North Koreas economic policy since 1990 can be divided in five periods: in the first period, between 1991 and 1993, though the radical economic policy of the past became more moderate, the plan system began to crumble; the second period between 1994-1...
North Koreas economic policy since 1990 can be divided in five periods: in the first period, between 1991 and 1993, though the radical economic policy of the past became more moderate, the plan system began to crumble; the second period between 1994-1997 was officially called buffer period, in which the priority was set on the three sectors agriculture, trade and light industry, but the centrally planned economy already had largely collapsed. In the third period between 1998-2000, the traditional strategy of development was reinstated and North Korea attempted to reconstruct the old planning system. In the fourth period from 2001 to July, 2002, it has tried to normalize and improve the operation of the planning system and in the fifth period, since July, 2002, with the partial introduction of reform, new problems have arisen. In the context of economic changes in the 1990s, the July, 2002, measures have been simply to legalize what had already been reality since ten years. Because of economic hardship and lack of resources, the state has lost the capacity to manage the economy on the principles of a command economy since 1993. The North Korean economy had been already decentralized, monetized, and could not subsidize any more daily necessities of the people and maintain a sufficient rationing system since that time. So, the July measures have been rather passive adjustment than active reform. Now, because of the weakened status of the economy, the state can not any more reverse the already implemented measures.