Why the North Korea Poverty Rate is a Self-Inflicted Wound


PYONGYANG — North Korea poverty rate is among the highest in the world. Being a hermit kingdom in the global economy is no longer a viable option, and such behavior only causes further harm to the country’s economic interests.

Due to its reclusive nature and its track record of publishing unreliable National Income Accounts data, the North Korea poverty rate can only be estimated. However, according to a 2017 report from the CIA’s World Fact Book, in 2015, the country’s estimated GDP was $40 billion.

The country’s economic growth rate is on the decline as well. In 2014, the GDP growth was an estimated 1 percent, and in 2015, it shrunk by 1.1 percent. With a labor force of 14 million people, the GDP per capita in 2015 was estimated to be $1,700. This ranks the country 213th out of 230 countries worldwide in terms of GDP per capita.

North Korea’s unemployment rate was estimated at 25.6 percent as of 2013 and has an industrial capital stock market that is nearly irreparable due to a number of years of investment shortages and a lack of raw materials. In the mid-1990s, the nation was struck with a famine that caused starvation nearly nationwide. It is estimated that one million people died as a result.

While this was in part due to systemic corruption, it also can be attributed to numerous weather-related crop failures, inadequate collective farming practices and poor soil quality, along with shortages of fuel, farming equipment, arable land and fertilizers. When the famine began, the U.S. provided substantial food aid to the nation up until 2009 when North Korea stated it was no longer wanted.

A 2015 study released by the United Nations’ Food and Agriculture Organization concluded that 84 percent of households have “borderline or poor food consumption.”

Additionally, out of a population of about 25.1 million people, 18.4 million live with no access to electricity. It is also estimated that about 15.2 percent of North Korean children under the age of five are underweight. In 2014, the adult obesity rate was 2.5 percent, while the average global rate was much higher at 13 percent.

The country also has one of the highest death rates in the world, with about 9.3 people per 1,000 people in the population dying annually, and a severe lack of medical practitioners and equipment. In 2011, there was an estimated 2.78 physicians per 1,000 people and in 2012, an estimated 13.2 hospital beds per 1,000 people.

North Korea Poverty Rate

The North Korea poverty rate actually appears to be a burden that they have placed on themselves. It is the result of a disproportionate amount of the GDP being spent on defense, a desire to maintain absolute political control, remaining almost totally isolated from the global economy and numerous reports that Kim Jong-Un and his predecessor, Kim Jong-il, spent large sums of money on luxury items for themselves.

According to a report by the Korea Institute of Defense Analyses, in 2009, the government spent $8.77 billion on its military. The North Korean government often makes attempts to understate the amount they spend on defense, and claimed it only spent $570 million. In 2009, their GDP was approximately $25 billion. Today, about one third of their GDP is spent on defense.

Another cause of the devastating the North Korea poverty rate is the structure of the government itself. The practice of not allowing individuals to start businesses and participate in a free-market style economy hurts individual income and the nation’s ability to achieve economic progress as a whole. This reflects of the idea that the country values security far more than individual freedom. In doing so, North Korea effectively proved that there must be a balance between security and freedom in order for any nation to prosper.

Perhaps the most damaging thing to the country’s economy is that it has burned bridges with nearly every nation in the world because of their history and the regime’s potential desire for violence. Currently, China is their sole trading partner. South Korea cut off all bilateral economic activity in February 2016 after they conducted their fourth nuclear test. In September 2016 the U.N. Security Council passed a resolution that impacts their ability to receive foreign currency.

Additionally, in February of 2014 the U.N. reported that spending on luxury items by the government was $645.8 million in 2012. Also, historical records show that Kim Jong-Un spent an average of $300 million annually on luxury goods. The imported luxury goods include but are not limited to: dozens of Mercedes-Benz automobiles, expensive liquor, pedigree pets, high-quality pianos, perfume and even a ski resort that has 68 miles of ski trails, a hotel and heliport.

Many speculate that this resort was built in efforts to rival the construction of winter athletic facilities in South Korea who is hosting the 2018 Winter Olympics.

Kim Jong-Un seems to understand that his country is in a perpetuating state of poverty. According to the Korean Central News Agency, in 2015, the leader stated that he “cannot sleep,” due to the poverty in the country, adding that his citizens “have never enjoyed an abundant life,” and went further to say that living conditions must improve.

Unfortunately, since making those remarks, the leader has done almost nothing to improve living conditions.

Hunter McFerrin
Photo: Flickr


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