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The Economy
The economy of a nation depends on the characteristics of its people and available natural resources. Korea as a unified nation was blessed with an industrious people and abundant natural resources, though the natural resources were not uniformly distributed. To get a better understanding of the changes that have occurred in the two Koreas since their division, compare the production capabilities of the two sections when they were first separated.

Comparison of Production in
North and South Korea, 1945

Category 

South Korea 

North Korea 

Steel

5%

95%

Hydro-electric Power

10%

90%

Chemicals

15%

85%

Coal

20%

80%

Food

65%

35%

Machinery

65%

35%

Consumer Goods

80%

20%

K. Lee (1984). A New History of Korea. Harvard University Press

So at the time of the partition, North Korea had most of the minerals, energy resources, and heavy industry, while South Korea had most of the light industry and agricultural lands. Most of Korea's industrial and energy facilities were destroyed in the Korean War, so in the mid-fifties, both North and South Korea essentially started rebuilding their respective economies from the ground up.

Image of Korean farmers working on a farm.In 1945, industrial and agricultural methods were still primitive by contemporary western standards. Most of the light industrial products were produced by hand in small shops like this brass factory.

Agriculture in 1945 was also almost entirely done by human and animal power. Although farmland was not destroyed by the War, the lack of industrial capacity to produce heavy farm machinery and fertilizers, as well as the lack of investment capital in the hands of farmers, prevented widespread use of modern farming methods for decades. Even in the 1970's, plowing with draft animals was the rule rather than the exception, as shown in the photo below.

Image of a Korean farmer using cows to plow farm land.

While most of the minerals are still in the North and most of the farmlands are still in the South, the relative size and strength of the respective economies of North and South Korea have changed significantly. The economies in the two Koreas have been rebuilt during the last 40 years according to the different economic philosophies of their respective governments and within different economic communities. How have they fared? For a quick summary, you can visit the sections here on the South Korean economy and the North Korean economy. For a more in-depth look, you will need to find references in your library or on the Internet.

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