North Korea THE ECONOMY
Flying horse, symbol of the Ch'llima production drives of the
late 1950s; the slogans proclaim self-reliance and three
revolutions.
THE DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA (DPRK, or North
Korea)
possesses extensive economic resources with which to build a
modern economy. These include sizable deposits of coal, other
minerals, and nonferrous metals. The river systems of the Yalu,
Tumen, and Taedong, and lesser rivers supplement North Korea's
coal reserves and form an abundant source of power. Although the
mountainous terrain prohibits paddy rice cultivation except in
the coastal lowlands, corn, wheat, and soybeans grow well on dry
field plateaus. The country's hilly areas also provide for timber
forests, livestock grazing, and orchards.
North Korea inherited the basic infrastructure of a modern
economy at the end of the Japanese colonial era (1910-45) and
achieved considerable success because of the ability of the
communist regime to marshall unutilized resources and idle labor
and to impose a low rate of consumption. Around the beginning of
the 1960s, however, the economy had reached a stage where delays
and bottlenecks began to emerge. Once growth could be achieved
only by raising productivity through increased efficiency, an
expanded resource base, and technological advances, slowdowns and
setbacks occurred. Slow economic growth continued into the 1970s
and 1980s. Based on
chuch'e (see Glossary),
the self-reliant economic policy emphasizes heavy industry. This policy,
coupled with economic difficulties, has resulted in a poor record
of exports, chronic trade deficits, and a sizable foreign debt,
as well as foreign trade primarily oriented toward other
communist countries. At the outset of the 1990s, North Korea's
economy was in a deep slump and in great disarray, and was
hopelessly behind its rival, the Republic of Korea (ROK, or South
Korea), which has become a world-class economic powerhouse.
North Korea's economy remains one of the world's last
centrally planned systems. The role of market allocation is
sharply limited--mainly in the rural sector where peasants sell
produce from small private plots. There are almost no small
businesses. Although there have been scattered and limited
attempts at decentralization, as of mid-1993, P'yongyang's basic
adherence to a rigid command economy continues, as does its
reliance on fundamentally non-pecuniary incentives. A North
Korean decision to create Chinese-style special economic zones
represents a major breakthrough in decentralizing the economy.
As the country faces the 1990s, great challenges lie ahead.
The collapse of communist regimes, particularly North Korea's
principal benefactor, the Soviet Union, have forced the already
depressed North Korean economy to fundamentally realign its
foreign economic relations. Economic exchanges with South Korea
have even begun in earnest.
Data as of June 1993
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