Transformation of the Economic System in the Central and Eastern European Countries and its Implications for the North Korean Economy
Yeo-Cheon Jeong

In the early 1990s, every Central and Eastern European country (CEECs) which belonged to the former Eastern Bloc started transforming from a socialist planned economy to a capitalist market economy. This was made possible by the preceding revolutionary political changes in CEECs in the process of which old socialist ideology was discarded. As every CEEC pursued the same goal - establishment of a market economy - the basic directions of economic transformation consisted of the same elements: liberalization of economic activities, macroeconomic stabilization, privatization of state enterprises, and introduction of a market infrastructure. However, the strategies and concrete policy measures applied differed from country to country, reflecting each individual country's political and economic situation.

Although evolution of CEECs' economies under central planning had been tightly interwined due to structural and systemic factors, and the basic direction of economic reform was the same in every country, the outcomes of 10 years of economic transformation in CEECs during the 1990s show a considerable discrepancy among regions and countries of Central and Eastern Europe. On the whole, it could be said that Central European countries such as Hungary, Poland and the Czech Republic show better achievements in market institutionalization and macroeconomic performance than countries of the former Soviet Union.

Differences in policy measures and initial conditions are regarded as two key factors which caused discrepancies in the outcomes of economic transformation among CEECs. Yet, as policy measures applied in CEECs reflected their initial conditions, the initial condition is the most fundamental factor which affected processes and outcomes of economic transformation in CEECs. Taking the experiences of Asian socialist countries such as China and Vietnam into account, the influence of initial conditions on the processes and outcomes of economic transformation becomes more clear.
Defects inherent to the socialist planned economic system and the structural dependency on imported energy resources are two basic obstacles hampering North Korea's economic growth. Therefore, it seems inevitable for North Korea to reform its economy sooner or later, if it could be normalized and grow. In any case, the direction of economic reform in North Korea will be bound to introduce market elements into its planned economy. However, prospect for the regime's stability will play a decisive role in choosing concrete reform measures in North Korea.

The structure of the North Korean economy is heavily distorted. First of all, disproportionate emphasis is placed on heavy industry, and the price structure is more seriously distorted than in CEECs at the beginning of 1990s. Taking these structural distortions into account, an overall economic transformation a la CEECs will definitely lead the North Korean economy into a chaotic situation. On the other hand, North Korea's agricultural sector is more tightly planned and organized, and accounts for a much smaller share of the national economy than in China. Therefore, the Chinese reform strategy of the early 1980s which promoted light industry by using unemployed and chief human resources in the agricultural sector doesn't seem to fully fit North Korea.

Economic reform in North Korea is expected to begin with restructuring heavy industry and promoting light industry, especially in export-oriented sectors. In order to meet these goals, the North Korean government could allow individual state-owned enterprises in heavy industry more initiative in their activities. As a further step, black market activities in the service sector and light industry which are known to have been flourishing in North Korea since the mid-1990s, could be officially allowed. If these reform measures prove to be unharmful to the regime's stability, the North Korean government could take bolder measures in liberalizing economic activities and correcting macroeconomic disequilibrium than have been taken in China since the late 1970s.

As long as reunification through gradual system convergence between the two Koreas remains a basic principle of North Korean policy, the South Korean government's economic policy toward North Korea should focus on marketizing and restructuring the North Korean economy. Measures such as direct investment in North Korea in the field of export-oriented light indusry and multi-party cooperation projects among South and North Korea and China, Russia or Japan to modernize North Korea's industrial facilities are advisable.

제1장 서론
1. 연구의 의의
2. 연구의 방법 및 주요 내용

제2장 구동구권 경제체제전환의 과정
1. 경제체제전환의 원인
2. 경제체제전환의 목표와 방향
3. 경제체제전환의 전략과 정책

제3장 동구권 경제체제전환의 성과
1. 경제체제 전환정책의 효과
2. 동구 경제체제전환의 성과
3. 국가별 경제체제전환의 성과

제4장 동구권 경제체제전환의 평가
1. 국가별 경제체제전환 성과의 차이와 그 원인
2. 구동구권 경제체제전환의 평가와 시사점

제5장 북한 경제의 초기여건
1. 북한체제의 변화 가능성과 방향
2. 북한 경제체제전환의 초기여건

제6장 동구 경제체제전환이 북한의 경제개혁에 주는 시사점
1. 초기여건과 경제개혁의 방향
2. 對북한 정책에 대한 시사점