The objectives of the study is to analyse whether the establishment by law of joint venture will cause economic reforms in North Korea.
The Soviet union adopted the method of planning in resource allocation in 1980s. After the Second world War, the c...
The objectives of the study is to analyse whether the establishment by law of joint venture will cause economic reforms in North Korea.
The Soviet union adopted the method of planning in resource allocation in 1980s. After the Second world War, the countries of eastern europe introduced the method of planning what is called Stalin's Model. China also adopted it in the early 1950s. Its methods are characterized by one-sided emphasis on centrallizatage and unifications. However, in the more developed of the socialist countries, the disadvantage of the system soon assumed importance. With the multiplicity of objectives and the growing complexity of objectives and the growing complexity of manufacturing industry, the task of centrally directing the National economy without the use of prices in resource allocation became increasingly difficult.
Since the late 1960s, the economic reforms in the socialist countries have been continued. Communist China carried out more economic reforms in the latter half of 1970s. And then the socialist countries introduced the opening of foreign economic policy.
But North Korea, which adopted the method of planning, did not carry out the economic reforms. On the other hand, North Korea eatablished the law of introduction of foreign capital and technoligy in 1984. I think this means the trasformation of closed economy into open economy. This contributed to political problems which included adverse reaction incurred by economic reforms. Polilical problems imply the power heritage to Kim Jongil, power structure and so on.
Therefore, North Korea has expanded the opening of economy without the economic reforms after the establishment by law of joint venture in 1984. An enlargement of the opening of economy will eventually by obliged to reform the existing method of planning.