2016년 대북제재 이후 북한경제 변화와 신남북협력 방향 (Changes in the North Korean Economy and Guidelines to New Strategies of Inter-Korean Cooperation after UNSCR since 2016)

In 2010, with the implementation of the May 24th measures, inter-Korean economic cooperation was suspended in all areas except the Kaesong Industrial Complex. Then, in 2016, with the closure of the Kaesong Industrial Complex, all inter-Korean economic cooperation came to a halt. The joint venture enterprises in inter-Korean economic cooperation were mainly concentrated in the Pyongyang region. However, there was a case of inter-Korean economic cooperation in the form of a joint venture enterprise outside the Kaesong Industrial Complex that could be accessed using the entry and exit procedures of the Kaesong Industrial Complex. South-North Equity Joint Venture Enterprise in Kaesong can utilize the industrial, transportation, and transit facilities of the Kaesong Industrial Complex and has the advantage of active participation by North Korea, which holds shares. In the Equity Joint Venture Act, it is necessary to clarify the criteria for setting land usage fees, ease the all-out agreement system, and ensure education for workers. In addition, it is necessary to fairly define subsequent procedures in cases where consultation is impossible. Under the North-South Economic Cooperation Act, it is necessary to simplify the North's project approval process and stipulate that the North should manage its property in good faith, at least to a minimum extent, in special circumstances. The law on the development of inter-Korean relations needs to clearly define the special relationship between North and South Korea and elevate the legal status of the inter-Korean agreements to the level of general treaties. The law on inter-Korean exchange and cooperation should clearly stipulate in writing the procedures for obtaining North Korean visit approvals and for importing and exporting goods, and should minimize the time required for these processes. The agreement on investment protection between North and South Korea should specify in detail the abnormal issues that impede economic cooperation and provide for step-by-step investment protection accordingly. Regarding the agreement on the resolution of commercial disputes between North and South Korea, the follow-up procedures of the agreement should be promptly carried out, and the establishment of a governing law that applies to both North and South Korea is necessary. The inter-Korean agreement went through the legislative approval process outlined in Article 60, Paragraph 1 of the Constitution, thereby establishing its legal validity. However, due to North Korea's non-compliance, it has become practically ineffective. However, as North Korea has not explicitly rejected the validity of the agreement, it is not advisable to disregard the agreement and its provisions in preparation for future inter-Korean cooperation. North Korea has been attempting to improve its external economy through scientific and technological exchanges, economic development zones, and other means since the 2010s. However, the situation has worsened due to North Korea's nuclear tests leading to U.S. sanctions and the impact of COVID-19. Due to COVID-19, there have been zero exchanges of people between North and South Korea for a period of two years starting from 2021. In the current tense situation of strained inter-Korean relations, inter-Korean economic cooperation should be carried out flexibly and adaptively, taking into account the interests of both North and South Korea and contributing to their reunification, in accordance with the dynamics of inter-Korean and international relations.

Why North Korea Chooses Self-Sufficiency: Changes in the North Korean Economy in the First Quarter of 2021

Last orders in Pyongyang

This study addresses whether North Korea–China trade dilutes the effectiveness of the unilateral sanctions imposed by South Korea and Japan, and if so, to what extent and in what way. The structural adjustment of North Koreas export pattern in size and trade type dilutes the effectiveness of the unilateral sanctions imposed by South Korea in particular. South Koreas economic sanctions significantly boost North Koreas exports to China, and the export increase has been substantial to cover the loss from the sanctions. North Korea has increased exports to the Chinese domestic market (by general trade) and those passing through China (by bonded trade). These findings show that North Korea has mitigated the economic damage of sanctions by employing various techniques for trade diversion. Changes occur because incentives for both North Korean regime and foreign firms are expedient particularly after South Koreas sanctions.

This article analyses the impact of economic reform on agricultural sector development. The result indicates there are at least two macroeconomic policy biases towards agriculture: underinvestment and double squeeze. Economic reform through deregulation via the marketbased approach indicates that this would largely benefit the agricultural sector. Monetary policy instruments, such as money supply and exchange rate, and the growth of economy have positive effects on the agricultural sector share in GDP This implies that shifting from import substitution to export promotion industrialization strategy would provide a conducive environment for agriculture development. Furthermore, removal of subsidies and deregulating agricultural sector price would strengthen efforts to increase production and income. Thus, the economic reform, shifting from the tightly-protected to market-based approach, would strengthen the agricultural sector. Economic Reform in Indonesia Due to external shocks, the price of crude oil declined to as low as US$9.75 in 1983 from US$31 per barrel in 1981. As a result, the Indonesian economy lost two sources of growth, that is supply of investment and domestic effective demand. In response to this sudden change Government of Indonesia (GOI) initiated a series of policy reforms (economic reforms). The important reforms or adjustments were: devaluation of the rupiah by 45 per cent to push the so-called non-oil export, a series of deregulations and debureaucratizations in the financial sector (monetary and banking system) followed by various policy adjustments and reforms in the real sectors (Nasution 1995; Tambunan 1989). From 1983 to 1993 GOI issued at least 20 policy packages in the financial sector alone (Nasution 1995). The economic reform in this article is related to changes in the government policy, institutional structure and administrative procedures designed to alter the economic activity and improve the economic performance (Roemer and Redelet 1991). Still in this economic reform, GOI also liberalized the economy through a series of deregulation packages such as lessening government interventions in price controls, quantity restrictions, trade and investment liberalization, changes from nontariff to tariff barriers, etc. The objective of these economic (policy) reforms is essentially to use the market mechanism towards building a competitive market. As Roemer and Redelet (1991) put it, the genesis of the case for economic reform, especially the liberalization agenda (as in the case of Indonesia) is probably close to the neoclassical paradigm of a competitive market. A complete reform package, derived from the Neoclassical paradigm, consists of: (1) freeing markets to determine the price (letting the market work), (2) adjusting controlled price (letting the market work), (3) shifting resources from government into private hands (privatization), (4) rationalizing the role of government (budget rationalization), and (5) reforming institutions to carry out the government's new role. This article, however, is not designed to discuss this neoclassical economic reform type but to make an assessment on how this economic policy reform has affected the agricultural sector. The first part analyses the economic structural changes. Second, it examines the performance of macro and micro policy reform on agricultural sectors. Third and finally it also analyses the weakness of macroeconomic policy reform in the agriculture sector. 1. The Role and Achievement of the Agricultural Sector During the implementation of the import substitution (1970-83) and export promotion strategy (1983-93 up to now) the role and achievement of the agricultural sector in the national economy is remarkable. It cannot be denied that since 1983, the economic deregulation policies, both in monetary and real sectors, have resulted in some positive changes. Among the major achievements are the following: 1. …

Can North Korea implement Chinese-style reform and opening-up policies? This is an important question, directly relevant to the policy debate on North Korea’s nuclear challenges. Through comparative historical analysis, I argue that Pyongyang has failed to adopt the Chinese-style reform and opening-up for the internal and structural restraints. The Chinese experience shows that the economic reform and opening, to be successful, requires a certain degree of political reform and openness to be executed together. North Korea could not implement the economic reform and opening policies as effectively as China did, not because of the external conditions like international sanctions or security threat to the country, but more for the internal contradiction that North Korea’s own economic development is likely to endanger the stability of the political system more rapidly and widely than China has experienced. For this analysis, I rely on North Korea’s published laws and economic policies, previous survey works and scholarly works published in Korean and Chinese.

PurposeThe two East Asian developmental states of Japan and South Korea share very similar familialistic male breadwinner welfare regimes. However, in the recent years, both countries have made significant social policy reforms that are gradually modulating their familialistic male breadwinner welfare regimes. Both countries have extended public support for the family and women by provisioning, regulating, and coordinating childcare, elder care, and work‐family reconciliation programs. At the same time, labour market deregulation reforms have also made employment more insecure, and created greater pressures on women to seek and maintain paid work outside the home. The purpose of this paper is to compare recent social policy reforms in Japan and Korea and discuss their implications for welfare state changes and gender equality. More specifically, it asks whether this signals the end of the old developmental state paradigm and a shift to a more gender equal policy regime.Design/methodology/approachTo answer this question, the paper examines recent social policy reforms in conjunction with economic and labour market policy reforms that have also been introduced since 1990.FindingsThe analysis of social and economic policy reforms in Japan and South Korea shows a combination of both progressive and instrumentalist motivations behind social care expansions in these countries. Social care reforms in both countries were responses to the evident need for more welfare and gender equality determined by the structural and ideational changes that were taking place. But they were also a remodelling of the earlier developmental state policy framework. Indeed, social care expansions were not merely timely family friendly social policies that aimed to address new social risks; they were also important complements to the employment policy reforms that were being introduced at the same time. By investing in the family, the Japanese and Korean governments sought to mobilize women's human capital, encourage higher fertility, and facilitate job creation in social welfare and care services.Originality/valueThis paper shows how Japanese and South Korean developmental states might be changing and remodelling themselves in the recent decades, and how new social policies are evolving in close coordination with economic and labor market policy reforms.

Purpose: This paper examines the directions of effective inter-Korean transportation infrastructure cooperation in terms of securing mutual benefits, such as North Korea's economic development and inter-Korean economic cooperation, avoiding unilateral support from South Korea.
 Research design, data, and methodology: The examination is based on a qualitative research methodology through a literature review.
 Results: Future inter-Korean transportation infrastructure cooperation should be supported through international cooperation and multilateral projects that transcend the differences between North and South Korea in their regimes and economic conditions. Considerations must include regional arrangements, such as industrial, production, and regional development in North Korea, and links with economic development zones; alignment with South Korea's transportation and logistics policy on the Korean Peninsula; and maintenance of ports, railways, and roads, taking into account the topographical characteristics of North Korea and the role required for each stage of development for North Korean industry.
 Conclusions: Unilateral cooperation between North and South Korea based on traditional nationalism has reached its limits. It is time for North and South Korea to focus on internal integration to secure mutual benefits while exploring and implementing ways to attract external support and cooperation from the international community.

In North Korea, female laborers are being marginalized in the heavy industriesand military-centric political and economic policies. As the national patriarchal system works as the power hierarchy even in the family, women are experiencing the limitations of their roles as an assistant. With the deepening economic crisis in North Korea, women are forced to take more responsibility in the family livelihood through private economic activities and bombarded with more role burdens. The structure and current state of higher education in North Korea examined from a feminist perspective in the study involved the common denominators between North and South Korea such as the colonial experiences, division, war, and regime competition and also heterogeneous quality due to differences in the political and economic system and cultural creation between them. That is, both North and South Korea have witnessed the succession of social exclusion not to be ignored in women"s career ambitions and moves including labor as well as higher education for women. There is a need to investigate what implications of the situation would have for North Korea and the integration of North and South Korea and what kind of integration tasks it would demand from higher education. The study analyzed the major issues and structures of higher education in North Korea from a feminist perspective with a focus on the content of science- and technology-based educational reform and looked into the new opportunities and limiting situations offered to women, thus promoting an understanding of the multi-layered framework of exclusion inherent in North Korea.

The North Korean Economy By Nicholas Eberstadt. New Brunswick, New Jersey: Transactions Publishers, 2007, 329 pp, (cloth). ISBN: 978-0-7658-0360-3As the editor of North Korean Review, I know that there are two American economists with the knowledge and experience required to solve the puzzle of this secretive country's economy and the military implications of its economic policies: Marcus Noland of the Institute for International Economics and Nicholas Eberstadt of the American Enterprise Institute. Whether or not readers agree with this book's diagnoses and suggested remedies on North Korean economy, they can surely benefit from considering the clear and energetic presentations in Nicholas Eberstadt's book. In my opinion, anyone who has some interest in Northeast Asia (China, Japan, and Korea) should read The North Korean Economy.This book consists of ten chapters. Chapter i, "Reform, Muddling Through, or Collapse," concludes that numerous small attempts by state planners to liberalize the ailing economy have been completely inadequate to pull the economy out of its nosedive. Eberstadt insists that policy makers must be prepared for the possibility that North Korea will continue to strive to amass an ever-growing nuclear arsenal, even as it gives assurances to the contrary.Chapter 2, "Our Own Style of Statistics: Availability and Reliability of Official Quantitative Data," states that in an age of globalization, North Korean statistical authorities stand in virtually complete isolation from all international counterparts. Apparently, there is scant evidence of any improvement in North Korean statistical output over the years since September 1998, when Kim Jung Il formally assumed state power.Chapter 3, "International Trade in Capital Goods, 1970 to 1995," examines the North Korean international trade in "capital goods"; that is to say, machinery, equipment, the manufactured parts used as capital stock in the production process. Eberstadt thinks that the ratio of capital goods to gross domestic capital formation in the North Korean economy during the 1980s and 1990s may have been lowest in the world.Chapter 4, "Interlocking Crisis in Food, Energy, and Transport Equipment: Indications from Mirror Statistics," analyzes North Korea's trends in three sectors of strategic significance to the entire North Korean economy: food, energy, and transport. This chapter states that Pyongyang appears to be pursuing an "aid-based" solution to its food and energy crises, the same one that has been used by the country for half a century.Chapter 5, "Socioeconomic Development in Divided Korea: A Tale of Two Strategies," presents a comparative economic analysis of the two Koreas. Ever since the Korean War, the two rival governments have pursued two different strategies in their economic policies: a highly centralized economic system by North Korea and a government-directed capitalism by South Korea. Some fifty years after the Korean War, South Korea defeated North Korea economically. The only question remaining is whether victory will eventually eradicate North Korea or prompt it to reconstruct itself as a modern state compatible with the economic and strategic realities of Northeast Asia. …

IntroductionNorth Korea has been in the headlines with increasing frequency lately thanks mainly to the nuclear standoff with the United States, natural disasters, or famines. Although overshadowed by these events, what is quietly taking place in North Korea and is of much greater long-term importance to the people of North Korea are the economic reforms that have been under way since July 1, 2002.Opinions are divided on the prospects for the reforms' success. Some believe that the current reforms are merely a desperate attempt on the part of the current regime to salvage the central planning that has been rendered unworkable due to the economic collapse brought about by the withdrawal of economic aid and favorable trade terms by the former Soviet Union, followed by a string of natural disasters in the 1990s. They believe that the regime will revert back to the predominantly commanddriven economy once the economy recovers from its current illness (Klingner, 2004). Others believe that the current reforms are similar in essence to the Liberman-style reforms attempted unsuccessfully in the Soviet Union and its Central and East European satellite countries in the 1960s and 1970s, and hence are not likely to work in North Korea. Seliger (2005), for example, points out that the present economic structure of North Korea in terms of degree of industrialization is closer to those of the Soviet Union and its European satellites of the 1960s and 1970s than that of China of the 1970s or Vietnam of the 1980s, and the Chinese and Vietnamese reform experiences are not an appropriate comparison. Seliger also points out correctly that the agricultural reform in North Korea does not go as far as the Chinese model. Others, including myself, are more optimistic about the chances of success of the current North Korean economic reforms, although the optimism must in all practicality be based on the premise that the current nuclear standoff with the United States will be satisfactorily resolved.I attempt in this paper to analyze and assess the significance of current economic reforms in North Korea and their prospects for success in light of the country's history of an open-door policy and economic reform attempts, as well as the current geopolitical and economic climate of Northeast Asia. The conclusion I derive is that the prospects for success of the current economic reforms in North Korea are far better than the pessimists would like us to believe. The paper consists of five sections. The first section presents a historical overview of the North Korean macroeconomic performance and North Korea's open-door policy attempts prior to July 1, 2002. The second section is a brief description of the July 2002 economic reforms and the subsequent follow-up measures. Lessons from the economic reform experiences of other socialist economies are discussed in the third section. The fourth section addresses the prospects for success of the current North Korean economic reforms. The last section offers conclusions.A Brief Historical Overview of the North Korean Macroeconomic Performance and Pre-July 2002 Open-Door Policy AttemptsNorth Korea emerged from the end of World War II and the end of Japanese occupation as a predominantly industrialized economy. North Korea's economic growth was remarkable: it surpassed that of South Korea during the initial period after the war and registered positive growth throughout the 1970s. By the end of the 1970s, however, the North Korean economy was beginning to show serious problems typical of all centrally planned economies, manifested in serious inefficiencies due to lack of incentives and difficulties of planning coordination. The collapse of the former Soviet empire in 1991 dealt a serious blow to the North Korean economy, which had been depending on the Soviet Union to meet much of its energy and raw materials needs on favorable terms, and on the Soviet bloc countries for an export market. …

This study focuses on an analysis of North Korea's external economic policy changes, and the present status and distinctive features of inter-Korean economic cooperation. North Korea is in a dilemma situation between the necessity of renewing its economic development strategy and the risk of weakening the basic principles of its system by an economic opening policy. In any case, North Korea is least expected to launch into an all-out external economic opening, but it will rather adopt, if at all, a policy of a “system-defending opening” than a “reform-oriented opening.” As a result, inter-Korean economic exchanges and cooperation also will be developed within the category of such a limited opening.

The collapse of the Soviet Union in 1990, consecutive floods in 1995-1996 and a severe drought in 1997 caused the North Korean economy to shrink, becoming abysmal by the end of the 1990s. North Korea's foreign trade followed the same path as its overall economic trend. The volume of foreign trade declined 60 percent from a peak year of $4.9 billion in 1988 to $2.0 billion in 2000. However, recently the trend has been reversing with an average annual increase of 10 percent since 2000. This paper identifies the four key problems of North Korea's foreign trade: chronic trade deficits, a limited number of trading partners, the increasing role of the inter-Korea trade and Chinese interest in the North Korean market.IntroductionNorth Korea has long been portrayed as an autarkic society governed by an absolute ruling ideology called juche, a concept of autonomy and self-suffeciency that leads to a belief that Korea should be free from any foreign intervention. North Korea's economy prominently applies the ideology of juche under three principles. First, all means of production are owned solely by the state and cooperative organizations. Second, the state formulates unified and detailed plans to guarantee a high rate of production growth and balanced development of the national economy. Third, socialist production relations are based on the foundation of an independent national economy. Under the juche principle, North Korea's foreign trade has amounted to only about i0 percent of its Gross National Product (GNP) for years, far below that of most other economies.North Korea has been secluded from the Western world, but the country has recently initiated a policy of internal reform and external engagement. The greatest contribution that Japan, South Korea and the United States could make in order to achieve durable peace and stability on the Korean peninsula would be to normalize economic relations with North Korea and enter into an extensive program of engagement.After the collapse of the Berlin Wall in i989, even optimistic diplomats predicted only seven years at the most before the demise of North Korea (Clifford, 2002). These predictions were partially true for economic collapse, but not for political sustenance. No one knows for sure how many North Koreans died from food shortages in the i990s, because North Korea is a police state that restricts most reporters and relief workers. However, the United Nations' World Food Program estimates that more than one million people have been killed by famine (Fairclough, 2005). Many children went unfed or underfed. Malnutrition has been blamed for the stunted growth of children in North Korea, where seven-year-olds are seven centimeters shorter and weigh i0 kilograms less than children of the same age group in South Korea (Lee, 2002 b). Thirty-seven percent of North Korean children are malnourished as are a third of mothers.North Korea issues no consistent macroeconomic statistics, making it impossible to gain an accurate picture of its economy. However, the Bank of Korea estimates that North Korea lost almost half of its GNP and 70 percent of its foreign trade from i990 to i998 as the country's economy contracted and its trade relations with former communist countries dwindled. North Korean factories are estimated to have operated at no more than 25 percent of capacity in the i990s (Oh and Hassig, 2000). The health care system virtually ceased to operate. Food shortages became the most pressing economic problem.The North Korean economy finally turned around in i999. The Bank of Korea estimates that the North Korean economy grew by 6.2 percent in i999, i.3 percent in 2000, 3.7 percent in 200i, i.2 percent in 2002, i.8 percent in 2003, and 2.2 percent in 2004, after experiencing nine successive years of negative growth. In particular, North Korean grain output recorded gains, and its import volume has expanded rapidly during the last few years. …

North Korea’s policy of opening can be viewed as a product of the trade-off between economic efficiency and systemic stability. Historically, the policy has aimed at securing foreign exchange earnings by opening specified areas without allowing any significant challenges to the regime. To the disappointment of leaders in Pyongyang, much of these efforts have born little fruit. However, inter-Korean economic cooperation—one important element of the opening policy—has consistently expanded. With this, inter-Korean trade has increased, fostering greater mutual dependency. Yet from an economic standpoint, such cooperation appears less attractive for South Korea. And despite the few suggested benefits for engaging in inter-Korean economic cooperation projects, prospects for further opening in North Korea hold limited optimism, as the North is expected to continue to pursue a policy of “quarantined, belated opening without real reform.” This article aims to provide a review of North Korea’s past and present opening policies, emphasizing the situation where North Korea was unable to follow a line of gradual opening as seen in China or Vietnam. It is this special factor that has prevented North Korea from reaping greater gains from the opening process.

IntroductionNorth Korea has implemented several economic reform policies to overcome its economic difficulties since i990. These ecomonic reform policies include a series of news about opening of General Market (where all agricultural and indus- trial products were allowed to be traded) and the 7.i Economic Measures announced in July, 2002. In addition, new policies about currency reform, wage increase, and official price abolition have been forecasted.With these changes of North Korea in mind, this paper aims to analyze development mechanism of economic policies implemented in North Korea since i990, to evaluate those policies, and to forecast prospects for them. In this paper, developments of economic policies in North Korea are analyzed on basis of price because, theoretically, price implies limitations in economic principles of socialist countries and inevitability of reform. Actually, introducing economic measures dealing with price is major part of economic reforms in North Korea since i990.By using price variables, this paper analyzes shortage of daily necessities, expansion of market economy, and attempts for properly functioning planned economy in North Korea. If supply shortage persists while official price stays at a low level, black markets are usually formed. As gap between official price and market price is widening, centrally planned economy becomes contracted and is being put into confusion. In response to this situation, North Korean government had to take some actions including price marking to market to improve its dire economic situation. This is basic logic of analysis in this paper. Through this analysis, this paper proves: even though it is true that some changes of economic policies in North Korea were to be stemmed from will of or ability of political leaders, they were to be implemented by logical inevitability which was fundamentally inherent in economic structure of North Korea.The Pricing Mechanism and Economic Reform in Socialist CountriesThe barometer of evaluation for an economic situation in socialist countries is currency, i.e. price, same as capitalist countries. In socialist countries price is artificially decided by government whereas in capitalist countries it is determined by market. Artificial price-setting is inherently problematic because it is difficult to measure qualitatively different labor and to transform it into price in an objective manner. Moreover, policy of intentionally keeping price low for mass consumer products in order to fairly distribute scarce goods brings about price distortions. Ideologically, it represents superiority of socialism as a way of fair distribution but in reality it reveals problems of shortage of mass consumer products.In a socialist economy, insufficient supply is caused by inherent inefficiency and artificial price-setting brings about side effects due to price distortions. If already insufficient supply becomes worse, black markets are formed and, in some markets, transactions will be settled at a very expensive black market price. This can be simplified in one diagram in Figure i.When it is assumed that supply curve is vertical and demand curve slopes downward to right in socialist countries, price and quantity of supply are fixed at Pi and Q2 respectively because of low-price principle of government (or rationing system) but quantity of demand becomes Qi and it brings about excess demand of Qi-Q2. Then, this excess demand inevitably forces lineups and provides an opportunity to form black markets. When there is excess demand, people are willing to purchase goods at a higher price and when transactions are settled in response to this demand, black markets are formed. Then, price of black markets becomes P2.When such a shortage of supply lasts for a long time, private business tions become and more widened while double pricing, i. …