North Korea's 7.1 policy

Abstract

This thesis evaluates North Koreas July 2002 economic reforms. It does so by analyzing the content of the reforms, their economic impact on North Korean people, and the problem areas of the reforms. This thesis makes five arguments. First, the July 2002 economic reforms were not intended to reform North Koreas economic system but to provide temporary relief for the regimes survival. Second, unless the problems in monetization and decentralization in the industrial and agricultural sectors are eliminated, the economic development effort is doomed to fail. Furthermore, if Pyongyang solves international, administrative and infrastructural problems within Special Economic Zones, it can spur economic development in the country. Third, the growing economic interdependence may help to leverage upon North Korea. Fourth, North Koreas current political system forms the biggest obstacle for present and future reforms. Finally, for the U.S. and international sanctions to have more effective impact, there should be a consensus on them and the subsiding effect of other countries should be avoided. In conclusion, the thesis makes policy recommendations and extracts overall lessons for international policy makers, economic leaders, and diplomats that can be applied to this and other cases.