A new North Korean publication has confirmed what has been rumored for some time: that markets are integral to the country’s official exchange rates. In any other country this would be the first sentence in a beginner’s textbook on foreign currency markets, but in the DPRK, this marks a major admission of the central role that markets play in North Korean life.
The book “The Methodology of Monetary Issuance and Monetary Adjustment” has a lot to tell us about the future of market-oriented reforms under Kim Jong Un. Contrary to inferences drawn from other sources, this book indicates a level of consolidation and commitment to the use of market mechanisms in the management of the economy, and speaks to the leadership’s willingness to accept markets over central planning in a growing number of areas.
North Korea is a country where the word ‘market’ is rarely used in official publications, and where markets remain at the alleged margins of the economy. The fact that some of the country’s top minds in monetary economics openly admit the existence of a market-oriented exchange rate that is in widespread usage is a dramatic signal of just how serious the government is about reform. This has the hallmarks of naked and all-encompassing state capitalism, without private firms or private property outside the household, with a side-order of state socialist planning alongside.
All this represents a dramatic improvement on state socialism, and if other areas of economic policy – especially investment policy – and the sanctions situation improves, these kinds of measures may help to encourage economic growth and better lives for North Koreans.
[Read full article at NK News]