North Korea economy: Going nowhere.
November 21, 2009 by Muhammad Haidar
Filed under Banking, Business, Countries, Current Events, Economics, Finance, Investing, Liquidity, Loans, Muhammad Haidar
Among the last of the communist bastions, and arguably the least open of economies, North Korea is seen to be on the brink of economic collapse by its rivals, including South Korea. It is even said that the United States and its allies have a contingency plan in case of a sudden flare up in North Korea, leading to its downfall of its present regime.
The North Korean economy is a highly centralized one and a good part of it is dedicated to cater to the demands of the military. The diversion of resources, as such scarce, for defence purposes, has left the civilian sector starved of development funds. Almost all the sectors of the economy are stunted, and in need of new investments to make them properly functional.
The agricultural sector is in dire need of developmental funds, and the country is reduced to depend on food aid from various quarters. Among the agricultural produce is rice, corn, pulses, soybean, etc. The industrial sector hosts machine building, chemicals, textiles, food processing, etc. Mining is also an important activity, and includes coal, iron, zinc, copper, lead, graphite, and certain precious metals. The country exports minerals, agricultural products, textiles, armaments, etc. It in turn imports machinery and equipment, food grains, petroleum, etc. China and South Korea are the main trading partners of North Korea. Other include Russia, India, Thailand, etc.
Statistics about vital economic parameters are hard to come by, but the North Korea economy is expected to grow overall by about 3% in 2009. The country is burdened with a huge external debt. And the country’s poor external relations, especially with the United States have compunded its economic problems. In particular, its nuclear program is a target of the West, especially the U.S., rightly or wrongly.
The North Korean regime, of late, is seen slowly moving towards more openness, and a major change in its international relations and economic system is likely to have great repercussions in its region.