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My colleague Jacob Kirkegaard, distant relative of Soren, and authority on foreign direct investment, points out that according to the recently released IMF FDI data, his homeland of Denmark invested $462 million in North Korea through 2009, accounting for 85 percent of the investment going into the country. Since the data comes from the Danish government, Jacob speculates that perhaps it is "some Danish radical leftwingers overstating the value of their socialist brotherly contributions to brother Kim J I for Danish tax purposes." I tend toward the more prosaic explanation that it is yet another case of national accountants being unable to tell North and South Korea apart. If anyone knows the true story feel free to write in.
The serious message here is that with North Korean transactions being so small relative to those typically observed in the world economy, simple reporting and misclassification errors can completely skew data derived from such mirror statistics. For their part, the North Koreans aren't saying anything.
