Ever since the division of the Korean Peninsula, there has been little economic or cultural interchanges between South and North Koreas.
North Korean economic system was introduced and developed in keeping up with specific geographical and industrial situation, being basically soviet-type economic development method initiated by Stalinists.
Therefore North Korea has utilized foreign trade as a means of economic construction in an autarky way. In other word, they import goods in advance which are short in economic construction and perform export for payment.
The trade in North Korea that has been driven based on these principles came to bring about much closed and static features of trade structure and the volume and potentiality of foreign trade in North Korea has been assessed as very low.
Recently economic cooperations in Northeast Asia are actively discussed, which is of great importance to South and North Koreas. In this scheme of economic cooperation in the region, South Korea and North Korea have closely to pursue in the mutual connection and cooperation, so as to take in the mutual confidence and inter-dependence.
A positive description of catch-up convergence presented earlier by Jan Tinbergen(1965) has led to studies. And so, in this study, I shall determine a model for systematization of labor division between South Korea and North Korea.
The purpose of this study is to analyze the model for systematization of division of labor between South Korea and North Korea. There are two main points to this study.
First, the mutual linkage of labor division and catch-up convergence in the North Korea.
Second, both South and North Korea need of the systematization of labor division in order to construct Northeast Asian economic cooperation.
According to the analysis of trade intensity proposed by Kojima(1964), The degree of trade intensity between South and North Koreas is sharply increasing. This implies that both Koreas' mutual linkage and division of laborare to be bigger in the future.
Through the study of the systematization of labor division between South and North Koreas will be able to be reached in the following process of step. Firstly, origin step(first step) is information exchange and percussion cooperation plan. Secondly, intermediate step(second step) is mutual visit and extention of trade. Thirdly, final step(third step) is joint ventures and co-production of raw materials.
Conclusions of this study are summarized as follows. Firstly, interchange of goods and services must be activated. Secondly, South Korea must do the positive support for trade with North Korea. Thirdly, both South Korea and North Korea must construct oversea Network system and the economic insitution. Fourthly, South Korea has to make an effort to eliminate the heterogeneous economic system of North Korea.
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