Economic Reforms in North Korea and Viet Nam

Abstract

Socialist-oriented developing countries, among which North Korea and Viet Nam, are in a state of economic crisis. Economic reforms attempt to cope with the crisis. The North Korean reform aims at perfecting the existing directive planning, following the same path as East Germany. Viet Nam is implementing a reform more open to market mechanism, like in Hungary or in China. This paper elaborates further on these two models of economic reform concerning planning, state enterprise management, price formation, institutional arrangements, private sector, foreign trade and foreign direct investment. In both models state control over the economy is reduced though unevenly.