N. Korea economy grows at fastest pace in 17 years

  • Economy
  • Friday, 21 Jul 2017

Seoul: Despite global sanctions over its weapons programmes, North Korea’s economy grew at the fastest pace in 17 years thanks to a jump in exports and increased production in mining and other industries, South Korea's central bank said on Friday.

The Bank of Korea (BoK) said the North’s gross domestic product grew 3.9% last year - the fastest since 1999 when it expanded 6.1%.

The hermit state does not officially release its economic data, and the BoK releases its annual estimates based on data compiled from state and private organisations. 

The impoverished North has faced several rounds of UN sanctions over its push to develop nuclear weapons and relies heavily on neighbouring China - its sole ally and biggest trading partner - for fuel imports and mining exports.

Production in the mining sector - which accounts for 12.6% of the country’s economy - increased 8.4%.

Production at heavy and chemical industries, also a key contributor to the economy, rose 6.7%, while overall exports expanded 4.6%, partly due to shipments of lucrative mineral resources.

China in February stopped coal imports from the North, facing increasing pressure from US President Donald Trump to tame its unpredictable neighbour, but has continued to trade other commodities including iron and iron ore, providing a lifeline to the isolated regime.

China is reluctant to rattle the North’s status quo, fearing an influx of refugees and the potential presence of US troops along its border under an unified Korea.

Despite sanctions, the North’s economy has expanded due to the recent proliferation of hundreds of state-endorsed private markets where vendors sell everything from food to electronic gadgets imported from China.

Although North Korea denies any plans to reform and claims to be socialist, the regime has gradually opened the door to private enterprise under leader Kim Jong-Un, experts say.

Kim has also ratcheted up the country’s nuclear programme, spending heavily to develop missiles that can hit the US mainland.

Analysts estimate that the private sector, broadly defined, could be responsible for anything from a quarter to half of the North’s gross domestic product. - AFP
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