North Korea’s social capital up 24% but factories in poor condition, study finds

The proportion of North Korea’s capital stock devoted to plant assets has remained low, indicating that infrastructure is not being updated or upgraded, according to the Bank of South Korea. File photo by KCNA/UPI | License picture

November 9 (UPI) — North Korea’s capital stock has increased by 24% over the past 30 years, but most capital increases have not impacted the regime’s manufacturing sector.

The Bank of Korea’s North Korean research division said on Monday that after the “collapse of socialism in the 1990s”, North Korea’s capital stock had declined significantly, but had recovered from the 1990s. 2000, Hankook Ilbo reported.

The BOK report, released jointly with Professor Hak Kil-pyo of Seoul National University, showed that in 2018, North Korea’s capital stock had increased by 24% since 1989.

In 2018, the most recent year for which data is available, equipment or facilities accounted for only 8% of the country’s total capital stock.

This number could be an indicator that North Korea has yet to update its aging power grids and dilapidated factories. By comparison, development-stage South Korean facility assets averaged 32% of total capital stock from the 1970s to the 1990s, according to Newsis.

The increase in the stock of construction assets in North Korea since 1989 is the main driver of the overall increase, occupying a larger share of the total capital stock. In 1989, the ratio of construction assets to plant assets was 8 to 2.

After the 2000s, this ratio increased to 9 to 1. According to researchers Cho Tae-hyoung and Kim Min-jung, North Korea’s fixed manufacturing assets may never have recovered since the Great Famine of the 90s.

According to the research, the heavy sanctions imposed on Kim Jong Un’s regime also played a role in hampering North Korean development. After recovering economic productivity in the 2000s, the North Korean economy may have contracted after 2017. International sanctions passed in August of the same year banned all North Korean exports of coal, iron , lead and seafood, and imposed new restrictions on the Foreign Trade Bank of North Korea. .

Sallie R. Loera