North Korea Economic Overview
The conquest of Korea by Japan at the beginning of the twentieth century had a profound impact on the country’s economic-productive systems. The traditionally agricultural soul of Korea was not canceled, on the contrary it was supported, to be honest especially in the S, with the extension, for example, of the areas cultivated with rice, which was exported to Japan in large quantities. Significant improvements were made to the communication routes and increased port facilities suitable for intense commercial exchanges; the decisive element, however, was the start of the mining exploitation and industrialization of the country. From these assumptions, a marked economic differentiation was defined between the two parts of the peninsula; in North Korea, which could boast greater mineral resources and a significant hydroelectric potential, industrial activity was concentrated, especially metalworking, also fueled by minerals from the contiguous Manchuria, also Japanese since 1931. The establishment, in 1953, of two separate national entities it determined the further and definitive differentiation between the Koreas: based on even antithetical political and ideological regimes, the two states also pursued clearly different economic directions, one capitalist and liberal, the other rigidly socialist and planned. North Korea, even at the beginning of the third millennium, continues its strictly controlled economic policy marked by the timely implementation of subsequent development plans which, started in 1954, they aim to achieve a production process equally shared between industry and agriculture.
According to cheeroutdoor, the economic bases of the country have been strongly industrial since its origins: this finds its premises in the great mineral wealth of the country and in the “legacy” of the industrial setting already started by the Japanese. At the time of the division between the two states, North Korea concentrated over 80% of industrial equipment and installed electrical power; agriculture was rather lacking, while large opportunities for exploitation offered the conspicuous forestry heritage. Land reform, nationalization of natural resources and industries, economic planning according to the typical scheme of the Soviet approach, with absolute priority of the basic sectors and the on the other hand, rather small investments in the consumer goods industry (which only registered a certain increase in the 1970s and which in any case remains very deficient compared to that of South Korea), were the main economic policy orientations of the new government. Much of the land confiscated from the Japanese was first assigned free of charge to the peasants, but starting from 1953 land collectivization was introduced, practically completed in 1958 when, on the model of the Chinese municipalities, the pre-existing cooperatives were merged into just over 3,800 agricultural units. to which 90% of the land belongs (the remaining 10% is state owned). This made it possible to implement the mechanization of agricultural work, to carry out impressive works of irrigation (one third of the land is irrigated) thus acquiring new arable areas, finally making massive use of fertilizers, so that in a short time production increased significantly; in 1968 the food self-sufficiency of the country was guaranteed, previously forced to conspicuous cereal imports. Developed at a good pace, thanks above all to the country’s huge mineral resources, the North Korean economy suffered a setback in the 1980s due to a series of structural and cyclical causes. The decrease in Chinese aid and the interruption of Soviet support in the early nineties further aggravated the economic and social crisis of the country, also prostrated by the long famine, which at the end of the twentieth century caused about 2, 5-3 million victims, mainly among children.
The Pyongyang authorities admitted in 1997 that they were able to feed only half of the population and many countries and organizations, such as the FAO and UNICEF have mobilized to send food and basic necessities. Despite these interventions, which are not continuous due to the provisions of the same North Korean leaders who periodically limit their action, as happened in September 2005, the country has never achieved food self-sufficiency. As for the industry, it has certainly suffered from the collapse of the USSR and the lack of advanced technologies, hence the opening to foreign capital through joint ventures., creation of free zones and special economic zones. Formally there are 25 special economic zones dedicated to companies with foreign capital. The industrial area of Gaeseong, started in 2002 in collaboration with South Korea, was closed in 2016. In any case, North Korea tries to achieve solid foundations for its economy and to carry out ambitious projects in the social, welfare and public works; but serious deficiencies continue to appear in the sector of advanced technologies, necessary to support the intense production development programs and which North Korea is still forced to import, fueling the growing foreign debt, the most alarming figure remains the widespread need of primary goods for many of the residents of a land periodically hit by natural disasters. The tight control exercised by the state has partly eased with the granting of a certain degree of autonomy to state enterprises; some private activities, even if not recognized, are in fact tolerated. The new management established a parallel development plan in 2013 (byungjin) of economics and defense policy, but the initiatives announced for the development of the obsolete agricultural and industrial production sector and for the creation of special economic zones open to foreign investors have remained largely unimplemented. Agricultural crops are constantly insufficient; to meet food needs and guarantee citizens basic medicines, the country depends on foreign aid.
