This paper aims to investigate and summarize trends in North Korea`s economy in 1990s with respect to local economy. I focus on the nature and meaning of the so-called change in North Korea. This paper utilizes what is called decentralization and mark...
This paper aims to investigate and summarize trends in North Korea`s economy in 1990s with respect to local economy. I focus on the nature and meaning of the so-called change in North Korea. This paper utilizes what is called decentralization and marketization as a criterion to interpret and evaluate the so-called change in North Korea. In North Korea an local economy system is that the local government should solve the problems of production and supply of goods to local citizens without the help of the central government. In other words, the local economy system is a self-reliant system at a regional level. The economic crisis of the early 1990s destroyed the planned economy system in North Korea. Moreover, it paralyzed the central distribution system including the rationing system. The central government began requesting that local governments solve the problems of clothing and food for themselves. Under this situation, the local economy system in North Korea could not help but enter a new phase. In the reorganization process of the local economy system in the 1990s, foreign trade has been set up as a central component of the system. Above all, foreign trade has taken a central position in solving the problem of food for local citizens and raw materials for local factories. But it is difficult to conclude that the local economy system in the 1990s achieved the positive results expected. The collapse of the formal economy restricted sources of export, therefore import capability was also weakened. On the contrary, there were results and side-effects that the central government did not intend on nor desire. For example, the autonomy and power of the local party, local government, and local factories have been enhanced. In addition, market economic factors appeared in informal areas. Though limited, decentralization and marketization made good progress in the reorganization process of the local economy system.