N. Korea suffers trade deficit for two decades

By Kim Tae-gyu

Staff reporter

North Korea has suffered trade deficits for two decades without any change since 1990, and on a more negative note, the regime's deficits have grown over the past five years.

The Korea Trade-Investment Promotion Agency (KOTRA) said Monday that Pyongyang's external trade was $3.4 billion in 2009, down 10.5 percent from a year ago.

Its outbound shipments amounted to $1.1 billion, down 6 percent, while imports stood at $2.4 billion, down 12.5 percent, for a deficit of $1.3 billion.

"Our overseas branches across the world collected data from 78 nations to compile the trade volume of North Korea, which does not release official information on its trade," said KOTRA official Jun Woo-hyung, who conducted the survey.

"Ever since we started research in 1990, North Korea has racked up deficits every year for two decades in succession. The size jumped to $1 billion in 2005 and has yet to fall below that mark."

The accumulated deficits since 1990 reached $15.8 billion, which accounts for 56 percent of its 2009 gross domestic product of $28.2 billion, according to the Central Intelligence Agency (CIA) World Fact Book.

Of note is that North Korea's dependence on China has rocketed, as almost four-fifths of its 2009 offshore trade was with the world's most populous country, one of only a few allies of Pyongyang.

The Sino-North Korea trade ratio was just 42.8 percent in 2003 but continued to increase to 52.6 percent in 2005, 67.1 percent in 2007, 73 percent in 2008 and 78.5 percent last year.

North Korea exported a total of $790 million worth of merchandise to China in 2009 while importing $1.9 billion made-in-China products. Pyongyang mainly bought crude oil, machinery and electronic goods.

Germany came in second on the trade partner list to North Korea, followed by Russia, India and Singapore. Yet, the combined trade volume of the four countries was less than one tenth that of China.

Transactions with South Korea were excluded from the survey because the two are of the same ethnicity. Inter-Korean trade in 2009 was $1.7 billion, down 7.8 percent from 2008.

The state-run KOTRA projected that North Korea's hyper-reliance on China would go deeper this year as its contacts with other countries would shrink for several reasons including further potential sanctions on the Stalinist regime.

More importantly Seoul thinks of bringing Pyongyang to the United Nations Security Council due to the torpedo attack that sank the South Korean Navy frigate Cheonan on March 26.

A multinational investigation team, including experts from South Korea, the United States, Sweden, the United Kingdom and Australia, concluded late last week that the North was responsible for the Cheonan tragedy and the deaths of 46 sailors.

Other countries are also seemingly ready to slap sanctions on the North because the assault contravenes the armistice, or the ceasefire agreement, signed at the end of the 1950-53 Korean War.

"In our view, too much reliance on a single country is not good for North Korea. But it seems to have no other option but to resort more to China this year," Jun said.