Despite the collapse of socialism throughout the world, North Korea has yet to abandon its anachronistic political and economic system, sticking firmly to a totalitarian way of controlling its economy under the catchphrase of "self-reliance". North Ko...
Despite the collapse of socialism throughout the world, North Korea has yet to abandon its anachronistic political and economic system, sticking firmly to a totalitarian way of controlling its economy under the catchphrase of "self-reliance". North Korea's centralized command economic system seemed to be gaining considerable success in the early stages; however, as its economic scale grew larger, it pagan to face various difficulties in coping with the increasing demands in technological and investment sectors.
In the 1990s, North Korea's economy began to register minus growth rates: minus 3.7% in 1990, minus 5.25% in 1991, minus 7.6% in 1992, minus 4.3% in 1993, minus 1.7% in 1994, and minus 1% in 1995.
The problem on the part of North Korea is that it has to struggle to animate its economy on the one hand, and on the other it has to stick to its closed-door policy in order to prevent its Stalinist regime from collapsing. The North Korea ruling hierarchy is still beset by strong worries that once the country is open, it will be the end of the communist regime.
North Korea, in order to solve economic problem, approach the U.S. and Japan.
North Korea has been vigorous to approach the U.S. and japan through government-to-government contacts, while trying to keep its relations with South Korea remain within the framework of nongovernmental exchanges. It is a question whether or not North Korea will benefit from such a two-faced strategy. Currently the South Korean government maintains a basic attitude that such aid can be resumed only when North Korea abandons its hostile attitude against Seoul. Tokyo appears to be willing to offer its rice aid as a leverage to secure favorable conditions in pushing ahead with its policy to improve relations with North Korea; and also Washington is trying to exploite the aid as part of its appeasement policy toward Pyonyang. But recent meeting in Hawaii among South Korea, Japan and United States was reported to have failed to narrow their differences, and then decided to withhold the question of giving additional aid to North Korea, although the United States later on has decided to provide North Korea with $2 million-worth of food aid. Such an unsatisfactory result on the part of North Korea can be attritable to the attitude of the South Korean government.
For North Korea to overcome the food shortage, it must launch large scale rehabilitation projects such as afforestation, river-bottom dredging, and the land improvement plan. No fiems abroad will be interested in such time-consuming projects. If the North intends to lure interested in such time-consuming projects, it has no other choice but to approach the South Korean government. It is no one flse but North Korea which is in an urgent need to seek full-scale economic cooperation with South Korea.