With the death of Kim Jong Il, the former dictator of North Korea, a conspicuous cloud of confusion hovers above the global economy. Questions concerning whether or not the United States should engage in the “black hole market” have risen incessantly. Even more, as the succession of Kim Jong-un takes place, uncertainty and ambiguity plagues the lands north of the Korean demilitarized zone. What’s to happen next?
Considering the innate enmity Korean officials have towards the United States, fiscal policy does not seem likely to deviate much. The current communist regime has kept an iron clamp over its own economy, selectively choosing to trade with its exiguous allies. Moreover, the vast majority of the North Korean population is hardly, if at all, economically involved. The true monetary power is in the hands of a few, hand-picked city elites, who make decisions on a restricted basis within the city of Pyongyang. A gargantuan income disparity exists between the top and lower tiers of salary, which inevitably has led to a proliferation of destitution, spurring famine and malnourishment of many. To say the least, the entire economy is unstable and concentrated narrowly.
At a quick marginal analysis, the utility of trading with North Korea is minimal. Given the high elasticity of its market, North Korea could withdraw from trade at the slightest hint of a potential threat. Careful maneuvering of goods, on top of deft foreign ambassadors, would be needed at all times if the United States should become a trading partner and eliminates current sanctions. Additionally, the stunted diversity of markets of North Korea hardly holds much benefit. While an increase of profit for America will most probably occur, its hardly large enough to hold much face value.
Ultimately, in examination of all external and factors concerning North Korea, trade with North Korea is less than appealing. A tenuous line of repression is all that barricades the nation from chaos.
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