Introduction

How did North Korea’s defense industry perform in the second half of 2016? This is a difficult question to answer as data on North Korea are generally difficult to obtain, and even if they have been, credibility cannot be guaranteed. However, the limited data available on North Korea’s defense industry and Kim Jong-un’s recent directions and policies offer some clues. The industry exhibited relatively strong performance in the second half of 2016 compared to the yearly average. As a result, the capacity utilization of military supplies factories seems to have been higher than average; missile production looks to have been the most vibrant subsector during the period. North Korea committed itself to nuclear development in 2016, conducting a number of nuclear and missile tests. Therefore, the capacity utilization of factories that produce end-products and parts related to the tests would have been relatively higher.

Nevertheless, this is hard to prove with specific figures for multiple reasons. Essentially, economic performance and records can be accurately expressed and are easy to understand when presented with specific figures. This is why statistics and various measures are used in economic analysis. The North Korean regime, however, rarely publishes its performance data and obtaining relevant figures from other sources is almost impossible. Therefore, various circumstantial data are used to assess the country’s performance; although this is an indirect method. Ultimately, this represents the constraints of studies on North Korea, including those on its economy.

The same kind of problem also occurs in the study of North Korea’s defense industry. In fact, the problem is more serious because of the exclusiveness of the military and the confidential nature of security issue. Thus, it is inherently difficult to apply figures to analyses and related performance assessments of the North’s defense industry. However, available qualitative data can be used. Accordingly, this chapter adopts a qualitative method to analyze the trends in and performance of North Korea’s defense industry in the second half of 2016.

* This article is part of 2016 The DPRK Economic Outlook

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