The North Korean Economy Explained

All modern-day nations’ economies are held together by a set of economic laws that originated in their past. Examples of these past economic laws include not taking opportunities of industrialization, the fear of industrialization or even the nation’s authoritative system stopping this industrialization or modernization. North Korea’s economy has been taking an extreme downward toll, but it is because of its authoritative system from the past which causes this.

The First to be Ahead is the First to be Behind

In the 1970s, after the Korean War ended, North Koreans seemed to be more successful and doing better than South Koreans. But given North Korea’s financial crisis today, what happened? After the Korean War, Kim Il-sung, the leader at the time, changed North Korea’s society to Juche, a political idea referring to “independence” and “self-reliance.” All private businesses were then owned by the North Korean state. Kim Il-sung then took over the media and restricted international travel. He introduced a social hierarchy called the Songbun system, which is still in use today. Free-speech was banned and was punishable by death or arrest. Finally, the government encouraged people to report anyone who broke the rules, so everyone became distrusting of one another.

The Beginning to Economic Hardship

During this time, North Korea was highly dependent on trade from the Soviet Bloc, so when their economy began to decline, North Korea’s did too. Unsuccessful crop fields bore little food due to terrible weather and agricultural methods. As the economy got exponentially worse, North Korea no longer had any allies to help regain its composure as a country. The economy only got worse from there, with 5% of the population dying from starvation. The need for food caused the North Koreans to be driven away from the nation’s control, especially when the government stopped giving out food. Citizens would obtain food in any way they could, whether that be buying from illegal markets or committing crimes. Many others tried to flee to other, more prosperous countries. 

A Bright Future?

In late 2009, a reform was put in place to wipe out all private wealth.  All of the citizens' well-deserved progress and success was wiped away. The hatred towards the regime rose to new levels. Finally, by December of 2011, Kim Jong-un, the current-day leader of North Korea, tried harder to implement some harsh laws, however he did downgrade some laws of the markets, knowing how important they were.

As we have seen, North Korea’s government has caused a downward toll in their economy. If things were just a bit different, it could have been a more prosperous nation today. Although, North Korea has the chance to become a more successful country, especially with the more reasonable laws with the market being put into place. It still has that opportunity because North Korea’s story is far from over. Even with this nation’s past, there is still hope leading it to a brighter future.