North Korea or Democratic People’s Republic of Korea encompasses roughly an area of 46,540 sq mi (120,538 sq km), approximately the same size as the U.S. state of Mississippi. Korea was an independent kingdom for much of its long history. It was occupied by Japan in 1905 following the Russo-Japanese War. Five years later, Japan formally annexed the entire peninsula. Following World War II, Korea was split with the northern half (above 38°00' North latitude) coming under Soviet-sponsored Communist domination.
Under its founder, President KIM Il-so'ng, North Korea adopted a policy of ostensible diplomatic and economic "self-reliance." KIM's son, the current ruler KIM Jong Il, was officially designated as his father's successor in 1980, assuming a growing political and managerial role until the elder KIM's death in 1994. Since August 2003, North Korea has participated in the Six-Party Talks with China, Japan, Russia, South Korea, and the US designed to resolve the stalemate over its nuclear programs.
Two-way trade between North and South Korea, legalized in 1988, had risen to more than $1 billion by 2005, much of it related to out-processing or assembly work undertaken by South Korean firms in the North. This total includes a substantial quantity of donated goods provided to the North as humanitarian assistance or as part of inter-Korean cooperation projects. More than half of two-way trade in 2005 was non-commercial, although business-based and processing-on-commission transactions continued to grow. As of September 2006, 13 South Korean firms were manufacturing goods with North Korean labor in the Kaesong Industrial Complex (KIC). Most of the goods are sold in South Korea; a small quantity is being exported to foreign markets.
CIA World Factbook; U.S. State Department Background Notes, 11/2006; 9/2006