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Designing Public Sector Capital Mobilization Strategies for the DPRK
Published May 25, 2011
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Estimates of the financial requirements for reconstruction and future growth of the economy of the Democratic People’s Republic of Korea (DPRK, or North Korea) vary greatly, as do estimates for meeting the educational, health, and social security needs of its people. Private investment will be critical in this process, but efforts to stimulate private capital, both domestic and foreign, will need to go hand in hand with mobilizing public investment to remove infrastructure bottlenecks and provide essential social services. An early priority will be to launch investigations in order to take stock of the DPRK’s needs and improve the basis for estimating financial resource requirements for the short and medium term. There is broad consensus that the needs will be huge.

Major challenges facing the DPRK leadership and international commu- nity in any new international engagement framework will include how to mobilize both domestic and foreign public savings to meet capital investment and recurrent expenditure requirements, how to link public resource mobilization with a comprehensive economic reform strategy and viable macroeconomic framework, how to achieve synergy from public and private investment, how to develop absorptive capacity of the DPRK to use funds efficiently and with transparent accountability to minimize what will be great temptations for corruption, and how best to support a new political economy in the DPRK so that it will share the benefits of growth widely among the population and attend to the needs of vulnerable groups.

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