hankyoreh

A former unification minister and senior fellow at the Sejong Institute claims that the central bank’s August estimate of North Korea’s gross national income, or GNI, was overblown and that it actually stood at just one one-hundredths of that of South Korea.

In the March issue of the Sejong Institute’s monthly magazine, Lee Jong-suk estimated the North’s nominal GNI at US$8.4 billion to $8.9 billion, only one one-hundredth of South Korea’s GNI, while projecting the per capita GNI of the communist country to be around $369 to $389, one fiftieth of that of South Korea.

Lee’s estimates contrast with projections made by the Bank of Korea last August, when the central bank said that the North’s GNI stood at one thirty-fifth of that of South Korea. At the time, the BOK put the North’s gross GNI and per capita GNI at $25.6 billion and $1,108, respectively.

Lee said, “Though the BOK’s statistics are used broadly and taken as being trustworthy, the way it estimated the North’s GNI is outside of universally-accepted calculation methods.” He claimed that the central bank was mistaken when it used South Korea’s price level and value-added tax rates in calculating the North’s income. He also claimed that the BOK’s estimation of defense costs for the North should have been $2.1 billion to $2.6 billion, not $5 billion.

Lee said that the Lee Myung-bak administration’s pledge to help the North raise its per capita GNI to $3,000 if it dismantles its nuclear programs was also based on mistaken calculations, under which it put the income of the communist nation at $1,000. “If it had put the income estimate at around $300 to $400, the plan could not have been proposed, even as rhetoric,” he said.

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