North Korea spends about a third of income on military: group

Tue Jan 18, 2011 3:21am EST
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SEOUL (Reuters) - North Korea is spending about a third of its national income on its military, a much larger amount than announced, as it builds its forces despite a struggling economy, a South Korean think tank said on Tuesday.

The North said it spent $570 million on its military in 2009, but the real amount, calculated on an exchange rate based on purchasing power parity terms, was $8.77 billion, the state-run Korea Institute of Defense Analyses (KIDA) said in a report.

The North's gross national income stood at 28.6 trillion won ($25 billion) in 2009, compared with South Korea's 1,068 trillion won ($958 billion), it said.

North Korea leader Kim Jong-il's ruling principle has been a policy of "songun", or putting the military first, at the expense of its moribund closed economy.

"North Korea has increased its military spending continuously despite its extreme economic crisis in the 1990s and its negative growth after the mid 2000s," the KIDA said.

"North Korea's actual military spending is estimated to be 13 to 15 times greater (than the amount it announced) applying North Korea's currency exchange rate in purchasing power," the report said.

According to figures released by North Korea, its military spending rose to $570 million in 2009 from $540 million in 2008, $510 million in 2007 and $470 million in 2006, KIDA said.

The North was once richer than South Korea, which is now Asia's fourth-largest economy.

North Korea has only grown weaker since Kim took power and after a famine in the 1990s killed an estimated 1 million of the North's then population of 22 million people.   Continued...