The sudden withdrawal of the Japanese and the subsequent partition of the country created economic chaos. North Korean Economy After World War II and the Korean War South Korea’s central bank estimates the North’s GDP was US$1,250 per person in 2011 compared with US$23,400 in South Korea. The impoverished country suffers chronic food and power shortages and has not released economic data for decades. North Korea’s centrally planned economy was smaller in 2012 than it was in 1992. In 2002 the government instituted a series of limited economic reforms, including letting markets set prices of many goods and services and permitting private traders. The amount of resources devoted to the military, one of the world's largest, has been a burden on the economy as well. Development was impeded, however, by the rigid economic system, and the economy severely affected by a loss of trading partners after the collapse of East European Communism. With abundant mineral resources and hydropower, 70 percent of its national product is now derived from mining, manufacturing, and services about 30 percent still comes from agriculture. Much of the country's industry was centered around the Hamhung-Hungham industrial complex.Īccording to the Columbia Encyclopedia: North Korea has changed from a predominantly agricultural society (in 1946) to an industrial one. In the 1970s North Korea exported locomotives to the Soviet Union, synthetics to China, machine tools to Europe, farm machinery and chemical fertilizers to Africa and Latin America. With Soviet assistance, the North Korean economy outperformed the economies of both South Korea and China. In the 1960s, per capita income was higher in North Korea than South Korea. Rich in natural resources, the North Korean economy performed quite well during the 1950s and 60s. By 2002, South Korea had a GDP or $505 billion while North Korea’s was only $15 billion. In the 1950s, after the Korean War, the industrialized North Korea was richer than largely agricultural South Korea. North Koreans were once known as the travelers and traders of Korea.
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