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A Study on Basic Economic Dependence of North Korea in the First Decade of the 2000s and Its Effects

  • The Journal of Northeast Asia Research
  • Abbr : NEA
  • 2011, 26(2), pp.149-172
  • DOI : 10.18013/jnar.2011.26.2.007
  • Publisher : The Institute for Northeast Asia Research
  • Research Area : Social Science > Political Science > International Politics > International Relations / Cooperation

런밍 1

1중국 길림대학

Candidate

ABSTRACT

This study analysed the dependence of the basic economy in North Korea in the first decade of the 2000s and the effects of this dependance. The results had a few implications. First, North Korea has adhered to a planned economic system of socialism only in the northeast area regardless of trends in the world economy, such as the formation of blocks and unification, and has firmly adhered to an independent national economy building policy. Therefore, as the weight and role external trade occupies in economic development was supplementary, the North's dependence on external economic situations is extremely low. This indicates that North Korea's economy, in particular the northeast economy, will not be greatly affected by the external world economy. However, since the second nuclear test in North Korea, American economic restrictions on North Korea have increased. Also as the Lee Government of South Korea has stopped support for North Korea, arguing against a nuclear armed North Korea, its dependence on China has increased. This is based on the recognition that North Korea can depend on China. In particular, the North's dependence on China for strategic goods and support is acute. Second, North Korea has not realized the formation of multi-faceted external trade. It has had trade only with China, South Korea, Japan, Russia, and Thailand. In particular, the North's trade dependence on China and South Korea amounts to between 80 and 90% of its external trade. Because of this, it is anticipated that changes in economic policy towards North Korea by China and South Korea will affect its external economic activities and, will play an important role in the recovery, growth, and development of the internal economy of North Korea. Third, North Korea has depended heavily on China for strategic goods such as steel, crude oil, food, machinery, medical supplies, and daily necessities. This dependance is expected to continue for the forseeable future. Fourth, North Korea risked a collapsing economy in the mid and late 1990s and narrowly avoided collapse through external support. In the 21st century, it has realized its recovery, but it is still dependant on support from international society in order to maintain minimum sustainability. For this, support from South Korea and China is absolutely necessary. In particular, it can be said that China's support for North Korea in food and crude oil decides the life of North Korea. Fifth, in considering that North Korea has been pursuing more reinforced planned economic measures, which are opposite the ‘7.1 Economic Control Measures’ published in 2002, it seems that North Korea is still adhering to a closed policy against innovation and opening. In conclusion, it is difficult for North Korea to execute the internal innovation or external opening necessary to appear as a member of international society, and therefore, its economic dependence will be maintained or intensified. Sixth, in the 21st century, in particular as the Lee Government launched, economic relations between North Korea and China have developed significantly in quality and quantity, and this trend will continue.

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