Question

What program receives the majority of the country’s budget?

a) The economic system of North Korea is called a centrally planned economy. This means that the economy of North Korea is directly planned. It is run by the Communist government in power. The government makes all of the economic decisions. It says what products are made and grown. It says who can buy these products. The government limits who can invest in the country. Most companies from other countries are not allowed to do business in North Korea. Individual people in North Korea cannot own a business. They cannot own property. Nearly all property belongs to the government. b) The constitution states that these activities are against the law. However, they do exist in limited cases and without the knowledge of the government.
c) The flag of North Korea. At top is a horizontal blue bar, followed by a thin white bar, a red field, a thin white bar, and a blue bar at bottom. In the red field is a white circle with a red star in the middle.
North Korea flag
d) The economy of North Korea faces many problems. Buildings, factories, machines, and equipment—the capital stock—in North Korea are outdated and beyond repair. The government has not invested money to keep its capital stock updated. There is a shortage of spare parts to fix broken machines and repair factories. Crop failures and increased military spending also negatively affect the nation’s overall economy.
Military Spending
e) North Korea is a dictatorship. One person controls the entire country for life. The military of North Korea is the main force in the nation. A large share of the nation’s resources, or gross domestic product (GDP), goes to military spending. In recent years, North Korea has invested heavily in a nuclear program. It wants to build atomic bombs. It will try to deliver them through ballistic missiles. The result of this investment is that resources that are needed elsewhere are not available. There isn’t money to improve North Korea’s capital stock or to feed and house its people.
f) Another result of this military spending has been that some nations of the world have taken actions against the economy of North Korea. Countries such as the United States, Britain, and Germany no longer trade with North Korea. Businesses in these countries are forbidden to do business with North Korea. These actions further limit the amount of resources available for the people of North Korea.
g) Agricultural Challenges
North Korea has a very limited amount of land that can be used for farming. The land that is available oftentimes is of poor quality. Crops have difficulty growing in it. Fertilizer, tractors, and fuel are also in short supply. This limits how much food can be grown. Weather is also unpredictable. From the mid-1990s to the mid-2000s, the nation faced famine and starvation. The people of North Korea had very little food to eat.
h)Today, the country has increased the production of corn and rice. However, these increases still do not meet the needs of the people. North Korea must still import significant amounts of food to feed its people. Many North Koreans today suffer from malnutrition and poor living conditions.
i) The Future of the North Korean Economy
The government of North Korea has said that the goal of the economy is to improve the standard of living of its people. That goal is an elusive one for most North Koreans. The government has done little to achieve an improved standard of living. In 2016, the government released its economic plan for the next five years. This plan outlined the steps needed to improve economic growth across the many parts of the country’s economy. However, maintaining unquestioned political control of the nation is the government’s first concern. Changes needed to help the economy of North Korea grow may not occur if these changes conflict with the need of the government to maintain firm control of all parts of the economy.

Answer 1

The North Korean economy is a command economy where the government decides all economic activities, including production and pricing. Military spending receives the majority of the budget, with a focus on maintaining one of the world's largest military forces and developing nuclear capabilities. This has led to economic isolation and challenges due to international sanctions.

Step-by-step explanation:

Command Economy and Military Spending in North Korea

The North Korean economy, which is a centrally planned system, revolves largely around the government's directives. Unlike its neighbor South Korea, which has a thriving democracy with state capitalism fueling its economic growth, North Korea maintains a command economy. This means the government makes all critical economic decisions, including the production and pricing of goods and services, the methods of production, and workers' wages. Military spending receives a significant portion of the North Korean budget.

Despite the numerous challenges the nation faces, from outdated capital stock to agricultural limitations, a vast amount of resources is diverted towards the military and nuclear programs. This focus on militarization comes at the expense of other sectors that are crucial for the nation's economic growth and the well-being of the North Korean people. The policy of pouring resources into a large military force and prioritized military expenditure has historical roots going back to the leadership of Kim Il Sung. With one of the largest military forces in the world, North Korea continues to invest heavily in defense capabilities, including their controversial nuclear program, often leading to international sanctions and further economic isolation.

Answer 2

The program that receives the majority of North Korea’s budget is military spending, due to its centrally planned economy, where the state makes all economic decisions, including heavy investment in military capabilities. This is in contrast to South Korea's successful state capitalism and export-oriented growth.

Step-by-step explanation:

The program that receives the majority of North Korea’s budget is military spending. North Korea, also known as the Democratic People’s Republic of Korea (DPRK), operates under a centrally planned economy influenced by its communist government. This command economic system dictates the production and distribution of goods and services, including healthcare and education, mimicking the historical approaches of the Soviet Union and Cuba. The DPRK diverts a significant portion of its Gross Domestic Product (GDP) towards sustaining one of the world's largest military forces and continuing its development of a nuclear program. This allocation has led to several consequences, including economic sanctions from other nations and a deficiency in the funding for capital stock updates and addressing the basic needs of the North Korean population, such as food security and housing.

Contrastingly, South Korea has leveraged state capitalism, which has been instrumental in its growth, particularly in the manufacturing and export sectors. Democratic South Korea has successfully utilized land reform and external economic aid to enhance agricultural productivity and support a densely populated nation, unlike its northern neighbor. This has resulted in South Korea becoming a major production hub for automobiles, electronic goods, and textiles, vastly improving its standard of living. Overall, the economic trajectories of North and South Korea represent two vastly different approaches: one adhering strictly to a command economy with significant military expenditure and the other embracing capitalist reforms for economic development.