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Russia vs. North Korea

Economy

RussiaNorth Korea
Economy - overview

Russia has undergone significant changes since the collapse of the Soviet Union, moving from a centrally planned economy towards a more market-based system. Both economic growth and reform have stalled in recent years, however, and Russia remains a predominantly statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy, transportation, banking, and defense-related sectors. The protection of property rights is still weak, and the state continues to interfere in the free operation of the private sector.

Russia is one of the world's leading producers of oil and natural gas, and is also a top exporter of metals such as steel and primary aluminum. Russia is heavily dependent on the movement of world commodity prices as reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during the 1998-2008 period as oil prices rose rapidly, has seen diminishing growth rates since then due to the exhaustion of Russia’s commodity-based growth model.

A combination of falling oil prices, international sanctions, and structural limitations pushed Russia into a deep recession in 2015, with GDP falling by close to 2.8%. The downturn continued through 2016, with GDP contracting another 0.2%, but was reversed in 2017 as world demand picked up. Government support for import substitution has increased recently in an effort to diversify the economy away from extractive industries.

North Korea, one of the world's most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of decades of mismanagement, underinvestment, shortages of spare parts, and poor maintenance. Corruption and resource misallocation, including show projects, large-scale military spending, and development of its ballistic missile and nuclear programs, severely draws off resources needed for investment and civilian consumption. Industrial and power outputs have stagnated for years at a fraction of pre-1990 levels. Frequent weather-related crop failures aggravated chronic food shortages caused by on-going systemic problems, including a lack of arable land, collective farming practices, poor soil quality, insufficient fertilization, and persistent shortages of tractors and fuel.

 

The mid 1990s through mid-2000s were marked by severe famine and widespread starvation. Significant food aid was provided by the international community through 2009. Since that time, food assistance has declined significantly. In the last few years, domestic corn and rice production has improved, although domestic production does not fully satisfy demand. A large portion of the population continues to suffer from prolonged malnutrition and poor living conditions. Since 2002, the government has allowed semi-private markets to begin selling a wider range of goods, allowing North Koreans to partially make up for diminished public distribution system rations. It also implemented changes in the management process of communal farms in an effort to boost agricultural output.

 

In December 2009, North Korea carried out a redenomination of its currency, capping the amount of North Korean won that could be exchanged for the new notes, and limiting the exchange to a one-week window. A concurrent crackdown on markets and foreign currency use yielded severe shortages and inflation, forcing Pyongyang to ease the restrictions by February 2010. In response to the sinking of the South Korean warship Cheonan and the shelling of Yeonpyeong Island in 2010, South Korea’s government cut off most aid, trade, and bilateral cooperation activities. In February 2016, South Korea ceased its remaining bilateral economic activity by closing the Kaesong Industrial Complex in response to North Korea’s fourth nuclear test a month earlier. This nuclear test and another in September 2016 resulted in two United Nations Security Council Resolutions that targeted North Korea’s foreign currency earnings, particularly coal and other mineral exports. Throughout 2017, North Korea’s continued nuclear and missile tests led to a tightening of UN sanctions, resulting in full sectoral bans on DPRK exports and drastically limited key imports. Over the last decade, China has been North Korea’s primary trading partner.

 

The North Korean Government continues to stress its goal of improving the overall standard of living, but has taken few steps to make that goal a reality for its populace. In 2016, the regime used two mass mobilizations — one totaling 70 days and another 200 days — to spur the population to increase production and complete construction projects quickly. The regime released a five-year economic development strategy in May 2016 that outlined plans for promoting growth across sectors. Firm political control remains the government’s overriding concern, which likely will inhibit formal changes to North Korea’s current economic system.

GDP (purchasing power parity)$3,968,180,000,000 (2019 est.)

$3,915,637,000,000 (2018 est.)

$3,818,780,000,000 (2017 est.)

note: data are in 2010 dollars
$40 billion (2015 est.)

$40 billion (2014 est.)

$40 billion (2013 est.)

note: data are in 2015 US dollars
North Korea does not publish reliable National Income Accounts data; the data shown are derived from purchasing power parity (PPP) GDP estimates that were made by Angus MADDISON in a study conducted for the OECD; his figure for 1999 was extrapolated to 2015 using estimated real growth rates for North Korea's GDP and an inflation factor based on the US GDP deflator; the results were rounded to the nearest $10 billion.
GDP - real growth rate1.34% (2019 est.)

2.54% (2018 est.)

1.83% (2017 est.)
-1.1% (2015 est.)

1% (2014 est.)

1.1% (2013 est.)
GDP - per capita (PPP)$27,044 (2019 est.)

$26,668 (2018 est.)

$26,006 (2017 est.)

note: data are in 2010 dollars
$1,700 (2015 est.)

$1,800 (2014 est.)

$1,800 (2013 est.)

note: data are in 2015 US dollars
GDP - composition by sectoragriculture: 4.7% (2017 est.)

industry: 32.4% (2017 est.)

services: 62.3% (2017 est.)
agriculture: 22.5% (2017 est.)

industry: 47.6% (2017 est.)

services: 29.9% (2017 est.)
Population below poverty line12.6% (2018 est.)NA
Household income or consumption by percentage sharelowest 10%: 2.3%

highest 10%: 32.2% (2012 est.)
lowest 10%: NA

highest 10%: NA
Inflation rate (consumer prices)4.4% (2019 est.)

2.8% (2018 est.)

3.7% (2017 est.)

NA

Labor force69.923 million (2020 est.)14 million (2014 est.)

note: estimates vary widely
Labor force - by occupationagriculture: 9.4%

industry: 27.6%

services: 63% (2016 est.)
agriculture: 37%

industry: 63% (2008 est.)
Unemployment rate4.6% (2019 est.)

4.8% (2018 est.)
25.6% (2013 est.)

25.5% (2012 est.)
Budgetrevenues: 258.6 billion (2017 est.)

expenditures: 281.4 billion (2017 est.)
revenues: 3.2 billion (2007 est.)

expenditures: 3.3 billion (2007 est.)
Industriescomplete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; defense industries (including radar, missile production, advanced electronic components), shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles, foodstuffs, handicraftsmilitary products; machine building, electric power, chemicals; mining (coal, iron ore, limestone, magnesite, graphite, copper, zinc, lead, and precious metals), metallurgy; textiles, food processing; tourism
Industrial production growth rate-1% (2017 est.)1% (2017 est.)
Agriculture - productswheat, sugar beet, milk, potatoes, barley, sunflower seed, maize, poultry, oats, soybeansrice, maize, vegetables, apples, potatoes, cabbages, fruit, sweet potatoes, beans, soybeans
Exports$551.128 billion (2019 est.)

$564.314 billion (2018 est.)

$534.657 billion (2017 est.)
$222 million (2018)

$4.582 billion (2017 est.)

$2.908 billion (2015 est.)
Exports - commoditiescrude petroleum, refined petroleum, natural gas, coal, wheat, iron (2019)watch components, fake hair, iron alloys, instructional models, tungsten (2019)
Exports - partnersChina 14%, Netherlands 10%, Belarus 5%, Germany 5% (2019)China 67%, Suriname 6% (2019)
Imports$366.919 billion (2019 est.)

$355.022 billion (2018 est.)

$345.926 billion (2017 est.)
$2.32 billion (2018 est.)

$3.86 billion (2016 est.)
Imports - commoditiescars and vehicle parts, packaged medicines, broadcasting equipment, aircraft, computers (2019)clothing and apparel, soybean oil, rice, wheat products, clocks/watches (2019)
Imports - partnersChina 20%, Germany 13%, Belarus 6% (2019)China 96% (2019)
Debt - external$479.844 billion (2019 est.)

$484.355 billion (2018 est.)
$5 billion (2013 est.)
Exchange ratesRussian rubles (RUB) per US dollar -

73.7569 (2020 est.)

63.66754 (2019 est.)

66.2 (2018 est.)

60.938 (2014 est.)

38.378 (2013 est.)
North Korean won (KPW) per US dollar (average market rate)

135 (2017 est.)

130 (2016 est.)

130 (2015 est.)

98.5 (2013 est.)

155.5 (2012 est.)
Fiscal yearcalendar yearcalendar year
GDP (official exchange rate)$1,702,361,000,000 (2019 est.)$28 billion (2013 est.)
Taxes and other revenues16.4% (of GDP) (2017 est.)11.4% (of GDP) (2007 est.)

note: excludes earnings from state-operated enterprises
Budget surplus (+) or deficit (-)-1.4% (of GDP) (2017 est.)-0.4% (of GDP) (2007 est.)
GDP - composition, by end usehousehold consumption: 52.4% (2017 est.)

government consumption: 18% (2017 est.)

investment in fixed capital: 21.6% (2017 est.)

investment in inventories: 2.3% (2017 est.)

exports of goods and services: 26.2% (2017 est.)

imports of goods and services: -20.6% (2017 est.)
household consumption: NA (2014 est.)

government consumption: NA (2014 est.)

investment in fixed capital: NA (2014 est.)

investment in inventories: NA (2014 est.)

exports of goods and services: 5.9% (2016 est.)

imports of goods and services: -11.1% (2016 est.)
Gross national saving27.6% of GDP (2019 est.)

30% of GDP (2018 est.)

25.7% of GDP (2017 est.)

NA

Source: CIA Factbook