North Korea’s Current Situation and Economy
Due to my minor in the Korean Language Department, I had the opportunity to take a course called “North Korea Studies” in the second semester of my sophomore year. The course was taught by Professor Chu Li-hsi from the Department of Korean Language. I must say, I consider myself extremely fortunate to have finally secured a spot in his class this semester.
The class was scheduled from 6 PM to 9 PM, and I initially thought that such a time slot would result in a smaller number of students. However, to my surprise, the classroom was packed, with even some graduate students attending to audit our undergraduate class. It’s evident that any course taught by Professor Chu is highly sought-after and difficult to enroll in.
In March, Professor Chu invited Fukuda Keisuke, a journalist from Toyo Keizai Inc. in Japan who is also an expert on the Korean Peninsula and visits North Korea almost every year to gather first-hand information. Fukuda personally came to Taipei to give a lecture to our group of students. Prior to the lecture, it was clear that Professor Chu and Fukuda had a close relationship as they engaged in friendly discussions.
I had originally thought that Fukuda would deliver his lecture in Japanese and then have Professor Chu translate it into Chinese. However, to my surprise, Fukuda spoke directly in fluent Korean during his speech. It truly amazed me, and he truly lived up to his reputation as a “Korean Peninsula expert.” This kind of behavior has inspired me to pursue further learning and become a better journalist.
▍How do North Korea’s basic national power and economic strength compare to other countries?
Regarding Fukuda Keisuke’s lecture, it can be divided into two parts: North Korea’s nuclear weapons attack and its economy and society.
First, let’s talk about the missile launches by North Korea in recent years. From 2016 to the present, there were a number of missile launches in 2016, 2017, and 2019. However, in 2018, there were no missile launches. According to Fukuda Keisuke’s explanation, this was due to the easing of relations between North and South Korea during the 2018 PyeongChang Winter Olympics held in South Korea. However, in 2019, the breakdown of the second summit between North Korea and the United States, held in Vietnam (Hanoi Summit), led to a sharp increase in North Korea’s missile launches. From 2020 to 2021, when Moon Jae-in was in power in South Korea, the number of missile launches decreased due to factional relations. However, in 2021, with the change in the US and South Korean administrations, as the conservative party’s Yun Seok-yeol took office in South Korea and Biden assumed the presidency in the United States, both countries adopted a tough stance towards North Korea, resulting in tense relations.
From this, it can be understood that when the United States conducts military exercises, North Korea responds by launching missiles. The reasons behind North Korea’s missile launches can be broadly categorized into two types: first, North Korea conducts ballistic missile tests as nuclear tests and sees them as a means of self-defense against powerful nations. Second, North Korea uses these launches to test the accuracy and precision of its missiles and as a form of exercise. By conducting missile tests, North Korea also puts pressure on the United States, South Korea, and Japan (as missiles may fall into Japan’s economic waters). Some experts suggest that the reason for North Korea’s numerous missile launches in recent years is to deplete its missile inventory and avoid having outdated or expired missiles. North Korea has consistently maintained a “strong against strong” attitude towards external entities and does not wish to be perceived as weak, hence the continuous display of its military power through missile launches.
Based on the frequency of missile launches, such frequent testing undoubtedly results in financial losses for the national treasury. So, how much does it actually cost to launch an intercontinental ballistic missile?
According to the information provided by Fukuda Keisuke, it is estimated to be around 400 to 650 million US dollars, and this amount does not include the cost of personnel expenses. North Korea generally does not publish or disclose its economic budget. However, it is worth noting that this year they publicly announced that an initial 15.9% of the budget is allocated to defense, indicating the significance they place on defense. Considering the astonishing cost of missile launches, it is challenging for North Korea to afford such expenses from an economic development perspective.
However, the key factor lies in the cost aspect. Since missile materials are potentially imported from China and Russia, the cost of materials and components may not be high. Additionally, due to the brotherly relationship between North Korea and China/Russia, these countries may offer equipment at better prices.
In terms of North Korea’s income, a significant portion currently comes from foreign currency earned by overseas laborers. There are also suggestions that cyberattacks are employed to steal passwords from foreign banks and businesses, leading to illicit withdrawals. Furthermore, in 2022, it was alleged that North Korea intruded into banks, resulting in the theft of $20 billion.
Comparing North Korea to Taiwan and South Korea in terms of population, per capita income, trade volume, and economic growth rate: North Korea’s population is similar to Taiwan’s, approximately half the population of South Korea. However, there is a significant disparity in per capita income, with North Korea’s per capita income being roughly 30 times lower than that of Taiwan and South Korea.
The economic sanctions imposed by the United States in 2016 and 2017 had a substantial impact on North Korea’s economy. After facing severe economic downturns in 2017 and 2018 following the United Nations economic sanctions resolution, North Korea pursued a self-reliant economic policy. The economy started to recover in 2019 but faced setbacks in 2020 due to the COVID-19 pandemic, leading to border closures and a decline in the economic growth rate. In 2021, economic growth will improve again due to increased trade with China.
However, Fukuda cautioned that the data released by the South Korean government should be viewed with caution, as different political parties in South Korea may present different data based on their relationship with North Korea (e.g., data may appear more favorable when progressive parties have better relations with North Korea). Therefore, when analyzing different data and reports on North Korea, it is important to conduct a comprehensive analysis of the relevant information.
