A comparative analysis of the economic systems of South Korea and North Korea reveal that despite their commonly shared cultural heritage these economies differ considerably in terms of their population rate, unemployment rate, GDP, balance of trade and inflation rates. A qualitative research methodology is employed for the purpose of this comparative analysis wherein the literature review analyses available journals, government websites and articles. Comparisons among the major parameters of population, unemployment, GDP, balance of trade and inflation rate between the two economies are essential to identify whether the insights gained from the literature review confirm the findings of the data analysis.
Qualitative data from the available literature underline that the economic system of South Korea is more stable than that of North Korea. The South Korean economy is characterized by stable economic growth in terms of its increasing GDP rate, growth of industrialization, and the nation rightly could become a member of the trillion dollar club of the world economies in 2004. On the other hand, the North Korean economy is surrounded by serious economic problems that have adversely affected its economic system.
The current study shows that while South Korea is capable of managing its rapidly aging population through economic stability the increasing North Korean population may continue to suffer from poor living standards and malnutrition. Similarly, the results of the study show decreasing unemployment rates in South Korea whereas the higher unemployment rate of North Korea throws light on the absence of employment opportunities in the economy. The stable GDP rates, low inflation rate, trade surplus and low unemployment rate of South Korea stand in contrast to the decreased GDP rate, trade deficit and poor standard of living in North Korea.
The findings of the study thus emphasize on the growing need for industrialization and foreign investment in the North Korean economy.