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North Korea Swot Analysis History Essay

Info: 4034 words (16 pages) Essay
Published: 1st Jan 2015 in History

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North Korea is in eastern Asia and occupies the northern half of the Korean Peninsula. Borders of north korea, in north China, In northeast there is a Russia, the Sea of Japan / East Sea to the east, South Korea to the south, and the west Korean Bay and Yellow Sea. The country covers an area of 120,549 square kilometer. It has 1,673 kilometers of land borders and 2,495 kilometers of coastline. The capital city of north Korea is P’yongyang, situated in the western part of the country, while the other cities Hungnam is in east, Ch’ongjin is in northeast, and Namp’o is in the west.

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An independent kingdom for much of its long history, Korea was occupied by Japan beginning in 1905 following the Russo-Japanese War. Five years later, Japan formally annexed the entire peninsula. Following World War II, Korea was split with the northern half coming under Soviet-sponsored Communist control. After failing in the Korean War (1950-53) to conquer the US-backed Republic of Korea (ROK) in the southern portion by force, North Korea (DPRK), under its founder President KIM Il Sung, adopted a policy of ostensible diplomatic and economic “self-reliance” as a check against outside influence. The DPRK demonized the US as the ultimate threat to its social system through state-funded propaganda, and molded political, economic, and military policies around the core ideological objective of eventual unification of Korea under Pyongyang’s control. KIM Il Sung’s son, KIM Jong I, was officially designated as his father’s successor in 1980, assuming a growing political and managerial role until the elder KIM’s death in 1994. KIM Jong UN was publicly unveiled as his father’s successor in September 2010. Following KIM Jong Il’s death in December 2011, the regime began to take actions to transfer power to KIM Jong Un and Jong Un has begun to assume his father’s former titles and duties. After decades of economic mismanagement and resource misallocation, the DPRK since the mid-1990s has relied heavily on international aid to feed its population. North Korea’s history of regional military provocations, proliferation of military-related items, long-range missile development, WMD programs including tests of nuclear devices in 2006 and 2009, and massive conventional armed forces are of major concern to the international community. The regime has marked 2012, the centenary of KIM IL Sung’s birth, a banner year; to that end, the country has heightened its focus on developing its economy and improving its people’s livelihoods. [2]



Accounting for 42 % of GDP in the year 1999, industry is the largest sector of the North Korean economy. Along with services, it gives 64% employment of the North Korean workforce. [3]


North Korea’s isolation from the outside world ensures strong control over the population and it is well prepared for any attack.

A well organized army acts as a deterrent to attacks by China, South Korea or the US.[1]


Almost self-sufficient in military production.

Extensive naval facilities.

Reasonably cordial relations with China and trade continue with former Soviet bloc countries.

Trading in missile technologies, banned internationally but still has ensured invaluable income.

The army has taken control over farms and other industries.


Wide range of natural attractions

3 star hotels presence at Pyongyang and other key locations

Good choice of local cuisine

Historical and cultural heritage


Impressive monuments and government buildings are available.

Good network highways

Clean and well-maintained tour coaches by people

Well-trained guys by an expert, excellent foreing language skills

capable of handling small conferences


The economy depends on many mineral resources for fuels, industrial raw materials, and metal processing and it also depends on these resources for export.

Anthracite coal, it has reserves of 1.8 billion tons, is the most abundant mineral resources in country. It is used for both domestic consumption and export.

Coal mines, mostly available in South P’yngan Province, it produced 68 million tons and 22 million tons, respectively, of anthracite and the less abundant lignite coal in 1990.

Iron ore is very important for domestic industry and is a major source of foreign exchange. It has reserves of 400 million tons

According to Western estimates, annual iron ore output increased from 8 million tons in 1985 to 10 million tons, It is increased by 25% in 1990.

North Korea has the largest and the best quality magnesite deposits in the world–an estimated 490 million tons. The mining of magnesite is used for the domestic industrial ceramics industry and for exports.

Other important minerals are lead, zinc, tungsten, mercury, copper, phosphate, gold, silver, and sulfur; manganese, graphite, apatite, fluorite, barite, limestone, and talc also are found in great supply. Zinc and lead ingots, among the leading exports, are produced at domestic smelting plants in North Korea.


• The machine building industry grew rapidly. It began in the mid-1950s and had become the important industrial sector by 1960 in North Korea. It supplies machinery needed for domestic industry and in agriculture like tractors and other farm machinery, and also produce extensive range of military equipment.

• The quality of machinery generally is considered below international standards. Utilizing the country’s relatively abundant iron ore, the steel industry is a major industrial sector in the country.

• The textile industry, the most important light industrial sector for the country, utilizes primarily locally produced synthetics and petrochemicals based fibers, cotton and silk.


Minerals, metallurgical products, manufactures (including armaments), agricultural, fishery products.[5]


The military of North Korea has been increasing its ability, power to launch cyber attacks against other countries.

North Korea  employs sophisticated computer hackers trained to launch cyber infiltration and cyber attacks.[8]


The country North Korea has one of the largest armies. It has an estimated up to 1.2 million personnel active duty military force.

Quarter of GNP is spending on Military by the country; it has up to 20% of men ages 17-54 in the regular armed forces.

North Korean forces have a substantial numerical advantage over the South (around 2 to 1) in several key categories of offensive weapons–tanks, long-range artillery, and armored personnel carriers.

The North Korea has largest special operations forces, it is designed for insertion behind the lines in wartime.[9]


With the extreme idolization of Kim Jong-il, people regard him almost as a divine figure, and the feudal values of allegiance and filialty are still firmly rooted among them.

High-ranking officials, who live in constant fear of purge and wiretapping, cannot muster the courage to form factions, but have to toady to the powerful for their own safety.

Same with the ordinary people. They cannot oppose the regime; they just shout ‘Hail to Kim Jong-il,’ though they live in dire poverty.[10]


The literacy rate, estimated at 99 percent in 1990, is high.[9]


North Korea has long maintained and close relations with China and Russia.

The fall of communism in Eastern Europe in 1989, and the disintegration of the Soviet Union in 1991, resulted in a devastating drop in aid to North Korea from Russia, although China continues to provide substantial assistance.[11]


Self-sufficiency in agriculture remains an important pillar of North Korean ideology, self-sufficiency in food production is deemed a worthy goal

According to a 2012 report by South Korea-based North Korea Resource Institute (NKRI) North Korea has substantial reserves of iron ore, coal, limestone and magnesite.

In addition, North Korea is thought to have tremendous potential rare metal resources, which have been valued in excess of $6 trillion USD.

The most successful export industry is the garment industry. Production is by a North Korean firm for a European or other foreign partner, by a Chinese firm operating in North Korea with a North Korean partner, or by North Korean workers working in Chinese or other foreign factories. Wages are the lowest in northeastern Asia.[5]



Limited air access

Strict visa requirements

Public image of North Korea- driven by politics and hostile media

Tourism infrastructure need upgrading

Limited training for personnel dealing with tourists

Limited choice of non-Korean food

Limited range of souvenirs, expensive

Restrictions of foreign private investments

Harsh winter reduces tourist season to 9 months or less. [4]


North Korea is dependent on outside aid to feed its 23mn people, many of whom have attempted to flee to South Korea or China. North Korea’s decision to test nuclear missiles in 2006 and continuing missile tests in the past two years, which intensified in 2009, led to further UN and economic sanctions and, as such, worsened conditions for the North Korean population and a decline in income-earning arms exports.

The closed economy is unable to resolve the country’s severe shortages.

China will always have the last word and has to rein in North Korea’s tortuous and threatening foreign policy.

The country continues to try to evade trade sanctions and ships. [1]


The military is incapable of producing aircraft, sophisticated radars or modern electronic equipment.

Limited research and development facilities and investment.

UN sanctions have had a negative effect on North Korean defence exports. [1]


As was the case with the growth in national output, the pace of growth has slowed markedly since the 1960s. The rate declined from 41.7 percent and 36.6 percent a year during the Three-Year Plan and Five-Year Plan, respectively, to 12.8 percent, 16.3 percent, and 12.2 percent, respectively, during the First Seven Year Plan, Six-Year Plan, and Second Seven-Year Plan.[5]


Despite a fairly steady increase in the 1980s, coal production has not been able to catch up with rising demand. This situation has created a persistent energy shortage because the country relies on coal as its main energy source and lacks any reserves of oil or gas.

The lagging coal industry remains a major bottleneck. The aging of existing mining equipment and facilities, the inefficiency that arises from the increasing need to mine deeper seams, and a lack of modern, efficient equipment are the primary reasons for the production lag in extractive industries.

Because of the lack of domestic reserves, the country continues to rely on foreign sources for bituminous coal.

However, the rest of its resources (brown and lignite coal, iron ore, cement, copper, lead, zinc, gold, tungsten, graphite, salt, and silver) are not sizeable enough to make the country a major world producer.[7]


Production levels since the early 1960s, however, have been disappointing.

Light manufacturing has not kept pace with heavy industry.

The heavy dependency on the Soviet Union for financing, technology, equipment, spare parts, and energy caused a major decline in manufacturing once the Soviet Union ceased to be a source of assistance.

Outdated technology, a lack of coking coal, and the low purity of domestic

Iron ore created serious problems for the iron and steel industry. These difficulties forced the government to scale down the crude steel target by the end of the Third Seven-Year Plan compared with the earlier target of 15 million tons by the end of the 1980s.[5]


The foremost weakness of the North Korean system is that it is not a socialist system, but a modern version of the feudal system.

People are growing more and more indifferent to socialist values, and communist ethics have fallen to the ground. Also, corruption is widespread among officials and a growing number of people are turning to aberrant Behavior.[10]


North Korea’s economy is in ruins. The disintegration of the Soviet Union, government mismanagement, and natural disasters has been partly responsible for the poor performance of the country’s economic sectors.

Industry is the dominant sector but is unable to generate revenue, jobs, and consumer goods to meet the country’s demands.[12]


North Korea has a centralized government under the rigid control of the communist Korean Workers’ Party (KWP), to which all government officials belong. A few minor political parties are allowed to exist in name only.[13]


North Korea’s relationship with the South has determined much of its post-World War II history and still undergirds much of its foreign policy. North and South Korea have had a difficult and acrimonious relationship since the Korean War.

North Korea’s closest allies are China and Russia. It maintains limited relations with other nations, but has no official, diplomatic ties with South Korea, the United States, or Japan. All member nations of the European Union with the exception of Estonia and France maintain diplomatic relations with North Korea.[14]


Service sector is the least developed sector in the North Korean economy, contributing just 28 percent of GDP in 1999.

There is no precise record of employment figures for the services sector, but the little available evidence indicates that only a small percentage of the labor force is involved.[3]


North Korea’s financial sector is state-dominated. Two state banks control the entire industry: the Central Bank of North Korea, which has 227 local branches, and Changgwang Credit Bank, with 172 branches. [3]


The construction industry has also suffered from the country’s economic decline. Since the 1990s, a decline in industrial construction, housing, and building of infrastructure has reduced activity in the sector.

The construction industry’s share of GDP fell from 9.1 percent in 1992 to 6.1 percent in 1999.[3]


The energy sector is one of the most serious bottlenecks in the North Korean economy. Since 1990 the supply of oil, coal, and electricity declined steadily, and seriously affected all sectors of the economy.[5]

Crude oil was formerly imported by pipeline at “friendship prices” from the former USSR or China, but the withdrawal of Russian concessions and the reduction of imports from China brought down annual imports. [5] 

 Coal production peaked at 43 million tons in 1989 and steadily declined to 18.6 million tons in 1998. Major causes of coal shortages include mine flooding, and outdated mining technology. As coal was used mainly for industry and electricity generation, decrease in coal production caused serious problems in industrial production and electricity generation. [5]

The country’s sparse agricultural resources limit agricultural growth. Climate, terrain, and soil conditions are not particularly favorable for farming. Only about 18% of the total landmass, or approximately 22,000 km², is arable; the major portion of the country is rugged mountain terrain. The weather varies markedly according to elevation, and lack of precipitation, along with infertile soil, makes land at elevations higher than 400 meters unsuitable for purposes other than grazing. [5] 



North Korea’s on-off attitude towards participating in the six party talks without further conditions continues to pose a dangerous risk to future denuclearization and threatens its neighbours.

While China and South Korea have increased efforts to prevent North Korea from becoming isolated, the US has become increasingly impatient with what it perceives as mollycoddling of the country.

South Korean attempts to exploit cheap North Korean labour in joint ventures could employ hundreds of thousands of North Koreans and the expansion of business should improve security on the peninsula.

Bilateral talks with Japan leading to the establishment of working groups to resolve disputes may ease the tension between the countries. [1]


Iran, Pakistan, Syria, Myanmar and Yemen are among the countries that allegedly trade with North Korea for nuclear technology or information.

North Korea has sold 18 BM-25 missiles to Iran, according to German intelligence.

Iran is expected to modify them to increase their range and also work on attaching nuclear warheads.

The successor to Kim Jong-il may have to deal with a changed international landscape and an increasingly impatient China, possibly leading to a mellowing of relations. [1]


To stress the importance of developing the mining and power industries and rail transport

Iron ore continues to be important for domestic industry and is a major source of foreign exchange.

The mining of magnesite is important for the domestic industrial ceramics industry and for exports.

Other important minerals are lead, zinc, tungsten, mercury, copper, phosphate, gold, silver, and sulfur; manganese, graphite, apatite, fluorite, barite, limestone, and talc also are found in great supply.

As with other industries, only significant investment will allow the mining industry to become a vital source of economic growth.[7]


During the Third Seven-Year Plan (1987-93), the government plans to modernize the machinery industry by introducing high-technology and high-speed precision machines and equipment.

Utilizing the country’s relatively abundant iron ore, the steel industry is a major industrial sector.

Since the 1970s, the leadership has begun to admit openly the backwardness of consumer goods in terms of quality and variety.

The government’s stress on providing adequate consumer goods continues into the early 1990s. In his 1992 New Year’s address, Kim Il Sung stressed achieving the people’s long cherished desire that “all people might equally eat rice and meat soup regularly, wear silk clothes, and live in a house with a tiled roof.”

By modernizing existing equipment and installing new spinning and weaving machines, the government plans to increase the annual output of textiles.

North Korea also has a chemical weapons capability.

The country’s manufacturing facilities need modernization and the expansion of its light and consumer industries.[6]


A trip to North Korea – novelty, ‘bragging rights’

Perception of last bastion of socialism/communism

Focused marketing and destination brand development

Attract foreign arilines to open scheduled or charter air services

Foreign tourism development

Huge potential markets in neighbouring countries

Potential niche products, winter sports, ecotourism, VFR, conferneces

Accelerating cooperation with South Korea and potential for joint destination marketing.[4]


In past North Korea was in war with US, but now unlike past generations, the new leadership in North Korea does not want to fight the US. It wants peace. North Korea is more willing to give up nuclear weapons if the US provides them with a nuclear umbrella. So it is very good opportunity for the north Korea that they win American hearts and minds so that they get a protection from the American nation n terms of nuclear weapons.[15]

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Until recently the official retail sector was mainly state-controlled, under the direction of the People’s Services Committee. Consumer goods were few and of poor quality, with most provided on a ration basis. There were state-run stores and direct factory outlets for the masses, and special shops with luxuries for the elite-as well as a chain of hard-currency stores. So the country can open up its economy in retail sectors so that good quality of goods and also wide range of products are available.[5]

Machinery building was regarded as the key to industrialization. The next largest shares in total industrial production in 1965 were 17.2 percent for textiles and 9.1 percent for the food processing and luxury goods industries.

So the economy of North Korea can take steps to develop the textile and food processing sectors.

Construction was once an active sector in North Korea. This was demonstrated not only through large housing programmes, of which most were visible in the high-rise apartment blocks in Pyongyang, but also in the smaller modern apartment complexes widespread even in the countryside. So it can be a good opportunity for the North Korean economy to develop its construction business like it was before.



The US has pledged that if North Korea attacks South Korea it will send up to 690,000 troops and 2,000 aircraft.

Illicit arms exports and proliferation by North Korea may well have led to weapons and technologies ending up in the hands of terrorist groups and/or their sponsoring states.

North Korea’s decision to test nuclear missiles has led to a potential arms race in the region, with Japan and South Korea both requesting larger defence budgets in 2006.

There is always the danger that one of these countries, or both, could develop its own nuclear weapons capability. North Korea Defence & Security Report 2010. [1]


Legal arms exports and all other exports remain limited.

Increased maritime security is reducing North Korea’s important illicit trade, which it heavily relies on for funding of nuclear and other programmes.

Hints that Japan may consider imposing sanctions will add to the already strong restrictions in place. Japan is North Korea’s third largest trading partner and the tightening of restrictions has already been felt.

If the republic ever collapses it would cause untold suffering, with huge refugee exoduses across the Chinese border and elsewhere, destabilizing the region. [1]


Government bureaucracy

Lack of tourism infrastructure funds

Lack of destination marketing funds

Negative impact on markets of ongoing political developments

Possible instability if and when the country’s leadership changes

Fear of an invasion by US and South Korean forces.[4]


Possibility of war with China/North Korea/Japan

Energy shortage if society follows Japans lead in the atomic energy 

North and South Korea have never signed a formal peace treaty and thus are still officially at war; only a ceasefire was declared.[16]


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