Thursday, February 4, 2010
N. Korea May Be Easing
This article talks about signs that North Korea may be relaxing on some of their anti private market regulations. It would appear as though the country is allowing for some selling of goods, although these reports are unconfirmed. North Korea cracked down on laws prohibiting private markets in the past in favor of a complete centrally planned economy. Part of this included not allowing the sale of food outside of the government's ration. While other factors persist, it appears that the demand for food has been a huge problem (the government has been under providing). This is an interesting example of the ways in which centrally planned economies have failed and what system to use.
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3 comments:
This is good news for a country where up to half of the population is malnourished and millions starve. North Korea's transition to a market economy would not just help its people, but also those of neighboring countries as the country is fertile and has resources capable of developing itself comparable to South Korea.
Perhaps in this loosening of regulatoin and allowing a more laissez-faire system, North Korea will also become a more open economy. This would allow newer technologies and market strategies to be incorporated into North Korea's economy. The benefits of increased competition could allow North Korea to become a larger and more influential force in the world economy.
Usually in command economies, the efficient outcome may not be achieved and hence it would be beneficial for N. Korea to move towards a market economy where the forces of demand and supply determine output.
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