The Management of Economic Development Assistance in the Democratic People’s Republic of Korea

This article suggests how the Democratic People’s Republic of Korea might manage its relationships with the International Monetary Fund and the major multilateral development banks. The DPRK can handle conceptual economic policy formulation and traditional investment planning work better than most outside observers think; but it will need to strengthen institutional competency. Though many observers expect that the DPRK’s relationships with international financial institutions will be driven primarily by a process of Korean economic integration, the DPRK’s political priorities may well be to use those institutions’ resources to increase its range of options by building bridges to China, Russia, and the European Union. The international financial institutions will be better able to help the DPRK deal with the political and institutional dimensions of development if they recognize the potentially constructive role of China. The United States needs to relax its restrictions on the financial institutions’ preparatory work in the DPRK if it wants an economic opening to get under way.