Kim Jong Il’s economic legacy, in one chart

at 10:00 AM ET, 12/19/2011

One easy way to evaluate the legacies of North Korean dictators Kim Il Sung and Kim Jong Il is to compare their country’s economic performance with South Korea’s over the past four decades. The difference is stunning.

Back in 1970, the two countries were roughly comparable — in fact, AEI’s Nicholas Eberstadt argues that, at the time of Mao Zedong’s death, North Korea’s workers were more productive and better educated than China’s. But, as you can see from the graph below, North and South Korea’s economies massively diverged around 1976, as North Korea’s rigid central-planning economy failed to keep up:


Data from the Historical Statistics for the World Economy.

During the early 1970s, North Korea’s economy stagnated, with GDP per capita flatlining until Kim Il Sung’s death. Then, in 1994, after Kim Jong Il took over, the economy started shrinking noticeably, per capita incomes fell, and the country became dependent on emergency U.N. food aid to stave off famines that had already killed as many as 3 million people. North Korea became, as Eberstadt puts it, “the world’s first and only industrialized economy to lose the capacity to feed itself.” (That said, there’s evidence that North Korea was growing weakly in the last few years of Kim Jong Il’s rule).

At the moment, North Korea’s per capita income is less than 5 percent of the South’s. As the Atlantic Council’s Peter Beck puts it, “Each year the dollar value of South Korea’s GDP expansion equals the entire North Korean economy.”

That’s one reason why reuniting two countries would be an unimaginably wrenching task. Remember, West Germany had to spend about $1.9 trillion to assimilate East Germany after the fall of the Berlin Wall. And that was an objectively easier situation (East Germany’s per capita income, for instance, was one-third that of West Germany’s, not a measly 5 percent). Beck estimates that bringing North Korea up to just 80 percent of South Korean standards could cost $2 trillion to $5 trillion over 30 years — to put that in perspective, South Korea’s entire economy comes to about $1 trillion.

 
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