Analyzing North Korea's Economy Using Satellite Nighttime Light and Maritime Traffic Data

June 30, KDI North Korea Economic Review June Issue Published

[Image source=Yonhap News]

There is an increasing attempt to analyze the North Korean economy using newly discovered non-traditional data. Research actively utilizing satellite nighttime light data to assess the North Korean economy or analyzing the actual situation in North Korea through maritime shipping and vessel traffic is underway.

According to the June issue of the ‘KDI North Korean Economy Review’ published by the Korea Development Institute (KDI) on the 30th, recent attempts to analyze the North Korean economy are increasing to overcome the limitations of quantitative statistics and analyze the economic situation through new data.

The North Korean economic estimates primarily used from the Bank of Korea have lacked information on North Korea’s volume indicator methods, and surveys or in-depth interviews with defectors have raised questions about representativeness, suggesting that they may differ from the overall picture of North Korea. Furthermore, trade data, which has been most frequently used to infer the North Korean economy, has also faced limitations in securing the same information due to strengthened sanctions against North Korea and the pandemic phase.

Accordingly, in academia, a research method that identifies North Korea’s economic activity through ‘nighttime light intensity’ detected by satellites is newly emerging. Nighttime light data has been used in the field of development economics for research on underdeveloped countries where statistics on economic performance do not exist. Based on the inference that the brighter the light, the more developed the economy, it is used as a proxy indicator of economic performance in countries lacking sufficient statistics.

Daul Kim, a senior researcher at the Korea Institute for International Economic Policy, derived per capita GDP trends using nighttime light datasets jointly operated by NASA (National Aeronautics and Space Administration). After estimating the relationship between per capita GDP and nighttime light in other countries, the actual physical indicator figures of North Korea were substituted into the estimation formula to derive per capita GDP. The study results showed that the per capita GDP trend estimated by nighttime light exhibited a clear growth trend since the mid-2000s. Evaluating the North Korean economy after the 2000s through nighttime light can be understood as showing faster growth compared to the Bank of Korea’s estimates.

In the study ‘North Korean Economy Seen through Shipping and Vessel Data’ by Inju Yoon, a research fellow at the Korea Maritime Institute, data on North Korea’s shipping and vessels were collected and utilized. Specifically, as of January 30, the traffic volume was examined by multiplying the capacity and frequency of vessels calling at North Korean ports. The study confirmed that the traffic volume of vessels calling at North Korea was proportional to external exchanges. During periods when international humanitarian aid to North Korea was concentrated, traffic volume at West Coast ports noticeably increased. During periods of expanded Western exchanges, traffic volume among East Coast ports accounted for a relatively high proportion.

Wonjin Lee, an environmental researcher at the Climate and Atmospheric Research Department of the National Institute of Environmental Research under the Ministry of Environment, in the study ‘Possibility of Analyzing the North Korean Economy Using Environmental Satellite Data: Correlation Analysis between Satellite-Observed Nitrogen Dioxide Concentration and North Korean GDP,’ analyzed whether air pollutant data could be used as an economic indicator for North Korea. Among air pollutants, nitrogen dioxide is mainly emitted from vehicles, factories, and power plants, so it was noted that it could be used as an indirect indicator to estimate economic indicators. Using environmental satellites, the correlation between changes in nitrogen dioxide concentration in North Korean regions and North Korea’s representative economic indicator, GDP, was confirmed, showing that the overall trends were similar. From 2007 to 2011, when North Korea’s economy rapidly grew and GDP sharply increased, nitrogen dioxide concentration also rapidly increased. After 2012, GDP showed a moderate growth curve, and during this period, nitrogen dioxide concentration fluctuated between increases and decreases but showed an overall upward trend.

In the study ‘Research on the North Korean Economy Using Text Mining’ by Jiyoung Choi, a research fellow at the Korea Institute for National Unification, text mining techniques newly applied in North Korean economic research were introduced. Text mining refers to techniques that extract meaningful information from unstructured text data such as speeches. For example, in the study ‘Changes in North Korea’s Fiscal and Financial Systems since Kim Jong-un’s Rise to Power’ conducted by Research Fellow Choi last year, papers included in North Korea’s ‘Economic Research’ materials were analyzed using text mining techniques to track changes in North Korea’s fiscal and financial systems since Chairman Kim Jong-un’s rise to power. The materials within the papers were classified by topic, noun words were extracted, and frequency, word relationships, and connections were analyzed to deeply analyze the messages.

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