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North Korea's Economic Fog
Real estate news By Evan Ramstad
October 1, 2007
South Korean President Roh Moo-hyun wants to focus on economic cooperation when he meets North Korean leader Kim Jong Il this week. But that could be a challenge because no outsider really knows what is going on in the North's economy. The meeting in Pyongyang with Mr. Kim, expected to take place Wednesday, will be the second between leaders of the two Koreas. Mr. Roh plans to offer aid and capital projects to the North, his aides say, and about 25 South Korean business leaders, including the heads of Samsung Electronics Co. and Hyundai Motor Co., are joining Mr. Roh's 200-person entourage.
But some South Korean researchers and economists who follow North Korea closely want Mr. Roh to focus instead on pushing the North to engage in substantive economic research and disclosure, with outside help if necessary. That would help South Koreans understand the impact of their investments and lay the groundwork for North Korea to engage financially with the world, including joining the International Monetary Fund and World Bank. Though North Korea is known to be one of the most impoverished countries in the world, Mr. Kim conceals economic data, leaving researchers to make some extremely imprecise measurements. Analysts at South Korea's Unification Ministry, for instance, take rulers to satellite photos of corn fields to estimate crop output.
North Korea's economy is believed to be only a third the size it was 20 years ago. Statistics from trading partners suggest it is getting worse, with North Korea shipping fewer exports and taking in more imports. Market entrepreneurialism does appear to be taking root in some places, defectors and visitors say. "People are very busy surviving," says Dong Yong-seung, economist at Samsung Economic Research Institute, who visited North Korea in June. "The mechanism to make your own money exists for some."
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