OCTOBER 30 2008 09:56h
North Korea`s centrally planned economy, built around the state ideology of self-reliance, has little time for capitalism.
"We know many countries are struggling due to the financial crisis ... we have no problem here," said a North Korean guide working with a visiting aid group from the South, whose economy has been among the hardest hit as financial markets tumble around the world.
North Korea's centrally planned economy, built around the state ideology of self-reliance, has little time for capitalism and has only in recent years grudgingly allowed even street markets to emerge.
It has no stock market and visitors pay for everything in foreign currency at an officially set -- and inflated -- exchange rate.
It also has one of the world's poorest economies that has managed to avoid any impact from the surge in economic growth of its East Asian neighbours.
Constantly under threat of famine, its 22 million population has an annual per capita income, by one estimate, of no more than $400. That's about 2 percent of the level in capitalist South Korea.
"We are hearing that it will take a while until the countries come out of the crisis, but ... we are okay because we have a different system," said the guide, whose duties included blocking his charges from making any contact with ordinary North Koreans.
But the looming global recession has come at an awkward time for Pyongyang's leaders, just as they are gradually mending fences with the outside world over their nuclear weapons ambitions with the hope of tapping into the international economy from which they have largely isolated themselves for the best part of 60 years.
This month, Washington removed North Korea from its list of governments that sponsor terrorism, lifting a major deterrent to doing business with a country still barred under United Nations sanctions from dealing with outside financial firms.
"The removal from the list will help our country improve relations with the United States," the guide said, without going into detail on how it might lift an economy whose industrial base has mostly rusted into decay.
North Korea's economy had flourished in the 1970s but has since been contracting, prompting many analysts to say it has become a failed state. Its current leader Kim Jong-il inherited the position from his father and North Korea's first ruler.
Despite the policy of self-reliance, North Koreans depend heavily on aid, mostly from neighbouring China and South Korea but the government shows no sign that it is ready to open up more than a crack.
Visitors are banned from bringing their mobile phones into the country. The Internet exists, but it can take quite a long time to send a simple email.
"Fill in the application form and give it to me. I will get back to you quickly, in just 30 minutes," a member of staff at one of the two biggest tourist hotels in Pyongyang told a guest who asked to use a computer to send an email.
The hotel staff balked when the guest said he wanted to email his wife in South Korea, with which the North remains technically at war.
"No, you can't. You should not write to an email address in the South," said a hotel worker in charge of international communications.
An hour, rather than the promised 30 minutes later, she allowed the guest to send an email to his daughter in the United States for $3 -- in hard cash.