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Private Sector Becomes Largest Chunk of North Korean Economy

Number of merchants soared fourfold to hit an all-time high before sharply dropping amid economic hardships and the pandemic

north korea satellites
While inspecting North Korea's National Aerospace Development Administration, Kim Jong Un said "a lot" of military reconnaissance satellites would be put into sun-synchronous polar orbit in the period of a five-year plan announced last year, state news agency KCNA reported. Photo: Reuters.


Privately run business has overtaken state enterprises to become North Korea’s biggest economic actor over the past decade, a sign of booming markets allowed by leader Kim Jong Un, South Korea’s unification ministry said on Thursday.

The ministry, which handles North Korea 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 interviews with defectors.

While the isolated country suffered from coronavirus lockdowns and sanctions over its weapons programmes, private activity has grown from about 28% a decade ago to make up nearly 38% of the economy, the ministry said in the report.

Government-led programmes, meanwhile, have shrunk to make up 29% of the economy from 37%, and about 9% was from entities that work in both state and private sectors, up from 7%.

Merchants Proliferate Before Hardships

The number of merchants has also soared some fourfold to hit an all-time high at about 1,368 in 2018, from 338 in 2011, before sharply dropping amid economic hardships and the pandemic.

“As marketisation continues, the proportion of private economy is on a long-term upward trend,” the ministry said. “People’s activities are shaping into a dual way, state and private economy.”


  • Reuters, with George Russell




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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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