North Korea’s Income Level On the Upswing Despite US Sanctions

Kim Jong-Un
Kim Jun-un

North Korean Supreme Leader Kim Jong-Un/CC

The income level of North Koreans increased in 2016 at the fastest pace in five years, the South Korean Bureau of Statistics announced, but the standard of living of South Koreans remains 20 times higher.

North Korea’s per capita income last year stood at 1.46 million won (1.4 dollars), up 5 percent, Statistics Korea said Friday.

This is the strongest growth since 2011, when per capita income rose 7%, according to the agency.

This performance comes despite the strengthening of the sanctions of the international community put in place to force Pyongyang to give up its prohibited nuclear and ballistic programs.

North Korea is one of the most secret countries in the world. The regime does not publish any official economic statistics, not even growth figures, so the available data are actually estimates made by researchers.

By comparison, the per capita income of South Koreans is 31.98 million won, or 22 times more.

The gap between North and South is illustrated by other figures published by Statistics Korea, such as South Korea’s electricity generation, which in 2016 was 540.4 billion kilowatts, or 23 times more than that of the North (23.9 billion).

The rate of subscriptions to mobile phone contracts was 14.26 per 100 people in the North, against 122.65 in the South, or more than one per person.

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The Bank of Korea (BOK) estimated in July that the North Korean GDP grew by 3.9% last year, the highest growth rate since 1999 when it was estimated at 3.1%. South Korea’s growth in 2016 was 2.8%.

In particular, North Korea’s GDP has grown due to increasing tolerance for private initiatives and the proliferation of small-scale entrepreneurs who trade food or goods arriving from China.

The relative “liberalization” of the economy was imposed because of the catastrophic deficiencies of the regime during the famine of the late 1990s.

Experts estimate that this burgeoning private sector could weigh 25 to 50 percent of the North’s GDP.

“Markets are one of the pillars of growth in North Korea, where more and more people rely on these markets for their income, rather than the poorly functioning public rationing system,” said Hong Min Korean Institute of National Unification.

Statistics Korea estimated in 2016 the population of the North at 24.9 million, against 51.3 million in the South.

Eid Lee

Eid is a freelance journalist from California. He covers different topics for The Talking Democrat but focuses mostly on technology and science.