In 2022, South Korea's nominal gross domestic product (GDP) amounted to around 2,080 trillion South Korean won, while that of North Korea was approximately 36.2 trillion South Korean won. With this, South Korea’s nominal GDP was around 57 times greater than that of North Korea. South Korea's nominal GDP has increased continuously over the past decade. North Korea’s increased as well, but North Korea's GDP growth has been comparatively minimal.
Economic growth in South and North Korea
After the division of Korea and the subsequent Korean War, which ended with an armistice in 1953, North Korea for the time being had the edge in economic and industrial power. The heavy industries and power generation sector were located in what would become North Korea. Yet it was South Korea that succeeded in developing its industries and economies to become one of the biggest economies in the world. With international sanctions against North Korea making exports more difficult, the gap between South and North Korean GDP has widened steadily in the past decades.
Kaeseong Industrial Complex
The Kaeseong Industrial Complex was established in 2000 as part of South Korea’s cross-border collaboration efforts to soften North Korea’s hostile and aggressive attitude towards South Korea, and possibly open up deeper relations between the two Koreas. South Korea would provide the capital and businesses that set up in the complex would get cheap products of good quality, while North Korea and the locals would get work and pay. Unfortunately, the complex was also affected by tensions between the two Koreas and shut down in 2016, and has not been reopened since. As of 2015, the complex’s production value amounted to approximately 563.3 million U.S. dollars.
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The gross domestic product (GDP) measures the total value of goods and services produced within a country's borders in a given period. In 2022, South Korea's nominal GDP was reported at approximately 2,080 trillion South Korean won, whereas North Korea's was around 36.2 trillion South Korean won. This staggering 57-fold difference showcases the vast economic gulf between the two nations.
South Korea's economic growth trajectory over the past decade has been impressive, marked by continuous expansion. This growth is largely attributed to the nation's robust industrialization, technological advancements, and export-oriented economy.
North Korea, on the other hand, experienced limited GDP growth despite an increase. The minimal growth is linked to international sanctions that restricted its exports, impeding economic development.
The Korean War and the subsequent division of Korea in 1953 significantly influenced the economic landscapes of both countries. Initially, North Korea held an advantage in industrial and economic power due to its heavy industries and power generation sector. However, South Korea's focused efforts on industrial development propelled it to become a prominent global economy.
The Kaeseong Industrial Complex, initiated in 2000, aimed to foster cross-border collaboration between South and North Korea. This initiative sought to mitigate North Korea's hostility by providing employment opportunities to locals while enabling South Korean businesses to benefit from cost-effective production. Unfortunately, escalating tensions led to the closure of the complex in 2016, stalling potential economic progress between the two nations.
The complex had shown promise, with its production value reaching approximately 563.3 million U.S. dollars by 2015. However, its closure highlighted the fragility of inter-Korean relations and the challenges in sustaining economic cooperation amid political tensions.
These concepts underscore the divergent economic paths taken by South and North Korea, shaped by historical events, political dynamics, and efforts towards inter-Korean economic collaboration.
