Analyzing the North Korean Economy and Drawing Policy Implications The office monitors trends and conditions of the North Korean economy and recommends policies in promoting greater inter-Korean cooperation and laying the foundations for economic integration.
KDIDecember 31, 2019
For the DPRK economy, 2019 was a turning point towards the unknown. Whether it be entering a full-on crisis resulting from the international sanctions set in place since 2016, or finding a way out of the disequilibrium and salvaging some form of stability, it should have been the year that decided the fate of the North Korean economy. Based on the observations, however, the direction in which it is headed is unclear. The majority of outside observers claim that the North Korean economy escaped the grip of sanctions, and is slowly regaining its footing. Meanwhile, others believe that the crisis reached its peak, asserting that the North Korean economy only “looks” stable because it is in the eye of the storm; once it passes, disaster will hit.
March 20, 2020
Researchers who study the North Korean economy point out Dollarization as one of the most distinctive features. Please tell us about the current status of the phenomenon. Dollarization refers to the use of the US dollar (or any other foreign currencies) instead of or in addition to the domestic currency. In the case of North Korea, it would be more appropriate to call it yuanization rather than dollarization as the Chinese yuan is more commonly used than the US dollar. Still, in mainstream economics, dollarization is a term of choice when the dollar is used in parallel with other foreign currencies, and thus, I would like to use the term dollarization for this article. Dollarization has become a widespread phenomenon in North Korea. It is thus important to understand the causes, features, effects on the economy, and responses from the North Korean government. Also, it is critical to examine the phenomenon in diverse angles to have a deeper understanding of the recent status of the North’s economy. Usually, dollarization occurs to only some parts of an economy and can be categorized by its degree of progression. Lee Seog-ki et al. (2012, p.46) argued, “In most cases, foreign currencies are first used as a substitute to the domestic currency to store the value of assets, and as the practice moves forward, they substitute the domestic currency as a medium of exchange or a measure of value
Hyoungsoo ZangJuly 24, 2020
We first introduce and summarize preceding research on the balance of foreign exchange (BFE) of North Koreans (1991？2017) based on the method used by Zang (2009, 2013) and Zang and Kim (2019). Then, we present new estimates for the BFE of North Koreans in 2018 (including North Korea’s earnings from cyberattacks). Combining all of the results, we present a new estimate of the current foreign exchange holdings of North Koreans at end-2018. We also discuss how to estimate the foreign exchange holdings of North Koreans in the unofficial sector. Finally, we could present some guidelines to understand the responses from the North Korean authorities on international sanctions as well as North Korea-US dialogues.
Kyung Sool KimDecember 30, 2019
North Korea has two crude oil refining facilities of which total capacity is known as 3.5 million ton of oil per year. Seungri chemical plant, which has a 2 million ton of oil capacity, has ceased its production since early 1990 while Bongwha chemical plant of which capacity is 1.5 million ton of oil is partially under operation. Around 0.5 million ton of crude oil is delivered to Bonghwa plant every year through a North Korea-China Friendship Pipeline. The sum of petroleum products from crude oil refining in Bongwha chemical plant and petroleum products imported officially are the total official supply of petroleum products in the country. However, as the market demand rapidly increases, the supply and demand are subsequently adjusted via diverse smuggling routes. Thus, the structure of oil industry of North Korea consists of two different structure, official supply of government and unofficial smuggling of market. United Nations Security Council resolution 2397 which limits refined oil import to 0.5 million barrel per year is considered as a critical barrier for North Korean economy.
Kim, KyoochulDecember 31, 2018
This paper examines the details of North Korea’s oil import, consumption, distribution and price-setting mechanism.
Monthly published paper on the current status of the North Korean economy and major issues on inter-Korean economic cooperation assisting academia, policy makers and corporate sectors to better understand North Korea
Kyoochul KimSeptember 05, 2018