North Korea's economic reform direction, following Vietnam's DoimerI

A photograph highlighting the appearance of the Vietnam Communist Party convention (above) and the policy of opening up of Deng Sopyeong.

The Hyundai Economic Research Institute released a report titled " Vietnam's reform and openness has implications for North Korea, " saying, " North Korea's new economic construction lines could be similar to those adopted by Vietnam. " In 1986, Vietnam introduced the Doimoi policy with the aim of introducing a capitalist market economy while maintaining its one-party dictatorship. Doimoi and DoI, which means " change, " are a combination of the words " live, " meaning reform. The bill includes both domestic economic reform and external opening from a comprehensive and long-term perspective. Thanks to this, Vietnam's economic growth rate has grown rapidly. The GDP growth rate, which stood at only 2.8 percent in 1986, rose to 3.6 percent in 1995. It dropped to 4.8 percent in 1997 after the Asian financial crisis, but has recovered to the level of five to seven percent in the last ten years. As of 2016, its GDP growth rate in Vietnam was 6.2 % and it has remained in the 6 % range for the past three years.

According to the Doimoy policy, Vietnam declared trade liberalization by approving foreign trade by manufacturing companies in 1987, and began to make inroads into the market economy by lifting restrictions on the size of private companies and allowing free employment. North Korea also has a market economy centered around a marketplace, but its economic level is significantly lower compared to Vietnam, which conducted a complete transformation of its economic system. According to the Bank of Korea, the North's economic growth rate has improved slightly since 1998, but has not exceeded the 1 percent level since 2000.

The figure reached 3.9 percent in 2016, but some point out that it has been inflated considering per capita income (GNI), foreign direct investment (FDI), and the size of foreign trade. There is also a question of reliability as North Korea's economic growth rate is growing at a high rate every year.

As of 2016, North Korea's foreign direct investment amounted to 90 million dollars, 0.7 percent of Vietnam's 126 billion dollars. The trade volume is also 6.03 billion dollars, less than 2 percent of Vietnam's 353.8 billion dollars. Vietnam's per capita GNI is $ 20-60, double that of North Korea ($ 1258).

Hyundai Economic Research Institute suggested that North Korea should create light industry industrial complexes based on Vietnam cases and realize its new economic map on the Korean Peninsula with an open policy centered on special zones. In particular, it stressed that the government should foster the area as a major export destination with an emphasis on promoting the existing Gaesong Industrial Complex.

" We should first adopt a policy of promoting light industry in Vietnam, and strengthen our export competitiveness by addressing the shortage of necessities in North Korea, " said Lee Hae-jeong, a researcher at Hyundai Economic Research Institute.

Source : http://www.dt.co.kr/contents.html?article_no=2018061302109958053001