The Direction of the North Korean Economy - Essay Example

The United States Bureau of East Asian and Pacific Affairs the GDP (Gross Domestic Product) of North Korea is 24.8 Billion U.S. Dollars which works out to a Per capita GDP of approximately $1,800. However, I expressly stated that these are merely estimates based on incomplete data.

With this incomplete data in hand, one can draw a few conclusions. Firstly the economy trades primarily in raw materials such as mining products, agriculture, and fisheries. Secondly, the company spends a tremendous amount of money on military expenditures which not only is a direct draw on state financial resources (Which could also be directed towards economic development) but it also removes a significant number of people who could spend their time performing more economically valuable activities.

However, the article went on to argue that the government implemented policies that greatly restricted the freedoms of these markets because of a perceived lack of control over these forces. It was argued by Sang-Hun (2009) that this specific action represents a kind of ‘shock therapy’ to crack down on black market trading that undermines the control of the government. The specific action was the state introduction of a new form of currency and allowing people to only exchange between 100,000-150,000 Old won for the new one which is the equivalent of between officially $690 and $35 on the black market. This would greatly reduce the wealth that an individual would be able to accumulate. As one could guess, this caused a great deal of chaos in the country as people scrambled to transfer as much money as possible before the banks shut down trading in the old.

What resulted from this action is that people began to push back by briefly rioting and doing everything they could to pressure the government to relax these measures. In a way, this does represent a kind of weakening of the state control of the economy. However, it should be stated that even with these concessions in hand the government does continue to control its economy a great deal more than probably any other nation. Read More