Korea: November 5, 2003


  Economists are finding out more about the extent of damage that a half century of communist rule have done to the North Korean economy. The conclusion is that collapse is very close without continued massive food and fuel aid to the north. The factories and infrastructure are rotting, as maintenance has dried up over the last few years. The electricity system is falling apart and most parts of the country do not have 24/7 electricity. The north has tried to implement some reforms, but these have only legalized the black market and made things worse.

Defectors believe it is possible that there may be a spontaneous uprising, quite possibly from the lower ranks of the army. The last few years worth of conscripts grew up hungry, and are not happy with the way things are. Moreover, more news of the outside world is reaching to north, adding to the unrest.  Since 1995, some eight million tons of food has been donated to North Korea, but a quarter of the population is still hungry and over a million people have died.

Economists, and credit rating agencies, are also worried about the impact of collapse in the north on the south. South Korea would have to pay most of the bill for rehabilitating the north, and saving its population from starvation. The cost is now estimated at some three times South Koreas current GDP, which would come to a total of over two trillion dollars.


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