Assessing N. Korea’s efforts to encourage private business
Since gaining power, North Korean leader Kim Jong Un has adopted various policies aimed at reforming the country’s business environment. The regime amended its enterprise law twice in 2013 and 2015 to allow businesses to raise their own funds. This year, a constitutional amendment laid the groundwork for the “Socialist Enterprise Responsibility System.”
These efforts at reform have enabled the donju (North Korea’s nouveau riche) to invest in state-run enterprises even more than before. Despite the growing intensity of international sanctions against North Korea, private enterprises are being established at an even greater rate than before due to investments made by the donju.
STATE-RUN ENTERPRISES DECLINE AS PRIVATE FIRMS INCREASE
The decline of state-run enterprises has contributed greatly to the newfound prosperity of private companies. The meager wages (generally KPW 3,000 a month) paid out by state-run enterprises have made them far from appealing to North Korea’s workforce. North Koreans now aim to work at enterprises that pay USD 100 a month. Laborers also expect private firms they work for to supply them with rice.
The pro-business attitude shown by North Korean officials has played a major part in bringing about this shift away from dominance of state-run companies. North Korean authorities generally let private businesses operate as long as they are properly registered and pay taxes. ......
[Source: Daily NK]
