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Strategies for Restructuring North Korea's State-owned Enterprises after the Unification of the Korean Peninsula

  • Korean Society and Public Administration
  • Abbr : KSPA
  • 2018, 28(4), pp.201-235
  • Publisher : Seoul Association For Public Administration
  • Research Area : Social Science > Public Administration

Park, Sauk-Hee 1 Cho Kang Joo 2 Jang Ikhyun 3 IN SEOG JORN 4

1가톨릭대학교
2선문대학교 정부간관계연구소
3서울연구원
4한국문화정책연구원

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ABSTRACT

The institutional design of state-owned Enterprise(SOE) system in North Korea is based on the '7・1 economic management reform action' in 2002. The 2002 reform indicates reduction in roles of the party and enhancement of effective management systems in the business sector. However, the management system of SOEs in North Korea is not still separated from the party politics, and management process is strongly controlled by the party and the government. Therefore, social overhead capital in North Korea, such as electricity, railway and highway, suffers from the continuing lack of investment and inefficient management system. In the meantime, the productivity of SOEs is very low due to the lack of both investment in production facilities and supply of resources. In this context, this study discusses strategies for the expansion of social overhead capital and the promotion of industrialization by reforms of SOEs in North Korea. In doing so, it analyses the current situation of social overhead capital and SOEs by industrial sector in North Korea, and draws policy implications from the experiences of transition countries. Also it reviews the characteristics of recent economic reforms in North Korea and diagnoses problems of economic cooperation between the South and the North, and discusses the importance of the role of South Korea’s SOEs to integrate South and North Korea’s economy. Consequently, this study proposes plans for the expansion of social overhead capital, the privatization and structural reform of SOEs in North Korea.

Citation status

* References for papers published after 2022 are currently being built.

This paper was written with support from the National Research Foundation of Korea.