Is the North Korean economy growing?
A while back I had a post based on Bank of Korea figures titled “Is the North Korean economy shrinking?” Now Hyundai Research Institute is arguing that it is growing, indeed that it grew at 4.7 percent last year. My rule of thumb is to never trust a datum about the North Korean economy that comes with a decimal point attached, so I tracked down the study. Turns out that the HRI researchers ran a panel cross-country regression of per capita income levels on infant mortality data, then plugged in the North Korean figures to derive a counterfactual projection. Since the UN only publishes the data at five year intervals, the HRI team used grain harvest data, which they say has a correlation with infant mortality of -0.69 to interpolate the missing data. As one can see from the chart below, derived from one of the tables in their report, this technique generates an oddly smooth per capita income series.
So, did the North Korean economy grow by 4.7 percent last year? I doubt it. But their guess is probably as good as any. What is really striking about this chart is that all of the sources have per capita income today lower than it was twenty years ago. Indeed, according to the HRI estimate, North Korean per capita income first reached the level it attained last year in 1974!
Comments
Well.. Something new has emerged from North Korea that is that Phoenix Commercial Ventures and Citadel Advantage Limited have joined together to form a new Banking System. Now there is not only the Central Bank but also the Daedong Credit Bank. The understanding is that Tor Rawden Kallstigen the Swedish Fashion designer has opened a new Jeans Factory in North Korea, to produce Jeans for the Swedish Market.
L&J Development Consultancy is also doing business there. Buisness has now risen in North Korea to at least 4.8% more than in 2010.
Kaesong, is now the business hub of North Korea, and if one opens up the Tumen River Cooperation this would not only benefit North Korea, China, and Russia as this a free zone.
There are many US pharmaceutical companies based in North Korea, most of its funding or businesses are from China and Russia, Brazil and Sweden.
North Korea is trying to open up to the world but unless you have the cash and NOT US DOLLARS nor a Credit Card that comes from the US you are more than welcome to do business in North Korea. North Korea Economy Watch tells you all th einformation, and are asking one to od business in North Korea.
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