June 26,
2008: South Korean banking officials
estimate that the North Korean economy shrank for the second year in a row
(-2.3 percent last year, and -1.1 percent in 2006). North Korean GDP is
estimated as $26.7 billion in 2007, creating a per capita income of $1,152. South
Korea has a 2007 GDP of $971 billion (5 percent growth over 2006) and a per
capita income at $20,045. The enormous economic gap between the two Koreas is
the result of over half a century of communist economic mismanagement in the
north. That has led to an increasingly corrupt police state that is at war with
itself. Government officials fight over access to wealth, or to suppress
corrupt behavior. The "purists" up north are a minority, but they have a license
to kill, and regularly catch, prosecute and execute corrupt government
officials. Execution is more often the punishment, because the upholders of communist
purity up north are finding that they are catching more and more corrupt
officials that have been caught and imprisoned before. These guys often manage
to talk, or bribe, their way out of jail, and get back into the game. What
fuels all this is the skewed distribution of income in North Korea. A few
percent of the population gets most of the cash coming in. A lot of that is
from criminal enterprises (exporting heroin, food aid and counterfeit U.S. currency)
or somewhat legitimate ones (weapons exports). Inside North Korea, drug sales
to the elite has increased, along with foreign porn and consumer goods.
Corruption
in the army has become so widespread that the government authorized the civilian
police (the People's Safety Agency) to investigate cases of corrupt military
personnel. Previously, the military police handled such investigations, but the
government believes the military police have become corrupted, and can no
longer be trusted to find and punish soldiers involved in criminal acts
(stealing, or aiding smugglers to get across the border). All this reflects
poorly on the National Security Agency (secret police), who are also seen as
corrupted. Meanwhile, the police must still obtain Communist Party permission
before investigating senior members of the Party.
The few
state run companies in the south have also demonstrated poor performance, and
there is corruption among government officials as well. But the vast majority
of the southern economy is in private hands, and the democratic political
system there provides a way to get rid of corrupt officials. In the north, the Communist
Party clings to power via brute force. During the 20th century, the
one thing the communists created that worked was the modern police state. Thus
the North Koreans can go on for years more, despite the fact that the
population is starving and economic activity continues to shrivel. It's all
relative, though, as the southerners see their prosperity in danger from rising
international food and fuel (oil) prices. This has caused public unrest in the
south that would result in mass executions in the north. Because of these
problems, South Korea expects economic growth to slow to four percent for this
year. North Korea's economy is expected to continue shrinking.
The food
situation in the north would be a lot worse were it not for black market in
farm products that has developed since the famine of the 1990s. Back then, North
Korean farmers produced about 10 tons of grain per hectare (2.45 acres). Now
that's down to three tons, at least officially. Unofficially, it's closer to 10
tons because the farmers have found ways to produce most of their food "off the
books" and sell it on the black market. Local government officials have been
cut in on this, creating pockets of prosperity in the countryside. The less
productive agricultural areas, especially the ones hit by floods and other bad
weather, are really suffering. But for those who can, they do very well. Those
who cannot come up with some kind of scam or hustle, are starving to death. It's
all very Darwinian up north.
June 16,
2008: Pakistani nuclear weapons scientist
Abdul Qadeer Khan, who has been under house arrest since 2004 for selling
nuclear secrets, is now accused of selling detailed plans for a nuclear weapon
to North Korea and Iran. No proof has been presented, only the similarities in
the first nuclear weapons tested by Pakistan (in 1999) and North Korea (in 2006).
Both of these bombs were only partially successful (they "fizzled" instead of
exploding).
