The current crisis is the crisis of capitalism. The countries, where the free market is unthinkable per se, do not suffer from the world crisis much. North Korea, for example, may not even know that the whole world is in the middle of the economic crisis. On the other hand, any crisis pales in comparison with the economic condition in which this country lives permanently.
The storm of the financial crisis has engulfed nearly the whole world, the whole capitalist world. What is happening in the “parallel world,” that still lives under socialism? North Korea seems to be an especially interesting country for analysis at this point. This country is isolated from the rest of the world and is not subjected to any influence from the outside.
North Korea, or the Democratic People’s Republic of Korea, most likely does not suffer from the world financial crisis, because it lives under the conditions of its own permanent crisis.
Marina Trigubenko of the Institute for Economics of the Russian Academy of Sciences told Bigness.ru that North Korean conducted a series of market-oriented economic reforms at the end of the 1990s. The country particularly loosened up the condition of the private sector, and introduced elements of economic accountability. All of those reforms were conducted under the rule of Kim Il-sung and were continued under his son, Kim Jong-il.
The economic situation in North Korea, which is seriously undermined by home problems, Kim Il-sung’s death and the collapse of the socialist camp, began to improve after North Korea took efforts to normalize its ties with South Korea and the international community. South and North Korea launched cooperation on the Kaesong Industrial Complex and began working on the project of the trans-Korean international highway.
The country suddenly changed its political and economic orientation last year. “The markets were closed again, the restricted access to the Internet was blocked entirely, the government introduced the distribution of foodstuffs and established strict control over prices nationwide,” the expert said. “The reasons for that could be different. The North Korean leadership was probably disappointed in the results of the economic reforms. The nation’s state sector was privatized in favor of the political leadership during the period of reforms in the country. Kim Jong-il’s oligarchic regime has no analogue anywhere else in the world,” she added.
One shall also mention the recent rumors about the disease and even the death of the 67-year-old NKorean leader. “If Kim Jong-il were alive and healthy, he would be on better terms with the international community. Nowadays, it is only the United States that can exert influence on North Korea,” Trigubenko said.
The current economic condition of North Korea is characterized with social stratification. Abject poverty and high death rates of the population blend with the luxury lifestyle of the powers-that-be. Korea is rich with mineral resources which include gold and uranium.
North Korea does not suffer from the world economic crisis indeed. There are no market institutions in the country, no joint-stock companies and no stock markets. In addition, North Korea is practically a self-sufficient nation. It is not the world crisis, but bad harvests that can seriously affect the NKorean economy.