Logistics: An Army With A Country


November 9, 2009: The North Korean armed forces has solved its growing logistics (supply) problems by taking control of many industries that export goods (and thus earn hard currency to pay for military imports.) The military already owns many factories that produce military goods, but now they are going after those that make it possible to buy foreign goods. While various government ministries argue over who should control which industry or factory (all of them state-owned), the army has recently been settling the arguments by pointing out that it has more firepower than everyone else.

The situation in North Korea is dire, which explains the recent antics of the soldiers. The North Korea GDP is only about $25 billion, and defense spending is somewhere north of 20 percent of that. This is $5 billion, for 1.1 million troops. Not a whole lot when you consider that the North Koreans have to pay world prices for fuel to run their warships, aircraft and trucks. These days, the trucks are more likely to be making the rounds of local farms, collecting a special "military tax" of 10-25 percent of the recent harvest, than transporting troops to a training exercise. The generals may not be able to afford new weapons or fuel (for training), but they know the troops have to be fed. Many are not, or at least not enough, as incidents of off duty troops stealing food are on the increase.

Meanwhile, South Korea, with a GDP of nearly a trillion dollars, spends 2.5 percent of that on defense. That's nearly $25 billion a year, for about a third fewer troops than North Korea (which has half the population of South Korea). South Korea takes much better care of its troops, arming them with modern weapons, and providing ammo and fuel so there can be lots of practice. 

Let's put this in perspective. Five nations (U.S., China, France, Britain and Russia), account for 63 percent of global defense spending. The U.S. spending, over $600 billion in the last year, accounts for most of that (42 percent of global defense spending). The U.S. spends 4 percent of GDP on defense, while China spends 2.7 percent, France 2.4 percent, Britain 2.3 percent and Russia 2.7 percent. The nations that spend the most of their GDP on defense are also wealthy. Saudi Arabia spends 9.4 percent and Israel 7.2 percent. Only the few remaining communist police states (like North Korea and Cuba), spend more.

You get what you pay for, and North Korea can't pay much. Even if they have turned their nation from "a country with an army" into "an army with a country."




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