North Korea in the World Economy

North Korea in the World Economy

North Korea in the World Economy

North Korea in the World Economy

Synopsis

This book brings together a selection of many of "the world experts on the North Korean economy and covers such important issues as: possible unification with South Korea, the significance of China's economic success and the roles of Europe and the United States in North Korea.

Excerpt

North Korea today evokes many unflattering images: famine, poverty, a rogue state, the last vestiges of the Cold War, weapons of mass destruction, human rights crises, totalitarian regime, isolation, refugees, etc. President Bush's State of the Union address in January 2002 added yet another negative image to the list when he branded North Korea as part of an "axis of evil" along with Iran and Iraq. During his visit to Seoul, South Korea, a month later, however, President Bush expressed support for Seoul's policy of reconciliation and engagement with North Korea. He added that the United States has no intention of attacking North Korea, is ready to talk, and will continue giving food aid to North Korea. the seemingly conflicting messages offered in the State of the Union speech and during his visit to South Korea illustrate the depth of the foreign policy challenge North Korea poses for the United States.

North Korea has been in dire economic straits for almost a decade and continues to face very difficult economic challenges. Throughout the past decade, North Korean gross domestic product (GDP) had a negative growth rate, contracting by as much as 50 percent in the mid-1990s by some estimates. Factories are operating at only 20 to 30 percent of capacity. Industrial infrastructure is devastated. Severe shortages of food and energy continue. in addition, North Korea has to grapple with the question of regime legitimacy: it needs to improve the welfare of its people, and interact with other nations according to international norms and good business practice.

Contrary to popular perception, in the last few years North Korea has been moving towards opening its doors and establishing economic reform - slowly and gradually. Reform is a difficult process - especially for a country like North Korea. in the short run, it can be disruptive and create major social problems. North Korea faces the added challenge of anti-reform pressure from the older generation of revolutionary leaders who remain powerful. Having lost a million or more citizens to starvation and related disease, North Korea also has no margin of error. So, the economic restructuring North Korea has adopted is not of the big bang variety, but creeping reform, so gradual that some people do not notice it. Within the past two years, North Korea's changing attitudes towards economic opening and reform have become much more noticeable. This should

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