Private sector overtakes the state as North Korea’s largest economic player under Kim – S.Korea | World news
SEOUL (Reuters) – The private sector has overtaken state-run agents to become North Korea’s largest economic player in the past decade, a sign of the market boom allowed by leader Kim Jong Un , the South Korean Unification Ministry said Thursday.
The ministry, which manages North Korea’s affairs, released a report on political, economic and social changes during Kim’s 10-year rule, based on data from South Korean and UN agencies as well as on interviews with defectors.
As the isolated country suffered from coronavirus lockdowns and sanctions for its weapons programs, private activity has grown from around 28% a decade ago to nearly 38% of the economy, the ministry said. in the report.
Government-led programs, meanwhile, declined to account for 29% of the economy from 37%, and about 9% came from entities that work in both the public and private sectors, up from 7%.
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The number of traders also quadrupled to a record high of around 1,368 in 2018, from 338 in 2011, before dropping sharply due to economic hardships and the pandemic.
“As commodification continues, the proportion of the private economy follows a long-term upward trend,” the ministry said. “People’s activities are turning into a dual economy, state and private.”
North Korea does not answer questions from foreign journalists, and its government and state media rarely provide insight into economic conditions.
Kim became a leader at the end of 2011, following the death of his father, Kim Jong Il.
The new ruler’s endorsement of markets previously abhorred by his father has helped improve the livelihoods of many North Koreans, with his gross domestic product (GDP) growing 3.9 percent in 2016, the fastest in 17 year.
But early progress was overshadowed by sanctions imposed on nuclear and long-range missile testing, a ministry official said, even as Kim pledged to build a self-sustaining economy after declaring the completion of the “state nuclear force” in 2017.
“After all, in order to achieve sustainable economic growth and dramatically improve people’s livelihoods, they must reorient their policies towards denuclearization and economic cooperation,” the official said.
As the pandemic and natural disasters compounded the pressure, North Korea’s GDP suffered its largest contraction in 23 years in 2020, while agricultural production hit its lowest level under Kim, at 4.4 millions. North Korea’s trade with its main ally, China, has plunged more than 90% from its peak in 2014.
This month, Kim warned of a “very giant struggle” next year and called in October to focus on improving people’s lives despite “gloomy” economic conditions.
North Korea has not confirmed any infection with COVID-19 but has closed its borders and severely restricted public transport and interstate travel.
(Reporting by Hyonhee Shin; Editing by Robert Birsel)
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