28 2004 pp. 145 159 1 Received October 29, 2004 In 1999, North Korea reversed the negative economic growth of the 90s, and displayed a positive trend which, although weak, was maintained at 1.8% in 2003. After the death of Kim Il Sung in 1994, however, North Korea was hit by severe economical and political crises under the Arduous March strategy of his successor, General Secretary Kim Jong Il. Of particular interest are the new economic adjustment measures that were implemented on July 1st, 2002, to resolve these crises. These measures consist of diverse policies such as: 1. Abolishment of the food distribution system, 2. Raising of wages and commodity prices, 3. Expansion of private enterprise profitability and 4. Devaluation of the won. It is an application of the North Korean style of Materialisic socialism, that can be described as Economic management that allows for the biggest possible profit while firmly protecting the principles of socialism, and reflects General Secretary Kim Jong Il s New Thought proposal. This appears to be a long-awaited step towards the switch from a planned to a market economy, a change that has already occurred in China and Vietnam. Nevertheless, reform cannot take place in earnest without changes to the current autocratic political regime. In order for North Korea to break out from its serious economic crisis, it must first resolve current international issues such as its development of nuclear weapons and abduction of Japanese citizens. Only then can it obtain funds from the West that are necessary to kickstart the fusion of a market economy system into the planned economy. An economic recovery is not impossible, however ultimately it depends on the political power of Kim Jong Il and how much he is able to withstand. 145
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