This study examines the economic policies of the Kim Jong-un regime, focusing on Our-Style Economic Management (principles of economic management), special economic and economic development zones (external economic policy) and the Five-Year Strategy for National Economic Development (economic development plan). These are three principles that summarize and define the economic policies of the current government and are each aimed at securing government revenue and expanding investment and sustainable development.

These policies have a common direction in that they are being pursued very deliberately and experimentally, which is different from previous governments. For example, the North Korean government adopted neither sudden policy changes nor nationwide policies and did not forcefully reduce the gaps between official and market prices though the control of markets. SEZ policies were conducted on a small scale to reduce investment risks. Also, the Five-Year Strategy did not propose concrete targets that would be difficult to achieve. In sum, from a long-term perspective, Kim Jong-un took gradual, experimental, regional and partial measures to promote his economic policies.

However, the current external and internal environment requires the authorities to react promptly. First, on the external side, sanctions have negatively affected the economy, forcing the government to emphasize the self-reliance movement, localization of products, etc., which are all based on informalization. The internal production of goods through the utilization of the light industry, promotion of unprohibited products and utilization of informal markets indicate a short-run strategy.

On the internal side, marketization and dollarization have speedily developed. A growth through the expansion of the labor market has become impractical due to an ageing population and increased number of people with experience in the informal market. The growth through expanded revenue is also uncertain due to a drain in government finance. And, a stimulation of growth through an increased level of input no longer assists economic development plans. Thus, the North Korean government has taken a stance to utilize the informal sector in collaboration with the formal sector, with the emphasis on technological development.

In the future, the North Korean government will try to develop an institutional strategy which reflects the recent propaganda depicting the North to be a ‘normal country.’ This could mean the end of wartime emergency and military focused systems and the beginning of peace and economic focused systems.

From a broader perspective, the responsibilities of the Korean government will be to consider both the positive and negative aspects of the economy in response to the changes in North Korea’s economy. The future economic cooperation with North Korea will have to be based on this understanding to gain public consensus and a win-win strategy for both Koreas needs to be developed.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 Medium-to Long-Term Economic Policies Under Kim Jong-un
　Section 1 Principles of Economic Management
　Section 2 External Economic Policy
　Section 3 Economic Development Plans
　Section 4 Conclusions

Chapter 3 North Korea’s Short-Term Policy Responses to Domestic and International Changes
　Section 1 Impact of External and Internal Changes on Economic Management Principles
　Section 2 Impact of External and Internal Changes on External Economic Policy
　Section 3 Impact of External and Internal Changes on Economic Development Plans
　Section 4 Conclusions

Chapter 4 Evaluation and Policy Implications

References
Appendix
ABSTRACT