| Date - Field | Korea_North - Economy - overview |
2008 January
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. Industrial and power output have declined in parallel from pre-1990 levels. Due in part to severe summer flooding followed by dry weather conditions in the fall of 2006, the nation suffered its 13th year of food shortages because of 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. Large-scale military spending draws off resources needed for investment and civilian consumption. Since 2002, the government has formalized an arrangement whereby private "farmers' markets" were allowed 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. During the October 2007 summit, South Korea also agreed to develop some of North Korea's infrastructure and natural resources. Firm political control remains the Communist government's overriding concern, which will likely inhibit the loosening of economic regulations. |
2007 January
Economy - overview | North Korea, one of the world's most centrally planned and isolated economies, faces desperate economic conditions. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and shortages of spare parts. Industrial and power output have declined in parallel. Due in part to severe summer flooding followed by dry weather conditions in the fall of 2006, the nation has suffered its 12th year of food shortages because of on-going systemic problems, including a lack of arable land, collective farming practices, and chronic shortages of tractors and fuel. Massive international food aid deliveries have allowed the people of North Korea to escape mass starvation since famine threatened in 1995, but the population continues to suffer from prolonged malnutrition and poor living conditions. Large-scale military spending eats up resources needed for investment and civilian consumption. In 2004, the regime formalized an arrangement whereby private "farmers markets" were allowed 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 regime reversed some of these policies by forbidding private sales of grains and reinstituting a centralized food rationing system. By December 2005, the regime terminated most international humanitarian assistance operations in the DPRK (calling instead for developmental assistance only) and restricted the activities of remaining international and non-governmental aid organizations such as the World Food Program. Firm political control remains the Communist government's overriding concern, which will likely inhibit the loosening of economic regulations. |
2006 January
Economy - overview | North Korea, one of the world's most centrally planned and isolated economies, faces desperate economic conditions. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and spare parts shortages. Industrial and power output have declined in parallel. The nation has suffered its eleventh year of food shortages because of a lack of arable land, collective farming, weather-related problems, and chronic shortages of fertilizer and fuel. Massive international food aid deliveries have allowed the regime to escape mass starvation since 1995, but the population remains the victim of prolonged malnutrition and deteriorating living conditions. Large-scale military spending eats up resources needed for investment and civilian consumption. In July 2002, the government took limited steps toward a freer market economy. In 2004, heightened political tensions with key donor countries and general donor fatigue threatened the flow of desperately needed food aid and fuel aid. Black market prices have continued to rise following the increase in official prices and wages in the summer of 2002, leaving some vulnerable groups, such as the elderly and unemployed, less able to buy goods. In 2004, the regime allowed private markets to sell a wider range of goods and permitted private farming on an experimental basis in an effort to boost agricultural output. Firm political control remains the Communist government's overriding concern, which will constrain any further loosening of economic regulations. |
2005 January
Economy - overview | North Korea, one of the world's most centrally planned and isolated economies, faces desperate economic conditions. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and spare parts shortages. Industrial and power output have declined in parallel. The nation has suffered its eleventh year of food shortages because of a lack of arable land, collective farming, weather-related problems, and chronic shortages of fertilizer and fuel. Massive international food aid deliveries have allowed the regime to escape mass starvation since 1995, but the population remains the victim of prolonged malnutrition and deteriorating living conditions. Large-scale military spending eats up resources needed for investment and civilian consumption. In July 2002, the government took limited steps toward a freer market economy. In 2004, heightened political tensions with key donor countries and general donor fatigue threatened the flow of desperately needed food aid and fuel aid. Black market prices have continued to rise following the increase in official prices and wages in the summer of 2002, leaving some vulnerable groups, such as the elderly and unemployed, less able to buy goods. In 2004, the regime allowed private markets to sell a wider range of goods and permitted private farming on an experimental basis in an effort to boost agricultural output. Firm political control remains the Communist government's overriding concern, which will constrain any further loosening of economic regulations. |
2004 January
Economy - overview | North Korea, one of the world's most centrally planned and isolated economies, faces desperate economic conditions. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and spare parts shortages. Industrial and power output have declined in parallel. The nation has suffered its tenth year of food shortages because of a lack of arable land, collective farming, weather-related problems, and chronic shortages of fertilizer and fuel. Massive international food aid deliveries have allowed the regime to escape mass starvation since 1995-96, but the population remains the victim of prolonged malnutrition and deteriorating living conditions. Large-scale military spending eats up resources needed for investment and civilian consumption. In 2003, heightened political tensions with key donor countries and general donor fatigue threatened the flow of desperately needed food aid and fuel aid as well. Black market prices continued to rise following the increase in official prices and wages in the summer of 2002, leaving some vulnerable groups, such as the elderly and unemployed, less able to buy goods. The regime, however, relaxed restrictions on farmers' market activities in spring 2003, leading to an expansion of market activity. |
2003 January
Economy - overview | North Korea, one of the world's most centrally planned and isolated economies, faces desperate economic conditions. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and spare parts shortages. Industrial and power output have declined in parallel. Despite a good harvest in 2001, the nation faces its ninth year of food shortages because of a lack of arable land; collective farming; weather-related problems, including major drought in 2000; and chronic shortages of fertilizer and fuel. Massive international food aid deliveries have allowed the regime to escape mass starvation since 1995-96, but the population remains vulnerable to prolonged malnutrition and deteriorating living conditions. Large-scale military spending eats up resources needed for investment and civilian consumption. Recently, the regime has placed emphasis on earning hard currency, developing information technology, addressing power shortages, and attracting foreign aid, but in no way at the expense of relinquishing central control over key national assets or undergoing widespread market-oriented reforms. In 2002, heightened political tensions with key donor countries and general donor fatigue have held down the flow of desperately needed food aid and threaten fuel aid as well. |
2002 January
Economy - overview | North Korea, one of the world's most centrally planned and isolated economies, faces desperate economic conditions. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and spare parts shortages. Industrial and power output have declined in parallel. Despite a good harvest in 2001, the nation faces its eighth year of food shortages because of a lack of arable land; collective farming; weather-related problems, including major drought in 2000; and chronic shortages of fertilizer and fuel. Massive international food aid deliveries have allowed the regime to escape mass starvation since 1995-96, but the population remains vulnerable to prolonged malnutrition and deteriorating living conditions. Large-scale military spending eats up resources needed for investment and civilian consumption. In 2001, the regime placed emphasis on earning hard currency, developing information technology, addressing power shortages, and attracting foreign aid, but in no way at the expense of relinquishing central control over key national assets or undergoing widespread market-oriented reforms. |
2001 January
Economy - overview | North Korea, one of the world's most centrally planned and isolated economies, faces desperate economic conditions. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and spare parts shortages. The nation faces its seventh year of food shortages because of weather-related problems, including major drought in 2000, and chronic shortages of fertilizer and fuel. Massive international food aid deliveries have allowed the regime to escape the major consequence of spreading economic failure, such as mass starvation, but the population remains vulnerable to prolonged malnutrition and deteriorating living conditions. Large-scale military spending eats up resources needed for expanding investment and consumption goods. In 2000, the regime placed emphasis on expanding foreign trade links, embracing modern technology, and attracting foreign investment, but in no way at the expense of relinquishing central control over key national assets or undergoing market-oriented reforms. |
2000 January
Economy - overview | North Korea ranks among the world's most centrally planned and isolated economies. The resulting economic distortions and the government's reluctance to publicize economic data limit the amount of reliable information available. State-owned industry produces nearly all manufactured goods, and the regime continues to devote its focus on heavy and military industries at the expense of light and consumer industries. Economic conditions remain stagnant at best and the country's deepening economic slide has been fueled by acute energy shortages, poorly maintained and aging industrial facilities, and a lack of new investment. The agricultural outlook, though slightly improved over previous years, remains weak. The combined effects of serious fertilizer shortages, successive natural disasters, and structural constraints - such as marginal arable land and a short growing season - have reduced staple grain output to more than 1 million tons less than what the country needs to meet even minimum international requirements. The steady flow of international food aid has been critical in meeting the population's basic food needs. The impact of other forms of humanitarian assistance such as medical supplies and agricultural assistance largely has been limited to local areas. Even with aid, malnutrition rates are among the world's highest and estimates of mortality range in the hundreds of thousands as a direct result of starvation or famine-related diseases. |
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This page was last updated on 23 July, 2008 |
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