NAME
PROFESSOR
DATE
North Korea Economic Development.
Introduction
The Democratic People's Republic of Korea (North Korea) located in East Asia in the Norther half of Korea Peninsula. After the end of the Korean War, The Democratic People's Republic of Korea was able to reconstruct and industrialize its economy. The country gave priority to the construction and development of heavy industries. The economic development of The Democratic People's Republic of Korea was based on planned basis until the late 1980s when the Soviet model of economic development developed problems. Unlike other countries, the North Korea regime refuse to open its economy to other countries to facilitate liberalization and economic management (Park, 2006). The consequences …show more content…
In spite of the devastating Korean War, North Korea's underlying industrialization was amazing. The natural endowment, the Soviet economic model and the ideology of self-reliance propelled North Korea towards economic growth and self-reliant industrialization. After the Korean War, North Korea put emphasis on heavy industries including the chemical steel, iron, steel, and machines. The heavy industrialization led to increasing in output and exports to the Middle East (Hwang, 2003). Due to the world recession, oil shock and declining export prices, North Korea started to experience an economic crisis. In the 1980s, the North Korean economy started to show signs of instability of the planned economy. Shortages could be experienced in almost every sector of the economy. There was a shortage in supply of raw materials, energy and hard currency to the industries. With years of struggle, the infrastructure and machine became absolute, still the North Korean government insisted on planned economy and declined to liberalize its economy management.
The North Korean economic growth stagnation turned into a crisis in the 1990s when the economic support it was receiving from former USSR and China was withdrawn. In 1994, China reduced its exports to North Korea, which was a major blow to North Korea economic …show more content…
The inflation rate averaged 551.36% from 2010 to 2013, reaching the highest point of 4376% in 2010 and a record low of 30% in 2012. Chart 5 shows the current inflation rate in North Korea. According to the classical economic theory or the liberal economics market functions best when there is minimal interference from the government. The North Korean economy is one of the heavily state regulated economy in the world (Korea, 2003). The state determines wages and the price of goods and services. Perhaps the centralization of the economy is the reason of persistent high inflation in the
PROFESSOR
DATE
North Korea Economic Development.
Introduction
The Democratic People's Republic of Korea (North Korea) located in East Asia in the Norther half of Korea Peninsula. After the end of the Korean War, The Democratic People's Republic of Korea was able to reconstruct and industrialize its economy. The country gave priority to the construction and development of heavy industries. The economic development of The Democratic People's Republic of Korea was based on planned basis until the late 1980s when the Soviet model of economic development developed problems. Unlike other countries, the North Korea regime refuse to open its economy to other countries to facilitate liberalization and economic management (Park, 2006). The consequences …show more content…
In spite of the devastating Korean War, North Korea's underlying industrialization was amazing. The natural endowment, the Soviet economic model and the ideology of self-reliance propelled North Korea towards economic growth and self-reliant industrialization. After the Korean War, North Korea put emphasis on heavy industries including the chemical steel, iron, steel, and machines. The heavy industrialization led to increasing in output and exports to the Middle East (Hwang, 2003). Due to the world recession, oil shock and declining export prices, North Korea started to experience an economic crisis. In the 1980s, the North Korean economy started to show signs of instability of the planned economy. Shortages could be experienced in almost every sector of the economy. There was a shortage in supply of raw materials, energy and hard currency to the industries. With years of struggle, the infrastructure and machine became absolute, still the North Korean government insisted on planned economy and declined to liberalize its economy management.
The North Korean economic growth stagnation turned into a crisis in the 1990s when the economic support it was receiving from former USSR and China was withdrawn. In 1994, China reduced its exports to North Korea, which was a major blow to North Korea economic …show more content…
The inflation rate averaged 551.36% from 2010 to 2013, reaching the highest point of 4376% in 2010 and a record low of 30% in 2012. Chart 5 shows the current inflation rate in North Korea. According to the classical economic theory or the liberal economics market functions best when there is minimal interference from the government. The North Korean economy is one of the heavily state regulated economy in the world (Korea, 2003). The state determines wages and the price of goods and services. Perhaps the centralization of the economy is the reason of persistent high inflation in the