A Study on the Reality and Possibilities of Economic Reform in North Korea: Tasks for a Successful Transformation of the North Korean System. A Study on the Realities and Possibilities of Economic Reform in North Korea : Tasks for Successful Reform of the North Korean System / Kim, Young-Yoon -- Seoul : Korea Institute for National Unification, 2007.
Socialistic Economic Reform
There are two approaches to the economic reform that is about transforming the system: a radical approach and a gradual approach. In the case of the former East Germany, the radical approach was used because of the political and.
The Side Effects of Economic Reform
This particular type of corruption, which is one of the main weaknesses of bureaucracy, is a deviant behavior of organizations or individuals. In a socialist system, the administrators of the party or government usually try illegal trades to achieve their goals.
Ⅲ . Case Studies
- Economic Reform in China
- The Transformation into a Market Economy in China
- The Primary Factors and Lessons of Chinese Economic Reform
- Economic Reform in Vietnam
- Process of Economic Reform
- The Factors of Economic Reform and Its Lessons
Second, decentralization, which emerged in the Mao era, played a crucial role in the formation and evolution of the market. First, the dual banking system was introduced and the functions of the central bank and the commercial state bank were separated.
Reality and Evaluation
Main Points and Characteristics of Economic Reform in North Korea
First, the price (25 times) and wage (18 times) were increased in accordance with the reality of the market in July 2002, and the exchange rate was updated (70 times) in August of the same year. The purpose of the “July 1st measure” was to stimulate the motivation of ordinary people by raising wages and prices. 3 The Supreme People's Assembly (March 2002) reported that national corporate profits accounted for 77.6% of 2003 budget revenues.
Fifth, the autonomy of individual companies was strengthened as the scope of government planning in the production activity of each company was reduced and the responsibility of the manager was strengthened. Sixth, North Korea accepts the market as one of the legal system of the distribution of goods. Establishment of the General Market - Allowance of the Selling Counter Business - Dualization of the state-owned restaurant and.
Side Effects of Economic Reform in North Korea According to the point of view, the side effects of economic
Installation of the currency exchange - Change of the foreign payment system - Reduction of the minimum wage - Improvement of investor relations. Side effects of economic reforms in North Korea According to the point of view, side effects of economic.
Economic Aspect
The "Socialist Penal Code" of 2004 has many important differences from the previous legislation; for example, Article 160 provides less than 2 years imprisonment for supervisors of organizations that illegally give products to unrelated persons. This shows that such cases as embezzlement or arbitrary disposal of products are many. According to Article 167, which defines the arbitrary installation and use of a telephone as a criminal act, we can conclude that there are more and more cases of illegal installation of telephones to people who have money but cannot follow the usual procedures.
According to this article, anyone who arbitrarily decides a price or changes the official price will face punishment, indicating that some prices were arbitrarily decided after the "July 1st Measure".
Social Aspect
- Evaluation and Prospects of North Korean Economic Reform
After the "July 1 Target" in 2002, there have been various deviant behaviors that threaten the very bases of socialism in North Korea. In the four years since the "July 1st Measure," South Koreans have formed a wide spectrum of opinions and views about the economy of North Korea. Some experts suggest that the economic reform in North Korea is changing from the "reform of the internal system" to the "reform of the system itself",5 and the direction of the reforms is shifting towards gradual marketization. 6 Others argue that fundamental changes regarding the economic system have not started yet,7 therefore the current reforms must strengthen the socialist system in North Korea.8.
Is It a Road to Capitalism?”, (Korean), Graduate School of North Korea at Kyungnam University, Studies on Modern North Korea, vol. In this section, the economic reform taking place in North Korea will be examined from a simple marketing perspective. In other words, begging the question, is economic reform in North Korea really focusing on marketing?
Evaluation on Marketizational Motive of Economic Reform in North Korea
Since the means of production in the market economy system are the private property of each individual who is a member of society, anyone can use or dispose of these means arbitrarily within the extent of the given legal order. The forms of the determination system are mainly classified according to the degree of centralization as complete centralization, administrative decentralization, manipulative decentralization and complete decentralization. There are certainly signals that show the autonomy and efficiency of the economy, such as the decline of the central planned index, the increase of autonomy for the provincial economy, the removal of "mediocrity" and the introduction of a competitive system.
There are some examples of a decentralized information system, such as compensation for factories and raw material and parts trading companies, and a master plan for a general wholesale market for the supply of raw materials (Chosun Shinbo, April 28, 2003). Motivation encourages people to do something and is the main source of economic activity and the engine of change and development of the whole society. The economic behavior of an individual is determined by the purpose of the behavior and the incentives provided by society.
Evaluation on Economic/Social Aspects
North Korea tried to arrange division based on labor, which was useful to increase productivity. I hardly believed I was in North Korea when I visited the Tongil Street Market. His comment suggests that the results of the reform are manifesting themselves in the areas of merchandising and distribution. Fourth, the changes in consciousness taking place across society will promote marketization in North Korea in the long run.
Comparing marketing in North Korea with other socialist countries such as China and Vietnam clearly shows that the economic reform in North Korea does not have the characteristics of fundamental changes to the system. First, the content and quality of reform in North Korea is far beyond that of China and Vietnam. North Korea shows a strong will to stick to the basic principles of socialism, which is why reform in North Korea is so sluggish.
Evaluation and Prospect of North Korean Economy
16 The comments of Kim, Yong-Sul, the vice minister of the Ministry of Trade in North Korea (September 2002). One of the most interesting things in North Korean reform is the limited autonomy for companies and income differentiation. One of the important standards of change in the North Korean economy is the reform of agriculture.
However, it appears that there is no other path for North Korea than to import more of the principles of the market economy. Considering the deficit economy that North Korea is now experiencing, there is a serious possibility of deterioration in the daily lives of the general population, despite the positive effects of the “July 1st” measure. It is because the changes in policies give bureaucrats more opportunities to pursue their own economic interests.
Ⅴ . Tasks for Successful System Transformation through
- Premises for Successful Economic Reform
- Direction of Economic Reform for North Korea If above premises are satisfied, North Korea can pursue economic
- Specific Tasks
- Enlargement, Improvement, and Development of the “July 1 st Measure”
- Reform Tasks in Social Context
It is difficult to expect that active economic reform will be pursued amid the uncertainties of the North's regime. ④ public goods (i.e. education, media, public health and culture) should be improved to strengthen the function of the market. For this purpose, it is necessary to constantly expand and strengthen the upgraded price system of the "July 1st Measure".
In North Korea, the plans of the government still retain proxies for production and management. In the financial area, the function of the financial market must be introduced to ensure the internal accumulation of capital and reasonable investment. One of the most fundamental premises of an activated market economy is "the rule of law".
Ⅵ . Conclusion
The Role of South Korea
One of the cooperative ways to activate the informal sector in North Korea is to promote transactions of South Korean goods at farmers' markets and "general markets." In addition, it is also beneficial to encourage private businesses prevalent in the informal sector to upgrade into profitable cooperative businesses. If this shift in consciousness—the market mechanism being more important than work in the planned economy sector—is widespread, people's experiences must be combined with the tasks of economic reform. Aid goods, such as everyday goods, should be allowed to be traded in general markets.
At the company level, it is important to combine production/distribution/marketing into a whole, so the jointly produced goods should be marketed on the domestic market. Geumgang, Gaesung Industrial Park and Pyongyang, or part of the goods produced in Gaesung Industrial Park, are sold in the domestic North Korean market, which could lead to changes in North Korea. In the long term, direct trade will contribute to the recovery and development of the North Korean economy and increase.
Final Comments
Otherwise, if the international community intervenes negatively and reduces support, the stagnation of the North Korean economy may deepen and the possibility of regime change may increase. Regime insecurity will be a problem when ordinary people in North Korea have many grievances and protests due to the struggling economy. However, the legitimacy of the North Korean regime is not based on economic achievements, but on juche ideology and military-first policy.
In other words, economic tightening itself is not directly related to regime uncertainty. On the other hand, it seems almost impossible that the measures in the adopted or revised laws would return North Korean society to the socialist system of the past. Moreover, this kind of uncertainty can deepen the dependence of the North Korean economy on China and South Korea and accelerate the secession of the people.
