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Analysis on the Markets of North Korea

Author Seog-ki Lee et al. Date 2014.12.29 Page 315

Due to weakening of planned economy and development of marketization since the 1990’s, the North Korea’s economic system of 2010 now can no longer be seen as ‘planned economy’. Alternatively, it should be viewed as ‘transitional economy’ that is in a mutual combination of the planned and market economies. Overall studies on the North Korea’s marketization have been performed numerously. But, individual market research that can be the foundation of
these studies is relatively unprecedented, and the analysis and understanding level of each market is uneven. Taking these issues into account, this study aims for specific and comprehensive analysis of North Korea’s individual markets.

First, it analyzes development processes, existing forms, suppliers, consumers, and transaction methods of each market including markets of consumer goods, services, real estate, finance, and labour. Then, it examines the causes and limitations of each market and analyzes the effects of its development on the North Korean economy and the corresponding government’s response.

The study confirms that the marketization has been almost completely developed in the sectors of consumer goods and services; the planned supply of consumer goods and services is rather exceptional. It also verifies that the country is in progress of extensive marketization
in the sectors of real estate, private financing, and labour. But, the pace of marketization in the sectors of private financing and labour market is much slower compared to that in the sectors of consumer goods and services. Unlike stable operation in the sectors of consumer goods and services with minimal legal and institutional supports, commercial activities in the fields of private financing and labour market are strictly controlled.

Finally, based on the analysis of these individual markets, this study comprehensively reviews the effects of marketization on the North Korean economy.