North Korea Inching Slowly Towards Market Economy

North Korea will reportedly introduce diverse market economy institutions. In the future, North Korean companies can sell products manufactured in excess of their government-ordered shares.

In addition, foreign-invested North Korean enterprises will be allowed to sell directly to the North Korean people up to a certain limit.

Previously, the North Korean regime allowed for the establishment of markets and sale of products. This is the first time for the regime to officially confirm its market economy policies permitting business entities to produce items for sale and opening its domestic market to foreign companies.

A visiting pro-North Korea naturalized Japanese scholar Kang Il-chun confirmed yesterday that "North Korean citizens and companies will legally be allowed to exchange goods and services on the market." Therefore, North Korean companies will be able to make profit through competition in the future.

Kang is a renowned North Korean expert, who taught at a North Korean university and has been to North Korea sixteen times on state visits.

"The new policy is the first substantial step for the North towards the market economy system,” said a South Korean intelligence official. “We are closely monitoring all dramatic economic changes in the North."

Yang Moo-soo, a Kyungnam University professor specializing in North Korea, said: "North Korea is initiating an economic revolution, not just an improvement."

Foreign-invested North Korean companies can now directly set up their retail stores and solicit customers. In the past, they had to sell their products only at designated government stores.

Suk-Ho Shin Young-Sik Kim kyle@donga.com spear@donga.com