How have the Korean economies changed since the Korean War?

Answer 1

At the end of the Korean war the economies of both North and South Korea were devastated, but due to the centralized and heavy handed government policies of North Korean leader Kim Il Sung and from massive economic assistance from Communist Bloc nations, North Korea rebounded much quicker than South Korea. Between the 60s and 70's the rest of the industrialized world referred ot it as the Korean miracle.

However, three things changed; First, Kim Il Sung died and the reins of power passed to the inept leadership of his son Kim Jong Il. His disastrous economic policies included a "military first" policy which favored the military heirachy over the civlian population, as well as a monetary reform to stamp out black marketing which wiped out the life savings of practically every North Korean. Second, After the fall of the Soviet Union and after China started embracing capitalism under Deng Xiaoping, all economic assistance and subsidies were cut off to North Korea and everything from food to fuel became scarce, leading millions of people in the north to die of starvation and the entire infrastructure of the country pracctically shutting down. Third, South Korea slowly but surely brought itself up out of the war of wreckage and its own series of inept leaders to become one of the strongest economies in the world. Companies like the electronics firm Samsung and automotive firms Hyundai and Kia have become industry giants and all the former ideological allies of North Korea now recognize South Korea as a sovereign nation and have established diplomatic and economic relations with the south, as well as demanding North Korea pay for their imports in cash, further isolating North Korea economically and politically.

Today, the difference in GDP between the two is staggering. The GDP of North Korea is approx. $40 billion while the GDP of South Korea is a whopping $1.5 TRILLION, over a thousand times higher. At this point, most analysts (including China) believe North Korea is in imminent danger of collapse which will send millions of refugees across the borders into China and South Korea. The wild card is whether North Korea's new leader Kim Jong Un will revive the situation or hammer the final nail in the coffin.