"North Korea's Export Sophistication Index Stagnates... Economic Conditions Expected to Worsen Further"

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[Asia Economy Reporter Jang Sehee] An analysis has emerged that the qualitative structure of North Korea's exports has stagnated over the past 20 years, and its relative economic level is expected to deteriorate further.

Jeong Yeonha, a senior researcher at the Korea Development Institute (KDI), revealed this in the KDI North Korean Economic Review published on the 29th, titled "Qualitative Deterioration of North Korea's Export Structure from an International Comparative Perspective."

Researcher Jeong stated, "The stagnation in North Korea's export upgrading trend indicates that the North Korean economy has not secured long-term growth momentum," adding, "If the current situation continues, the relative level of North Korea's economy will worsen further."

The export upgrading index is an indicator that indirectly reflects the technological level or industrial productivity of manufacturing industries producing traded goods.

Compared to other countries, it is significantly low. Due to the continuous export upgrading of China and Vietnam, which successfully transitioned their systems, North Korea's export upgrading index in 2017 was only about 60% of China's and 70% of Vietnam's levels.

Researcher Jeong explained, "North Korea's export upgrading index is about half that of advanced countries but maintains a higher value compared to three developing countries: Bhutan, Pakistan, and Nepal."

However, he emphasized, "While both advanced and underdeveloped countries have achieved qualitative improvements in their export composition over the past 20 years, the qualitative composition of North Korea's exports still remains at the level of the Arduous March period."

Researcher Jeong also added, "The realistic strategy North Korea should adopt is to identify and produce labor-intensive goods in which the North Korean economy can have a comparative advantage."

This content was produced with the assistance of AI translation services.