 billion. North Korea experiences a combination of continental climate and an oceanic climate, approximately 60% of all precipitation occurs from June to September. The daily average high and low temperatures for Pyongyang are −3 and −13 °C in January and 29 and 20 °C in August. Since 2002, the government has allowed semi-private markets to begin selling a wider range of goods, it also implemented changes in the management process of communal farms in an effort to boost agricultural output. But according to figure 1, the GDP per capita in North Korea seems nothing changed after 2002.
Korea is an independent country for long history, North Korea and South Korea used to be together until the second World War they split into two sides, two super power took over this country, Soviet Union took the north side of 38 parallel line, and the United States took over the south side of the 38 parallel line. In 1950, North Korea invaded South Korea, the Korean War began, China aid of North Korea, and United States aid of South Korea. This war lasted for 3 years, millions of people scarified during the war, and countless family were spitted, some of them in the North side and some of them in the South side. After the Korean War, Kim II Sung took over the power, and let it become an authoritarian country. Workers’ Party of Korea is the “majority government”, however, in North Korea party alternation does not exist, what they have is one-party system. Due to the North Korean political system, people do not have the right of believe other religion other than what they called “Juche Idea” which created by the former leader Kim II Sung. People in North Korea are forced to believe in this religion and have to allegiance to Kim’s family.
Since North Korea established, this country started implement “centrally planned economy”, where investment and the allocation of capital goods is determined by an economy-wide plan of production, in addition, the economy of North Korea is a closed economy, it relies on self-reliant policy. After the
Korean War, both North Korea and South Korea were suffer from the massive destruction, where North Korea got aid of Soviet Union and China, during that period North Korea achieved a higher GDP growth rate than South Korea until 1965. Since 1961, the first 7 years plan launched in North Korea, its goal was to improve the standard of living. But this plan finally fail because of North Korea got less assist from Soviet Union due to Sino-Soviet split and the military pressure from the South side. Moreover, because of the debt issues, government mismanagement and inefficiency of the “planned economy” system(50% of profit is taxed), by the end of 1979, per capita of GDP in North.
Korea was ⅓ of the South Korea. Until the mid-1980s, Kim II Sung recognized North Korea should not stick with “self-reliant policy” and the economy should be open, then he raised another “7 years plan”, it established different kind of policy to attract foreign investment, and focus on international trade, furthermore, he decided to open the country to international tourists and cooperated with South Korean companies. However, by 1991 this plan was forced to stop due to chronic trade deficit and a large foreign debt, moreover the revolutions of 1989 and dissolution of the Soviet Union had an even bigger effect on its economy. These series events caused North Korea’s economy depressed, and without the assist of Soviet Union, its domestic food production dropped sharply. So at the meantime, Kim II Sung decided to carry out economic transformation, which is emphasize on agriculture. However, lack of fertilizer, natural disasters, and poor storage and transportation practices lets its economy worse than better, and caused the famine nationwide, millions of people died from starvation or hunger-related illnesses.
Kim Jong Un who is the grandson of Kim II Sung, he is the current leader of
North Korea, the most powerful dictator in the world, because North Korea is one of the nuclear weapon owning countries. Since 2006, North Korea conducted the first nuclear test by Kim Jong il, international society decided to imposed first sanction on North Korea which is called “United Nations Security
Council Resolution 1718” in 2006, and couple more within 10 years. In 2016,
United Union decided impose another sanction(United Nations Security Council Resolution 2270) on North Korea as the response to its fourth nuclear test. These sanctions including: Prohibit any country from leasing domestic vessels and aircraft and selling it to North Korea, All North Korean financial institutions must be closed(outside of North Korea), Prohibit the export of North Korea and imports of coal, and other specific natural resources, etc. As response to South Korea, they expel all the South Korean staff in Kaesong Industrial Region, and blocked roads that connect to South side, as the result, international trade in North Korea is almost completely stop, except for trading with China. Since 2015, the trading between China and North Korea already increased from 65% to over 90% (figure 2), as the biggest trading partner, China seems does not affected by any sanctions on North Korea, On the contrary, their trading relationship is getting closer. Their trading provide more foreign currency to Kim’s family under the international sanction, and they use the fund to develop nuclear weapon which harm the peace of the international society.
North Korea, as a communist country, we can easily expect it won’t be a rich country when we saw the example like Cuba, Laos and Vietnam, but
China is an exception. For many years, North Korea had no even growth on GDP, the main reason of that is Kim’s family close their economy, isolate themselves from the world to maintain dictatorship. Nowadays, the more you trade with other countries and richer you will get. When we compare to South Korea, they started at the same point after war, but South Korea is one of the Asian Tigers, its GDP per capita is 17 times of North Korea, and lots of famous brands like Samsung, Hyundai, LG are all from South Korea. These two countries share the same ethnic groups, same history except for system, system makes huge differences.
It is necessary for North Korea open their economy, communicate with the world instead of isolation. Moreover, they should attract foreign companies to invest, keep a low tax rate for foreign companies and give subsidize. Because China used to close their “door” and keep away from outside of the world, it makes Chinese economy stagnant until 1978. The former leader of China, Deng Xiaoping decided to reform Chinese economy, gave up “Planned Economy”. Their first stage was attract foreign investment, and learned their advanced skill, gave more power to private companies.
To get the assist from outside of the world, North Korea should give up nuclear weapon and follow the international rule to get rid of the sanctions that imposed on them. Once they decided to do it, South Korea can be the good guidance for them. South Korea can provide fund, management and advanced skill to encourage the North side, on the other hand, North Korea can also provide cheap labour to the South side, because they have no language barrier and cultural barrier, it can also save on transportation. In short term, this action can boost North Korea’s economy and narrow the gap between South Korea.
In next decade, North Korea will maintain the current status, because Kim’s family will put the regime at the first place. Once they open the economy, people will not trust them anymore, they will try to overthrow the regime. In 2013, Kim Jong Un executed his uncle Jang Song-thaek who wanted to open the economy, so that means it will only happen until the fallen of Kim’s regime.
I hope in the near future Kim’s regime will collapse and unify with South Korea, at least it can stabilize the situation on the Korean peninsula.
References:
https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html https://en.wikipedia.org/wiki/Economy_of_North_Korea https://tradingeconomics.com/north-korea/gdp-annual--rate https://en.wikipedia.org/wiki/Chinese_economic_reform https://en.wikipedia.org/wiki/United_Nations_Security_Council_Resolution_2270 https://en.wikipedia.org/wiki/Korea
http://www.maps-of-the-world.net/maps/maps-of-asia/maps-of-north-korea/map-of
-north-korean-nuclear-test-2006.jpg https://en.wikipedia.org/wiki/Jang_Song-thaek
http://www.politifact.com/truth-o-meter/statements/2017/may/01/rex-tillerson/do es-china-account-90-north-korean-trade-rex-tille/ https://en.wikipedia.org/wiki/China%E2%80%93North_Korea_relations http://atlas.media.mit.edu/en/profile/country/prk/
https://books.google.ca/books?id=z4XKBAAAQBAJ&pg=PA2&lpg=PA2&dq=North+kor ea+at+a+glance&source=bl&ots=HHwcTUZcRe&sig=W2gfAhngOizTLamTipjRXhfQq3 M&hl=en&sa=X&ved=0ahUKEwjrjdKYlajUAhVV3WMKHbE2CQ44ChDoAQgsMAI#v=o nepage&q&f=false
https://www.pri.org/stories/2017-02-15/north-koreas-trade-china-has-grown-tenfol d-15-years-which-gives-china-more https://tradingeconomics.com/north-korea/gdp-annual-growth-rate
https://www.reddit.com/r/dataisbeautiful/comments/20ptd2/gdp_per_capita_of_no rth_korea_south_korea_japan/
