Editing Economy of North Korea (section)

==External trade==

Statistics from North Korea's trade partners are collected by international organizations like the United Nations and the [[International Monetary Fund]], and by the South Korean [[Ministry of Unification]].

It has also been estimated that imports of arms from the Soviet Union in the period 1988 to 1990 accounted for around 30% of North Korea's total imports, and that between 1981 and 1989 North Korea earned approximately $4 billion from the export of arms, approximately 30% of North Korea's total exports in that period. The nominal dollar value of arms exports from North Korea in 1996 was estimated to have been around $50 million.

North Korea's foreign trade deteriorated in the 1990s. After hitting the bottom of $1.4 billion in 1998, it recovered slightly. North Korea's trade total in 2002 was $2.7 billion: only about 50% of $5.2 billion in 1988, even in nominal US dollars. These figures exclude intra-Korean trade, deemed internal, which rose in 2002 to $641 million. During the late 2000s trade grew strongly, almost tripling between 2007 and 2011 to $5.6 billion, with much of the growth being with China.<ref name="ft-20140220"/> By about 2010 external trade had returned to 1990 levels, and by 2014 was near double 1990 levels, with trade with China increasing from 50% of total trade in 2005 to near 90% in 2014.<ref name="38north-20151022">{{cite news |url=http://38north.org/2015/10/rfrank102215/ |title=North Korea's Foreign Trade |author=Ruediger Frank |publisher=U.S.–Korea Institute, Johns Hopkins University School of Advanced International Studies |work=[[38 North]] |date=October 22, 2015 |access-date=October 27, 2015 |url-status=dead |archive-url=https://web.archive.org/web/20151025155928/http://38north.org/2015/10/rfrank102215/ |archive-date=October 25, 2015 }}</ref> In 2015, it was estimated that exports to China were $2.3 billion—83% of total exports of $2.83 billion.<ref name=":0">{{Cite news|url=https://www.telegraph.co.uk/news/2018/02/23/paper-fuel-north-koreans-endure-widespread-shortages-sanctions/ |archive-url=https://ghostarchive.org/archive/20220112/https://www.telegraph.co.uk/news/2018/02/23/paper-fuel-north-koreans-endure-widespread-shortages-sanctions/ |archive-date=January 12, 2022 |url-access=subscription |url-status=live|title=From paper to fuel, North Koreans endure widespread shortages as sanctions take their toll|last=Ryall|first=Julian|date=February 23, 2018|work=The Daily Telegraph|access-date=February 23, 2018|language=en-GB|issn=0307-1235}}{{cbignore}}</ref>

In addition to Kaesŏng and Kŭmgang-san, other special economic areas were established at [[Sinuiju Special Administrative Region|Sinŭiju]] in the northwest (on the border with China), and at [[Rason|Rasŏn]] in the northeast (on the border with China and Russia).

[[Sanctions against North Korea|International sanctions]] impeded international trade to some degree, many related to [[North Korea and weapons of mass destruction|North Korea's development of weapons of mass destruction]]. United States President [[Barack Obama]] approved an executive order in April 2011 that declared "the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea is prohibited".<ref>{{cite web|url=http://www.heritage.org/Research/Reports/2011/10/The-US-Korea-Trade-Deals-Time-Has-Finally-Come |title=The U.S.–Korea Trade Deal's Time Has Finally Come |publisher=The Heritage Foundation |date=October 5, 2011 |access-date=October 9, 2011 |url-status=unfit |archive-url=https://web.archive.org/web/20111009015838/http://www.heritage.org/Research/Reports/2011/10/The-US-Korea-Trade-Deals-Time-Has-Finally-Come |archive-date=October 9, 2011 }}</ref> Operational sanctions included [[United Nations Security Council Resolution]]s [[United Nations Security Council Resolution 1695|1695]], [[United Nations Security Council Resolution 1718|1718]], [[United Nations Security Council Resolution 1874|1874]], [[United Nations Security Council Resolution 1928|1928]], [[United Nations Security Council Resolution 2087|2087]],<ref>{{cite web|url=https://www.un.org/ga/search/view_doc.asp?symbol=S/RES/2087(2013) |title=Resolution 2087 (2013) |publisher=[[United Nations Security Council]] |date=January 22, 2013 |access-date=January 7, 2014 |url-status=live |archive-url=https://web.archive.org/web/20131026045436/http://www.un.org/ga/search/view_doc.asp?symbol=S%2FRES%2F2087%282013%29 |archive-date=October 26, 2013 }}</ref> and [[United Nations Security Council Resolution 2094|2094]].<ref>{{cite web|url=https://www.un.org/ga/search/view_doc.asp?symbol=S/RES/2094(2013) |title=Resolution 2094 (2013) |publisher=United Nations Security Council |access-date=January 7, 2014 |url-status=live |archive-url=https://web.archive.org/web/20131226010912/http://www.un.org/ga/search/view_doc.asp?symbol=S%2FRES%2F2094%282013%29 |archive-date=December 26, 2013 }}</ref> Reports in 2018 indicated that trade sanctions (bans on almost all exports and the freezing of overseas accounts) were seriously affecting the economy. The main paper [[Rodong Sinmun]] was running short of paper and was publishing only a third of its normal print run, two energy plants supplying electricity to Pyongyang had to be shut down intermittently due to lack of coal, causing blackouts, coal mines were operating under capacity due to lack of fuel, coal could not be transported due to lack of fuel and food rations had been cut by half.<ref name=":0" />

The [[Taep'oong International Investment Group of Korea]] is the official company that manages oversea investments to North Korea.

After 1956, North Korea reached out to the [[Third World]] in the hope of making trade deals. However, according to analyst Benjamin R Young: "In the end, this approach proved ineffective, and Pyongyang never succeeded in developing robust trade relations with the [[Global South]] — a situation that appears unlikely to change anytime soon".<ref>{{cite news|url=https://www.nknews.org/2021/12/north-korean-capitalisms-failure-in-the-third-world/|title=North Korean capitalism's failure in the Third World|first=Benjamin R|last=Young|date=December 2, 2021|publisher=[[NK News]]|access-date=December 4, 2021|archive-date=January 29, 2023|archive-url=https://web.archive.org/web/20230129180247/https://www.nknews.org/2021/12/north-korean-capitalisms-failure-in-the-third-world/|url-status=live}}</ref>

===North–South economic ties===
North and South Korea's economic ties have fluctuated greatly over the past 30 years or so. In the late 1990s and most of the 2000s, north–south relations warmed under the [[Sunshine Policy]] of President [[Kim Dae-jung]]. Many firms agreed to invest in North Korea, encouraged by the South Korean government's commitment to cover their losses, should investment projects in the north fail to become profitable.{{Citation needed|date=July 2010}}

Following a 1988 decision by the South Korean Government to allow trade with the North (see [[Foreign relations of North Korea#Reunification Efforts Since 1971|Reunification efforts since 1971]]), South Korean firms began to import North Korean goods. Direct trade with the South began in the fall of 1990 after the unprecedented September 1990 meeting of the two Korean Prime Ministers. Trade between the countries increased from $18.8 million in 1989 to $333.4 million in 1999, much of it processing or assembly work undertaken in the North.

During this decade, the chairman of the South Korean company [[Daewoo]] visited North Korea and reached agreement on building a light industrial complex at [[Nampo|Namp'o]]. In other negotiations, [[Hyundai Asan]] obtained permission to bring tour groups by sea to [[Kumgang-san|Kŭmgang-san]] on the North Korea's southeast coast (see [[Kumgang-san Tourist Region|Kŭmgang-san Tourist Region]]), and more recently to construct the {{convert|800|acre|km2}} [[Kaesong Industrial Region|Kaesŏng Industrial Region]], near the [[Korean Demilitarized Zone]] (DMZ), at a cost of more than $1 billion.

In response to the summit between [[Kim Jong Il]] and Kim Dae-jung in 2000, North and South Korea agreed in August 2000 to reconnect the section of the [[Seoul]]–[[Pyongyang]] [[Gyeongui Line|Gyeongui Railway Line]] across the DMZ. In addition, the two governments said they would build a four-lane highway bypassing the truce village at [[Panmunjeom]].

TV commercials for [[Samsung]]'s [[Anycall]] cell phone featuring North Korean dancer [[Cho Myong-ae]] and South Korea's [[Lee Hyo-ri]] were first broadcast on June 11, 2006.<ref>{{usurped|1=[https://web.archive.org/web/20110719200207/http://www.korea-is-one.org/article.php3?id_article=2333 "Commercial unites stars from both sides of Korea"]}}. ''Korea is one''. June 3, 2006.</ref>

Trade with South Korea declined after [[Lee Myung-bak]] was elected President of South Korea in 2008, who reduced trade to put pressure on North Korea over nuclear matters. Trade with South Korea fell from $1.8 billion to $1.1 billion between 2007 and 2013, most of the remaining trade being through the Kaesŏng Industrial Region.<ref name="ft-20140220">{{cite news|url=http://www.ft.com/cms/s/0/f8fca490-9a23-11e3-a407-00144feab7de.html |title=South Korea has lost the North to China |author=Aidan Foster-Carter |newspaper=Financial Times |date=February 20, 2014 |access-date=April 1, 2014 |url-status=live |archive-url=https://web.archive.org/web/20140306054846/http://www.ft.com/cms/s/0/f8fca490-9a23-11e3-a407-00144feab7de.html |archive-date=March 6, 2014 }}</ref> The Park has been subject to frequent shutdowns due to political tensions.

===China===
{{main|China–North Korea relations #Trade}}

With the collapse of the Soviet Union, China has been North Korea's primary trading partner. Bilateral trade rose sharply after 2007. In 2007 trade between the two countries was $1.97 billion (₩1.7 trillion). By 2011 trade had increased to $5.6 billion (₩5.04 trillion).<ref>{{cite news|url=http://www.chinapost.com.tw/business/asia/korea/2012/12/28/365546/N-Koreas.htm |title=N. Korea's China trade nearly triples in 4 years |work=[[China Post]] |date=December 28, 2012 |access-date=January 7, 2014 |url-status=live |archive-url=https://web.archive.org/web/20140107162830/http://www.chinapost.com.tw/business/asia/korea/2012/12/28/365546/N-Koreas.htm |archive-date=January 7, 2014 }}</ref> Trade with China represented 57% of North Korea's imports and 42% of exports.

Chinese statistics for 2013 indicate that North Korean exports to China were nearly $3 billion, with imports of about $3.6 billion.<ref name="ft-20140220"/> Exports to China in 2015 were estimated at $2.3 billion.<ref name=":0" />

===Joint ventures===
Some South Korean companies launched joint ventures in areas like animation and computer software, and Chinese traders have done a booming business back and forth across the [[China–North Korea border]]. In a 2007 survey of 250 Chinese operations in North Korea, a majority reported paying bribes.<ref>{{cite magazine|url=https://www.forbes.com/forbes/2011/1024/feature-invade-north-korea-cola-gabriel-schulze-gady-epstein_2.html |title=Invading North Korea |magazine=Forbes |date=October 24, 2011 |access-date=October 9, 2011 |url-status=dead |archive-url=https://web.archive.org/web/20111009090524/http://www.forbes.com/forbes/2011/1024/feature-invade-north-korea-cola-gabriel-schulze-gady-epstein_2.html |archive-date=October 9, 2011 }}</ref> Robert Suter, who headed the Seoul office of Swedish-Swiss power generation company [[ABB]], says ABB was staking out a position in North Korea, "It is the same as it was in China years ago. You had to be there and you had to build trust." A number of South Korean enterprises were mainly active in a specially developed industrial zone in Kaesŏng Industrial Region and Chinese enterprises were known to be involved in a variety of activities in trade and manufacturing in North Korea. European enterprises founded in 2005 the European Business Association (EBA), Pyongyang, a ''de facto'' [[chamber of commerce]] representing a number of European-invested joint ventures and other businesses.<ref>"Pyongyang Business Group celebrates 1st anniversary". ''[[The Korea Herald]]''. April 28, 2006.</ref> [[Ch'ongryŏn]], the pro-North Korean General Association of Korean Residents in Japan, broadcast on their TV channel in 2008 a TV film in three parts featuring foreign investment and business in North Korea. This film was put on a [[YouTube]] channel called "BusinessNK" and could be watched together with a number of other videos on foreign joint ventures as well as other investment and business activities in North Korea.

Though no international banks operated in the isolated socialist state in 2013, foreign companies were said to be increasingly interested in dealing with North Korea.<ref name="baron-20130311">{{cite web |url=http://38north.org/2013/03/jbaron031113/ |title=Book Review: A CAPITALIST IN NORTH KOREA |author=Jeff Baron |work=[[38 North]] |publisher=School of Advanced International Studies |date=March 11, 2013 |access-date=March 11, 2013 |url-status=dead |archive-url=https://web.archive.org/web/20130313063643/http://38north.org/2013/03/jbaron031113/ |archive-date=March 13, 2013 }}</ref>

A flat LCD television factory in North Korea was funded by the Ch'ongryŏn in 2010.<ref>{{cite news|first=Seong-Jin |last=Kim |script-title=ko:"평양서 슬림.평면형 TV 인기"<조선신보> |date=January 20, 2010 |url=http://www.yonhapnews.co.kr/politics/2010/01/19/0511000000AKR20100119223000014.HTML |work=[[Yonhap News Agency]] |access-date=January 31, 2010 |language=ko |url-status=live |archive-url=https://web.archive.org/web/20110610141118/http://www.yonhapnews.co.kr/politics/2010/01/19/0511000000AKR20100119223000014.HTML |archive-date=June 10, 2011 }}</ref>

The [[Rason Special Economic Zone]] was established in the early 1990s, in the northeastern corner of the country bordering China and Russia. In June 2011, an agreement with China was made to establish a joint free trade area on North Korea's [[Hwanggumpyong Island|Hwanggumpyong]] and [[Wihwa Island]]s and China's border area near [[Dandong]].<ref name="38north-20100729">{{cite web|url=http://38north.org/2012/02/hgp021712/ |title=China's Embrace of North Korea: The Curious Case of the Hwanggumpyong Island Economic Zone |author1=Robert Kelley |author2=Michael Zagurek |author3=Bradley O. Babson |work=[[38 North]] |publisher=U.S.–Korea Institute, Johns Hopkins University School of Advanced International Studies |date=February 19, 2012 |access-date=March 1, 2012 |url-status=live |archive-url=https://web.archive.org/web/20120224134715/http://38north.org/2012/02/hgp021712/ |archive-date=February 24, 2012 }}</ref>
North Korea designated over a dozen new [[Special economic zone (North Korea)|special economic zones]] in 2013 and 2014.<ref name="38north-20180716">{{cite web |author=Benjamin Katzeff Silberstein, [[Patrick M. Cronin]] |date=July 16, 2018 |title=How the North Korean Economy Should – and Shouldn't – be Used in Negotiations |url=https://www.38north.org/2018/07/bksilbersteinpcronin071618/ |access-date=July 24, 2018 |work=[[38 North]] |publisher=The Henry L. Stimson Center |archive-date=July 23, 2018 |archive-url=https://web.archive.org/web/20180723183642/https://www.38north.org/2018/07/bksilbersteinpcronin071618/ |url-status=live }}</ref>