# North Korea economy question. **URL:** \ **Category:** Factual Questions\ **Created:** [July 29, 2008, 5:20pm UTC](https://boards.straightdope.com/t/north-korea-economy-question/458108 "2008-07-29T17:20:09Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![An\_Gadai](https://avatars.discourse-cdn.com/v4/letter/a/d6d6ee/32.png) [@An\_Gadai](https://boards.straightdope.com/u/An_Gadai)\ **Post date:** [July 29, 2008, 5:20pm UTC](https://boards.straightdope.com/t/north-korea-economy-question/458108/1 "2008-07-29T17:20:09Z")
According to the wikipedia entry for North Korea: > **[North Korea](https://en.wikipedia.org/wiki/North_Korea)** > > North Korea,\[a\] officially the Democratic People's Republic of Korea (DPRK),\[b\] is a country in East Asia. It constitutes the northern half of the Korean Peninsula and borders China and Russia to the north at the Yalu (Amnok) and Tumen rivers, and South Korea to the south at the Korean Demilitarized Zone (DMZ).\[c\] The country's western border is formed by the Yellow Sea, while its eastern border is defined by the Sea of Japan. Pyongyang is the capital and largest city. > The Korean Peninsula w... [QUOTE=wikipedia] By 1960, North Korea was among the wealthiest countries in the world and the most industrialized country in Asia with a GDP per capita of $1,947 and more developed than today’s wealthiest countries such as Australia, Austria, Belgium, Denmark, Finland, France, Japan, Italy, Netherlands, Norway, South Korea, Switzerland and the United Kingdom. At the time, North Korea’s GDP per capita was four times larger than Japan, whose economic development was comparable with that of Tanzania, Tonga and Mozambique with a GDP per capita of $471. [/QUOTE] I have a list of questions. 1. Is the above true? 2. If true, how come NK’s economy was so strong during this period? 3. Hi, Opal! ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [July 29, 2008, 5:26pm UTC](https://boards.straightdope.com/t/north-korea-economy-question/458108/2 "2008-07-29T17:26:48Z")
You might want to read this: [http://countrystudies.us/north-korea/46.htm](http://countrystudies.us/north-korea/46.htm) In brief: 1. They got enormous amounts of aid from the Soviet Union and China. 2. > [@](#): > > Various factors explain the very high rate of economic development of the country in the 1950s and the general slowdown since the 1960s. During the reconstruction period after the Korean War, there were opportunities for extensive economic growth–attainable through the communist regime’s ability to marshall idle resources and labor and to impose a low rate of consumption. This general pattern of initially high growth resulting in a high rate of capital formation was mirrored in other Soviet-type economies. Toward the end of the 1950s, as reconstruction work was completed and idle capacity began to diminish, the economy had to shift from the extensive to the intensive stage, where the simple communist discipline of marshalling underutilized resources became less effective. In the new stage, inefficiency arising from emerging bottlenecks led to diminishing returns. Further growth would only be attained by increasing efficiency and technological progress. ---
**Author:** ![Tapioca\_Dextrin](https://avatars.discourse-cdn.com/v4/letter/t/3d9bf3/32.png) [@Tapioca\_Dextrin](https://boards.straightdope.com/u/Tapioca_Dextrin)\ **Post date:** [July 29, 2008, 8:51pm UTC](https://boards.straightdope.com/t/north-korea-economy-question/458108/3 "2008-07-29T20:51:50Z")
> [@](#): > > At the time, North Korea’s GDP per capita was four times larger than Japan, whose economic development was comparable with that of Tanzania, Tonga and Mozambique with a GDP per capita of $471. As Humpty Dumpty pointed out, you can make words mean whatever you want them to mean. According to the [site that Wiki cites](http://www.nationmaster.com/graph/eco_gdp_percap-economy-gdp-per-capita&date=1960) the GDP figures were as follows > [@](#): > > Guam: $47,451.70 per capita > Faroe Islands: $20,833.33 per capita > United States: $2,881.10 per capita GDP per capita seems to be a pretty silly number. ---
**Author:** ![Giles](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/giles/32/60_2.png) [@Giles](https://boards.straightdope.com/u/Giles)\ **Post date:** [July 29, 2008, 9:54pm UTC](https://boards.straightdope.com/t/north-korea-economy-question/458108/4 "2008-07-29T21:54:16Z")
[QUOTE=Tapioca Dextrin] GDP per capita seems to be a pretty silly number. [/QUOTE] It’s normally a pretty sensible number, but it can get out of whack in countries/territories with a small population and something out of the ordinary with the economy. However, the figures for the latest available year, [2005](http://www.nationmaster.com/graph/eco_gdp_percap-economy-gdp-per-capita&date=2005), look more reasonable, with the top country being Luxemburg at about $80K per capita being more comparable with the US at about $42K per capita, and ---
**Author:** ![FoieGrasIsEvil](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foiegrasisevil/32/16638_2.png) [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)\ **Post date:** [July 30, 2008, 4:17am UTC](https://boards.straightdope.com/t/north-korea-economy-question/458108/5 "2008-07-30T04:17:37Z")
I suppose that Kim-Jong-Il’s massive and economically unsupportable military buildup is what is causing current levels of famine. It isn’t like the farmers have a choice of whom they are feeding or whom they are selling their produce (rice) to. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [July 31, 2008, 6:27am UTC](https://boards.straightdope.com/t/north-korea-economy-question/458108/6 "2008-07-31T06:27:47Z")
According to Angus Maddison’s The World Economy, A Millennial Perspective, North Korea had a per capita GDP of $1105 in 1960 (1990 international Geary-Khamis dollars). Let’s do some comparisons with 1960 GDP per capita: Argentina: $5559 Brazil: 2335 Japan: 3988 Australia: 8865 France: 7543 Canada: 8947 US: 11,328 The Wikipedia entry as reported in the OP is not remotely accurate. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [July 31, 2008, 6:34am UTC](https://boards.straightdope.com/t/north-korea-economy-question/458108/7 "2008-07-31T06:34:22Z")
So what gives? I suspect that the North Korean GDP is valued at the official exchange rate at the time, which was presumably over-valued and subject to currency controls. That is, a North Korean wanting to trade his Quatloos for dollars or yen wouldn’t have much luck. Within centrally planned economies the ability to turn locally earned money into foreign goods is limited: only the elite have access to certain well-stocked stores. Those few foreigner tourists wanting to buy North Korean currency in the day though would pay through the nose, unless they had access to the black market.