Thursday, March 8, 2012


from Marcus Noland who, in "The black hole of North Korea," reveals that what we think we know about the DPRK economy is most likely based on less than solid foundations. A couple of interesting snippets:
The most widely cited source on North Korean trade, the South Korean government agency KOTRA, carefully screens the mirror data for such obvious anomalies. But KOTRA excludes the North's trade with South Korea on the constitutional grounds that inter-Korean trade is domestic. Because of budget cuts, or a desire to downplay North Korea's Middle East connections, KOTRA also ignores trade with many Middle Eastern countries like Algeria and Saudi Arabia, both of which report trade with North Korea to the U.N. statistical agencies. As a result, KOTRA greatly exaggerates the prominence of the trade partners that it does record, with important geopolitical implications. The New York Times and the Washington Post, for example, have both reported that China accounts for about 80 percent of North Korea's trade. The actual figure is roughly half as much, which means North Korea is a lot less economically dependent on China than those figures imply.

Sadly, we don't even know how many North Koreans there are, how many serve in the armed forces, how many died in the famine, or how many have fled their country. For some purposes this is fine -- we can count their tanks even if we don't know how they pay for them. But for others -- how much aid should we provide, are sanctions likely to work, and ultimately, is time on our side or theirs -- we would be wise to ask the questions "what do we know" and "how do we know it" when formulating policy on North Korea.
The whole thing is worth a read.

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