However, privatization weakened the government’s power, destroyed social order and exacerbated corruption. The opaque and monopolistic manner of privatization in Russia benefited only those who were in power. As a result, Russia became a phony capitalist economy and private companies and businessmen came to have a negative public image. The word “piratization” was also coined based on this.

Vietnam’s equitization, which began in the early 1990s, is still underway. Even though the government has announced privatization plans on several occasions, the process has been very slow with mediocre achievements. State-owned companies in Vietnam are struggling with debt issues and diseconomies of scale, which can be connected with the country’s falling industrial competitiveness. The default of Vinashin Group (largest Vietnamese shipbuilder) in December 2010 was a representative instance that highlighted the need to reform state-run companies. The World Bank also recommended that in order for the Vietnamese economy to develop into a middle-income country by 2035, privatization of state-owned enterprises will have to be accelerated.

According to these analyses of Russia’s and Vietnam’s cases, the following factors can be identified as determining the success of privatization. First is institutionalization of the transition process. Fortunately, it seems that the strong authority of the Labor Party and the government in North Korea can effectively accelerate the institutional reform. Second, a strong support group must be formed in the transition process. The success of on-going reform policies in North Korea also can be determined by how quickly and strongly the support group is formed. The third and crucial determinant is to ensure that benefits are evenly distributed.