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State Department: Execution of North Korea general not in doubt
Politics
How impoverished but nuclear-armed North Korea earns money
SEOUL, South Korea (AP) — The closure of a factory park in North Korea jointly run by both Koreas has cost the impoverished North a rare source of legitimate hard currency. Seoul says it shut the Kaesong complex in response to the North's recent long-range rocket launch to keep its impoverished neighbor from using the money factories provided to fund its nuclear and missile programs.
With that hit to Pyongyang's already shaky finances gone, at least for now, here's a look at the North's economy and the external sources of income it maintains despite a raft of heavy international sanctions over its nuclear and ballistic missiles program.
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PYONGYANG'S ECONOMY
Seoul and Washington want more stringent trade and financial sanctions to punish the North's nuclear and missile adventures, but some question whether sanctions will ever meaningfully influence one of the least trade-dependent economies on the planet.
And what of that economy? It is extremely difficult to read because it doesn't release official trade statistics and treasures its secrecy.
South Korea's central bank, however, provides some idea of what's happening, based on data it receives every year from other government agencies, related organizations and an investigation of research organizations.
The bank has been publishing estimates of North Korea's economy since 1991. In its latest report, it said it believes the North's economy grew by 1 percent in 2014 to 33.95 trillion South Korean won, or $28.5 billion, or about 2 percent of South Korea's economy.
The Bank of Korea said North Korea's combined imports and exports that year were about $9.9 billion, including $2.4 billion in trade with the South, which the Unification Ministry says was generated nearly entirely from the activities at Kaesong.
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TRADE WITH CHINA
And then there's China, Pyongyang's last major ally, its diplomatic protector and by far its largest trading partner.
North Korea's main exports to China include coal, minerals, clothing, textiles and foodstuffs, while its imports from China include petroleum, steel, machinery, cars and electronics, according to South Korea's government-funded Korea Trade-Investment Promotion Agency.
Beijing, however, is unlikely to support harsh punishment over the nuclear test and rocket launch for fear of provoking a government collapse in Pyongyang and a potential stream of refugees across its border.
Transactions with China accounted for more than 74 percent of North Korea's trade in 2014, and more than 90 percent when excluding trade related to the Kaesong park, according to Statistics Korea, Seoul's official statistics agency, which analyzed the central bank data and information from trade organizations.
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KAESONG INDUSTRIAL PARK
The South's Unification Ministry says the Kaesong park provided 616 billion won ($560 million) of cash to the North since its establishment in 2004, during an era of rapprochement between the rivals.
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