North Korea

IV

Economy

With the establishment of the Democratic People’s Republic of Korea in 1948 all industry was nationalized and agriculture was collectivized. North Korea has operated a centrally planned command economy ever since. Successive economic plans have given emphasis to development of heavy industry and to mechanization of agriculture. The gross national product (GNP) in 1995 was US$20,000 million (US$1,000 per capita). Few reliable statistics are available from North Korea, and estimates are based on South Korean sources. It is estimated that the North Korean economy has recently been contracting, by up to 5 per cent in 1992 and at greater speed since, as an agrarian crisis has taken hold. The estimated national budget for 1992 was US$19,300 million in revenue and expenditure, 40 per cent of which is customarily allocated to military expenditure.

A

Agriculture, Forestry, and Fishing

Agriculture in North Korea is collectively organized, though some smallholdings exist. Large-scale mechanization, irrigation, and land reclamation have increased crop yields. The principal crops (with their yields for 2005) include rice (2.50 million tonnes), maize (1.60 million), and potatoes (2.07 million). Other important crops are millet, barley, wheat, vegetables, apples, sweet potatoes, and soya beans. Livestock number about 3.20 million pigs, 578,000 cattle, 172,000 sheep, and 26.5 million chickens. Actual agricultural production is now acknowledged as being in catastrophic decline, owing to severe floods and structural deficiencies, with the country facing frequent widespread famines.

Annual production of roundwood stands at about 7.30 million cu m (258 million cu ft). North Korea has a modern fishing fleet; the total annual catch in 2004 estimate was 268,700 tonnes, largely anchovy, tuna, and mackerel.

B

Mining

Mining is an important sector of the North Korean economy, and efforts are being made to develop new deposits. The focus has been on iron ore and coal mines, which had, in 2004, outputs of 1.30 million and 30 million tonnes respectively. Other important minerals include tungsten, magnesite, zinc, copper, lead, silver, and gold.

C

Manufacturing

Metallurgical industries and the manufacture of heavy machinery represent a major share of North Korea’s national income. Output of pig iron amounted to 6.6 million tonnes per year in the early 1990s; crude steel totalled 8.1 million tonnes. Other manufactures include trucks, diesel locomotives, heavy construction equipment, cement, synthetic fibres, fertilizers, and refined copper, lead, zinc, and aluminium.

D

Energy

North Korea is well endowed with hydroelectric resources, which account for nearly 56 per cent of the annual electrical output. In 1993 electricity consumption was about 17 billion kWh. However, a fall-off in energy supplies after 1992—caused by the end of cheap fuel deliveries from China and the former Soviet Union—led to a reported halving of industrial productivity. Exploration for petroleum has been undertaken, but no production has begun as yet. A nuclear power plant under construction is to be supplanted by two light-water reactors provided by the United States and South Korea.