Pros And Cons Of North Korea Economy

III. NORTH KOREA

A. COMMAND ECONOMIC SYSTEM

A command economy North Korea is where a central government makes all economic decisions. The government or collective own the land and the means of production. It doesn’t rely on the laws of supply and demand that operate in a Market Economy North Korea. In this system consumer and producers have no right or power over production. That means the economic is fully control by government. Government has the full authority on the economic activity; how the goods should be produced and for whom the goods are released.

Besides, command economic system is centralized control where the most notable feature of command economy is that large part of the economic system is often control by a federal government;

For example, the government in North Korea tells worker what jobs they must fulfill. It discourages them from moving. The goods it producer aren’t always based on consumer demand. But citizen find a way to fulfill their need. When North Korea keep use common economy system, they are cannot create the critical and creative employee to overcome the economic problem exist in North Korea.

In conclusion, there have pros and cons when use common economic system in North Korea. So government need to make sure this common economic system is working effective when use in North Korea.

B. FEATURES COMMOND ECONOMIC SYSTEM

The four key features of Command Economic System are:

 The government of North Korea creates a central economic plan. The five-year plan sets economic and societal goals for every sector and region of the country. Shorter-term plans convert the goals into actionable objectives.

 The government of North Korea allocates all resources according to the central plan. It tries to use the nation's capital, labor and natural resources in the most efficient way possible. It promises to use each person's skills and abilities to their highest capacity. It seeks to eliminate

ECONOMIC PROBLEM IN NORTH KOREA

There have four economic problems in North Korea, which is:

1. Existing of black Market.

North Korea faces the problem where their citizens are often developing the shadow economy or black market to buy and sell the things that command economy isn’t producing. As example, North Korea did not expose on high technology such as smartphone and other technology product in their country compare to the success country. Besides, the government of North Korea is weakening to control this market and weaken support for the central planning authority.

2. Leading inefficiency resources

Command economies often produce too much of one thing and not enough of another. North Korea is facing difficulty for the central planner to get up-to-date information about consumer’s needs. As example customer need online purchasing platform to make them more effective and efficient purchase. Also prices are set by the central plan and so it can’t use to measure or control on the demand instead rationing often become necessary

3. Lower on stimulating