https://www.britannica.

com/place/North-Korea/Economy

North Korea has a command (centralized) economy. The state controls all means of production, and the
government sets priorities and emphases in economic development. North Korea has made strong
efforts to transform an essentially agrarian economy into one centered on modern industry in the post
Korean Wars years, it is generally believed that the country has been only partially successful. North
Korea’s economic goals have always been linked to the general government policy of self-reliance (juche,
or chuch’e). The country shunned foreign investment, although it accepted considerable economic aid
from the Soviet Union and its satellite eastern European countries as well as from China. Despite its
stated policy of self-reliance, North Korea routinely found it necessary to import such essential
commodities as fuels and machinery as well as grain.

By the early 1990s, North Korea had begun to experience severe economic hardships. The Soviet Union
had collapsed, and the communist regimes of its eastern European allies had fallen, depriving North
Korea of most of its trading partners and much of its former aid. China reduced but did not completely
cut off its provision of materials to North Korea, but in 1992 it began to demand cash payments in place
of grants-in-aid or credit accounts. In addition, in the mid-1990s the country suffered a series of natural
disasters, including floods and drought. Serious grain and food shortages resulted, and starvation and
malnutrition were widespread throughout the country.

In addition to North Korea’s acceptance of foreign aid during the 1990s, its poor economic performance
during the decade forced the government to begin opening up the economy to limited foreign investment
and increased trade. By the end of that decade, North Korea was actively inviting foreign investment
from European Union (EU) countries, South Korea, and others. Efforts have been made throughout
North Korea’s history to increase low labour productivity. In the late 1950s the state adopted a mass-
mobilization measure called the Ch’ŏllima (“Flying Horse”) movement that was patterned on China’s
Great Leap Forward of 1958–60.