Let’s say North Korea overthrows their regime and wants to start a new government and new country. What should they do to make themselves as rich as South Korrea?
What do you do to increase trade and production from nothing? There are plenty of countries like Germany or Japan that went to shit and bounced back bigly. Did japan just magically start creating flat screen TVs and superior cars? What the hell happen there?
I just don’t understand how a developing country can become a rich a country. Do they incentives their people to start businesses and mining resources? Is it all a reliance on the outside world to buy your countries shit? Why aren’t all the poor countries rich? Is it only due to their lack of natural resources?
Edit: Then I guess that begs the question why Vensuela is poor, but I guess that’s due to corruption. So does a countries wealth come from it’s ability to hustle on an international scale? How does a poor country hustle it’s way to wealth? Selling?
But it will be way more expensive financially and much harder culturally. It will likely take a couple decades to get the population ready to live in a modern free democracy.
It is going to be very difficult, very expensive, and even if everything is done “right” it will take several generations.
One advantage (so to speak) of West Germany in particular after WWII was that they had been completely defeated. Their infrastructure was in ruins, and psychologically, they were defeated as well. (Likewise for Japan). Thus they were open to radical change, because they had no choice - they were going to be rebuilt in someone’s image, and it turned out to be the image of the West. A lot depends, therefore, if North Korea is simply overthrown without somehow having their whole country reduced to radioactive ruins. If that happens, they will be a basket case for the foreseeable future.
Some lesser disaster - Kim and his generals are massacred in a coup, and somehow the leaders of the coup open themselves up to the rest of the world - then they better hope for what amounts to an invasion and occupation by South Korea. At which point, all they got in NK is cheap labor. So the short answer is “encourage sweatshops” - exploit their only advantage, and convince the West and SK to use the populace to build something cheaply. Very cheaply - even if it happens, NK is not going to be anything like equal with countries other than Haiti for decades.
Maybe the Chinese can do it - they have experience in exploiting their labor - but there is going to be friction between them and SK and the West in keeping the Chinese from taking over.
I have no idea of the educational levels of the average North Korea - can he or she read and write and figure at any reasonable level? They are malnourished and mistreated enough that the current generation might be a lost cause in terms of being able to train up into anything resembling a modern or even Third World work force. Life expectancy and height increased greatly in Japan after WWII, and I suspect something similar will happen in North Korea as their nutrition improves.
The best-case scenario sucks really bad. It’s better than the alternative, but it still sucks. And it is going to be psychologically devastating - the NK notion of juche is foundational to their ideology, and this is diametrically opposed to that.
You may want to research the Asian tiger economies. They went from poor to developed in a few decades. Israel did too.
I don’t know what all you need to make that transition. High levels of human capital, a working government, market economics and an export based economy all seems Important. Eventually the economy transitions to internal demand and higher end goods and services like biotechnology, robotics, complex manufactured goods.
That is my impression at least.
Having said that, North Koreans are so full of physical and mental illness, poorly educated as well as having a lack of community or trust (due to malnutrition, state sponsored terrorism and living in a society where your neighbor may be a spy) that they may not transition well after the regime falls. They are a nation full of sick, paranoid, untrusting people due to what they’ve been through and that’ll take time to wear off.
I read somewhere the North Korean economy was more advanced than the South Korean economy until sometime around the 1970s. In short, South Korea was very poor and undeveloped while North Korea was getting a lot of support from the USSR. North Korea isn’t getting much support from anyone today, while South Korea has developed enormously.
I’ve also read that the counterfeit pharmaceuticals and US currency that the North Koreans produce is extremely high quality. So they are capable of good work, if it can only be channeled into something constructive (and legal).
The first step is foreign direct investment. Foreign companies come in an set up sweat shops in the country making clothing and parts. Since labor is so cheap it is profitable to do this. In order to do this the government has to take on corruption. Foreign companies are not going to want to bribe five people every time they need a hookup to the power grid. They are also loathe to go somewhere where their factory might be nationalized after an election.
The second step is entrepreneurship. Local workers start to copy the factories they work in. They start creating businesses to service the sweat shops and their workers. Government needs to provide safety and the rule of law since no one is going to want to start a business if some gang or local satrap can take away from them.
The third step is exports. Once businesses start to thrive regions start specializing in certain industries. They get so good at their businesses they can start exporting their goods worldwide. Government needs to have free trade with richer countries so the new industry can sell its products there.
The fourth step is consumer driven economics. The economy becomes developed enough that it is rich enough to start consuming and driving its own internal market. A government needs to be responsive to its citizens and needs to have some sort of democracy.
One problem for North Korea, is that of reunification. If the Koreas’s reunite then all of the young people and ambitious people are going to want to go South right away leaving only the old and unproductive behind. For instance wages in the former East Germany are still only 66% of those in the former West Germany, the average net wealth is twice as large in the former West Germany, and 19 of the 20 richest German cities are located in the former West Germany. It would take probably 100 years at least for North Korea to catch up to South Korea.
The problem with North Korea is that there is virtually no occasion for anyone to have any real idea of what alternatives there are, economically or politically. After decades of Japanese colonial rule, they passed to Stalinist dictatorship, as close to hermetically sealed from contact with the outside world as possible. East Germans and most of the European post-communist countries had more or less complete access to western radio and TV, correspondence and visits from west-based relatives and so on, and some inherited folk memory of how a basically capitalist economic system worked. The Soviet Union had a substantial middle class and intelligentsia that knew and understood the west; both the Soviet Union and China had leaders who could see a way to creating economic growth, albeit with substantial difficulties in creating a state of law and dealing with corruption. We simply have no idea whether there is any prospect of anyone in North Korea being able to make those adjustments: have Russia, China, Vietnam, Cambodia and Laos made the complete range of changes puddlegum summarises?
Botswana went from being the poorest country in the world to being richer than any of its neighbors in 40 years. IT was a simple formula; the rule of law. They held fair elections, ran the government without any corruption to speak of, and the military didn’t stick its nose into politics.
Diamonds didn’t hurt, either…also, the ruthless oppression of aminority ethnicity on the way. Nothing pulls a volk together like profiting from shared bigotry.
Botswana’s current stability and prosperity are based off diamonds, tourism and cattle - The second two are not, ultimately, going to last. Let’s hope the social investments of the profits of the first will compensate for that.
But either way, I don’t think “have diamonds” is a portable model for economic development.
Germany and Japan had another advantage; they were both front-line states in the Cold War. The United States invested heavily in helping to rebuild both countries because we didn’t want them to be vulnerable to the communists.
Korea resident checking in: North Korea isn’t looking at a future where they can get their shit together, make juche work, and continue to function as a separate nation-state. Kim Jong Un was reportedly a sane and sober young man when he became the head of the country, which is not a viable way to stay alive or in power there. Everyone’s future plans involve somehow re-uniting the Koreas.
The Kurds certainly want one. So, indeed do the Palestinians. So, too, the Catalans…
Of course, there are certain requirements to creating a new state: agreed borders that can be policed, an army to defend the territory from rival states, a constitution, a legal system that guarantees commercial contracts, some resources to trade, an education system…
Singapore is an interesting example, their major asset was a deep-water port on a marine trade route. They went into import/export, insurance, finance, high-value factories producing plastics and semiconductors. They have done very well. Largely because most of the other countries in the region were run by some potentate with a greedy family or simply did not participate in world trade much like communist China. Having a lawyer in charge certainly helped.
It requires the leadership of statesmen with a vision to assemble these things. Sadly those tend to be in short supply.
North Korea can be developed, for sure. Especially if it is bankrolled by South Korea. The South Koreans have had a long time to study this question and there is much to learn from the German experience.
For examples of how not to do nation-building, there is Iraq and Afghanistan.