North Korean Economic Analysis

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Term paper Vinogradova Svetlana, 341 group Differences of economic institutions between North Korea and South Korea Introduction A single nation was divided into two different countries in 1945. It was the starting point for a radical change in political, economic and cultural development of North Korea and South Korea. Previously one nation became two countries with opposing ideological regimes and political systems, which are faced with serious contradictions at risk escalate into an armed confrontation. They are the reflection of a bipolar world in modern times within a single race, so we can see how regimes might be change now and can they be effective in state capacity and economic growth under modern conditions. In this study the economic…show more content…
Korea needed to change their policy and the turn was towards marketization. First of all, the main step was the creation of a new free trade zone or special economic zone along the Tumen River, which mean the trade expanding and attraction to foreign investment.11 The North Korea became more open for non-communist states. The foreign visitors within the economic projects and another sources of information was a effective way to stimulating trade.12 In addition, some small private markets were allowed, which reduced the problem of food shortages. At the same time, positive changes was made in South Korea. Knowledge industries was advanced such as microcomputers and biotechnology. This improvement gave the advantage for the country of competitiveness in the international marketplace.13 Modern institutions Currently the Korean Peninsula represent two different regimes and the opposite economic systems. Both have problems and facing with need of reforms. What institutional design can we find in these countries? First of all, economy of South Korea is liberal with autocratic…show more content…
Thus, we can see the gap in fifty years because of the disability of adaptation by regime. Accordingly, there is an importance of governmental intervention in the economy during the transition from one system to another, however, the flexibility of policy is the decisive factor of consistent development. For example, the ability to reduce the interference in the economy of South Korean state allowed to make the advanced economy instead of stagnation. However, the North Korean economy began disrupted because of a stasis of the regime. 19Волощак В. И. Внешняя и внутренняя политика КНДР в период правле- ния Ким Чен Ира, материалы Студенческой научно-практической конференции ДВФУ - 2014, Владивосток, 12–17 мая 2014 г. / Под общ. ред. Я.А.Барбенко. – Владивосток: Дальневост. федерал. ун-т, 2014. – Режим доступа: http://www. publikacii-oonirsc. 58 20Bazhanov E., Bazhanov N.Soviet Views on North Korea: The Domestic Scene and Foreign Policy, Asian Survey, Vol. 31, No. 12 (Dec., 1991), p. 1133 6 Term paper Vinogradova Svetlana, 341

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