Will North Korea be the next Qatar?

The economic data of North Korea, as a secretive regime, is often not available to the public. However, a recent amazing breakthrough in geological exploration puts it on the map. It has been confirmed by Dr Louis Schurmann, Fellow of the Australasian Institute, that the territory of North Korea has the largest known rare earth elements (REEs) deposit, estimated to be 216 million tons. REEs are composed of 17 elements on the periodic table. If petroleum is the blood of industry, REEs are considered to be the vitamins of modern industry. Green technology, LED, defense systems, optical protection layer and consumer electronics can not be produced without REEs. The value of the natural resources could bring trillions of dollars to North Korea's national income. In other words, North Korea could be as rich as Qatar within one night.

"It's been no secret that they have a lot of rare earths," the Christian Science Monitor said. "They've got a terrible economy and they've got all this marketable resource, but they can't manage to get it together to do anything with it and make any money from it." Undoubtedly the exploiting of rare earth mines requires advanced technology, but Pyongyang (the capital of North Korea) is short of such technical power. If North Korea was able to tap its underground resources on its own, it would no longer be a country with material difficulties in Northeast Asia."

North Korea has been thinking of drawing support from European and other Asian investors for REEs’ exploiting. In 2013 Korean Natural Resources Trading Corporation cooperated with a British Virgin Islands’ corporation to develop its REEs deposits in Jongju. It can not be denied that many potential foreign investors are afraid of North Korea’s business environment because the government could not guarantee the security of foreign investments. In other words North Korea’s political instability blocks foreign direct investment. However, North Korea is not active in cooperation with foreign countries due to Occidental public opinion which might affect the stability of its regime. Theoretically not every resource-based economy can be rich because the market depends largely on the health of the economy, the degree of freedom and international cooperation.

Before the big discovery in North Korea, China was the REEs giant in the world, dominating almost the whole global trade. A report from a South Korea-based trade organization said that North Korea sold a great quantity of REEs to China in May and June this year which were worth $1.8 million. Exports to China are still expected to increase at a dramatic rate simply because REEs exports are considered by the government as a rapid way to expand the national economy. However, it deserves to be noticed that the fortune may lead to corruption inside the country.

North Korea currently has a good opportunity to carry out economic reform. The locked doors against the world will greatly restrict its economic development. North Korea has recently revealed that South Korea also has positive intentions to cooperate for the REEs exploiting. Holding the world's largest deposit of rare earth minerals, North Korea might be the next Qatar if the government can make itself able in tactics.

Zhaosai Y.