North Korean Economy Rebounds on Farm Output, South Says

North Korea’s economy rebounded last year on a recovery in agriculture, bolstering Kim Jong Un after he succeeded his father to lead the nation where a past famine killed an estimated 3 million people.

Gross domestic product in the communist nation increased 0.8 percent in 2011 after a 0.5 percent decline in 2010, according to an estimate published by the Bank of Korea in Seoul. The nation’s economy has contracted during four of the last six years, the bank’s data show.

“The manufacturing sector declined, but the agricultural industry enjoyed better weather and more use of fertilizer,” the Bank of Korea said in an e-mailed statement.

North Korea is projected to keep growing under the new leader as its economic ties with China and Russia develop.

“Mineral exports to China and dollars brought in by North Korean workers sent to China and Russia would have driven the country’s GDP growth,” said Koh Yu Hwan, a professor of North Korean studies at Dongguk University in Seoul. “North Korea is expected to be economically stronger under Kim Jong Un as it continues to increase transactions with its allies.”

Kim Jong Un, who took power in December, oversaw the launching of a long-range rocket on April 13 that deepened the North Korea’s isolation. The U.S. canceled a February deal for 240,000 metric tons of food aid in exchange for a halt on nuclear weapons and missile tests, and the United Nations Security Council also widened existing sanctions.

‘Turn in Agriculture’

Kim Jong Un has waged a nationwide campaign to “bring about a turn in agriculture” and increase crop yields, according to a June 7 report carried by the official Korean Central News Agency. North Korea’s agriculture and fisheries sector expanded 5.3 percent in 2011 while manufacturing fell 3 percent, according to the BOK report.

North Korea’s nominal GDP totaled 32 trillion won ($28 billion) in 2011, compared with South Korea’s 1,237 trillion won, the BOK said. North Korea’s per capita income was 1.33 million won while South Korea’s was 25 million won, according to its estimates.

After adjusting for inflation, North Korea’s economy remained smaller at the end of 2011 than it had been in 2008, according to the Bank of Korea.

North Korea doesn’t release official economic data. South Korea’s central bank releases an annual estimate of North Korea’s economic growth, based on information from the National Intelligence Service and other related organizations.

Food Insecurity

Some 16 million of North Korea’s 24 million people suffer from chronic food insecurity, high malnutrition rates and deep-rooted economic problems, Jerome Sauvage, United Nations resident coordinator in Pyongyang, said in a June 12 statement. The cereal deficit for last year was estimated at 739,000 metric tons, according to Sauvage.

The estimated death toll from years of famine during the late 1990s, the worst in the North’s history, ranges from 1 to 3 million people, out of an estimated population of around 22 million at that time, according to Rajiv Biswas, Asia-Pacific Chief Economist at IHS Global Insight.

North Korea’s population rose to 24.3 million last year from 24.2 million in 2010, about half of South Korea’s. Inter-Korean trade fell 10.4 percent from a year earlier to $1.7 billion last year, South Korea’s central bank said.

Exports, except for shipments to South Korea, rose 84.2 percent to $2.8 billion last year, driven by minerals, base metals, and textiles, BOK said. Imports rose 32.6 percent to $3.5 billion in 2011, according to the central bank report.

China, North Korea’s closest ally, is also its largest trading partner. North Korea’s total foreign trade grew 51 percent last year, boosted by rising mineral exports to China to secure foreign currency for funding events such as centenary celebration of state founder Kim Il Sung’s birth, the report said.

Agriculture and fisheries account for 23 percent of North Korea’s economy, compared with 2.7 percent for South Korea, according to the report. Manufacturing represents 22 percent of the North’s GDP, while it amounts to 31 percent in South Korea, according to the central bank.

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