linguistic:paraphrasing
Economy

North Korea has maintained one of the most closed and centralized economies in the world since the 1940s. For several decades, it followed the Soviet pattern of five-year plans with the ultimate goal of achieving self-sufficiency. Extensive Soviet and Chinese support allowed North Korea to rapidly recover from the Korean War and register very high growth rates. Systematic inefficiency began to arise around 1960, when the economy shifted from the extensive to the intensive development stage. The shortage of skilled labor, energy, arable land and transportation significantly impeded long-term growth and resulted in consistent failure to meet planning objectives. The major slowdown of the economy contrasted with South Korea, which surpassed the North in terms of absolute GDP and per capita income by the 1980s. North Korea declared the last seven-year plan unsuccessful in December 1993 and thereafter stopped announcing plans.

The loss of Eastern Bloc trading partners and a series of natural disasters throughout the 1990s caused severe hardships, including widespread famine. By 2000, the situation improved owing to a massive international food assistance effort, but the economy continues to suffer from food shortages, dilapidated infrastructure and a critically low energy supply. In an attempt to recover from the collapse, the government began structural reforms in 1998 that formally legalized private ownership of assets and decentralized control over production. A second round of reforms in 2002 led to an expansion of market activities, partial monetization, flexible prices and salaries, and the introduction of incentives and accountability techniques. Despite these changes, North Korea remains a command economy where the state owns almost all means of production and development priorities are defined by the government.

North Korea has the structural profile of a relatively industrialized country where nearly half of the gross domestic product is generated by industry and human development is at medium levels. Purchasing power parity (PPP) GDP is estimated at $40 billion, with a very low per capita value of $1,800. In 2012, Gross national income per capita was $1,523, compared to $28,430 in South Korea. The North Korean won is the national currency, issued by the Central Bank of the Democratic People's Republic of Korea. The economy has been developing dramatically in recent years despite sanctions. The Sejong Institute describes these changes as "astonishing".

The economy is heavily nationalized. Food and housing are extensively subsidized by the state; education and healthcare are free; and the payment of taxes was officially abolished in 1974. A variety of goods are available in department stores and supermarkets in Pyongyang, though most of the population relies on small-scale jangmadang markets. In 2009, the government attempted to stem the expanding free market by banning jangmadang and the use of foreign currency, heavily devaluing the won and restricting the convertibility of savings in the old currency, but the resulting inflation spike and rare public protests caused a reversal of these policies. Private trade is dominated by women because most men are required to be present at their workplace, even though many state-owned enterprises are non-operational.

Industry and services employ 65% of North Korea's 12.6 million labor force. Major industries include machine building, military equipment, chemicals, mining, metallurgy, textiles, food processing and tourism. Iron ore and coal production are among the few sectors where North Korea performs significantly better than its southern neighbor —it produces about 10 times more of each resource. Using ex-Romanian drilling rigs, several oil exploration companies have confirmed significant oil reserves in the North Korean shelf of the Sea of Japan, and in areas south of Pyongyang. The agricultural sector was shattered by the natural disasters of the 1990s. Its 3,500 cooperatives and state farms were moderately successful until the mid-1990s but now experience chronic fertilizer and equipment shortages. Rice, corn, soybeans and potatoes are some of the primary crops. A significant contribution to the food supply comes from commercial fishing and aquaculture. Smaller specialized farms, managed by the state, also produce high-value crops, including ginseng, honey, matsutake and herbs for traditional Korean and Chinese medicine. Tourism has been a growing sector for the past decade. North Korea has been aiming to increase the number of foreign visitors through projects like the Masikryong Ski Resort. On 22 January 2020, North Korea closed its borders to foreign tourists in response to the threat of the COVID-19 pandemic in North Korea.

Foreign trade surpassed pre-crisis levels in 2005 and continues to expand. North Korea has a number of special economic zones (SEZs) and Special Administrative Regions where foreign companies can operate with tax and tariff incentives while North Korean establishments gain access to improved technology. Initially four such zones existed, but they yielded little overall success. The SEZ system was overhauled in 2013 when 14 new zones were opened and the Rason Special Economic Zone was reformed as a joint Chinese-North Korean project. The Kaesong Industrial Region is a special economic zone where more than 100 South Korean companies employ some 52,000 North Korean workers. As of August 2017, China is the biggest trading partner of North Korea outside inter-Korean trade, accounting for more than 84% of the total external trade ($5.3 billion) followed by India at 3.3% share ($205 million). In 2014, Russia wrote off 90% of North Korea's debt and the two countries agreed to conduct all transactions in rubles. Overall, external trade in 2013 reached a total of $7.3 billion (the highest amount since 1990), while inter-Korean trade dropped to an eight-year low of $1.1 billion.