Floods Make N.Korean Economy Shrink Further - Seoul
Date: 18-Jun-08
Country: SOUTH KOREA
North Korea's economy is weaker now than it was 20 years ago and experts said it faces a food shortage this year that rivals the ones it saw in the mid to late 1990s when famine killed an estimated 1 million of its 23 million people.
The Bank of Korea estimated that North Korea's gross domestic product (GDP) for last year was 20.7 trillion won (US$20.2 billion), down from 21.2 trillion won in 2006 despite the country's location in the middle of one of the world's most vibrant economic regions.
"It is presumed that difficulties persisted throughout the economy as the food shortage problem deepened due to the decline in agricultural production," the bank said in a report.
North Korea's economy had grown by 6.2 percent in 1999, the start of a seven-year streak that pushed its GDP from just under 19 trillion won that year to about 21.5 trillion won in 2005.
But 2006 saw a return to economic decline as the North was hit by UN sanctions for defying international warnings and going through with a nuclear test.
North Korea's per capita income was just over US$1,000 compared with about US$20,000 for South Korea.
Shunned for its nuclear weapons programme and widely criticised human rights record, North Korea could gain greater access to global finance if it abides by a six-way disarmament deal and gives a full accounting of its nuclear material.
Analysts have long blamed the oppressive rule of Asia's only communist dynasty for isolating the relatively resource-rich state from the surge that has made neighbours Japan, China and South Korea global economic powers.
(US$1=1023.3 Won)
(Reporting by Jack Kim; Editing by Jon Herskovitz and Roger Crabb)