Cuba and North Korea: Less Developed Countries

Cuba and North Korea: Less Developed Countries
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Cuba and North Korea: Less Developed Countries
Introduction
There are three categories of classifying countries relative to their level of economic development. These categories are developed, developing, and less developed nations. Cuba and North Korea form a group of less developed countries. Cuba is an island country in the Caribbean region while North Korea is an Asian country occupying the northern end of the Korean peninsula. The two countries are almost similar in several metrics. Both are relatively small countries that happen to have survived the collapse of real socialism. Geographically, they are almost the size although the North Korean population exceeds that of Cuba by more than double.
In retrospect, North Korea’s individual is four times less that than the Cuban gross domestic product. This contradiction raises considerable concerns as to the difference that has happened between the two countries taking into account that they both undertook major political reforms in 1990-1991 (Korea Economic Institute of America, 2011). This report centers on the two country’s similarities and differences that have resulted in their present economic situations with the vital focus being on the static level of their economies, use of natural resources, governmental corruption, judicial financial systems, and financial systems.
Closed (Static) versus Open Economies
At the penultimate of the Second World War, the Japanese forces in the North of the Korean peninsula surrendered to the Soviet troops while the American troops maintained control of the south. Around 1950, the Soviets backed the Kim II-Sung to regain control of the south (currently, Republic of Korea) to no avail. The resulting event was the Korean War that began in 1950 up to 1951. Nevertheless, there are apparent differences between the two countries, particularly, in the modern world. South Korea is a flourishing economy far from the Communist-led neighbors. Since the Korean War, dynastical North Korea adopted the juche ideology, the same as the Soviets, whereby it sought to be self-reliant. A country that perceives itself as self-sufficient insinuates that it does not desire any help or imports from other nations. In this regard, it is a closed economy. Consequently, North Korea and its citizens have maintained a subsistence approach of living albeit the periodic famines that they face regularly.
However, this system coupled with the songum (military-first politics) has failed to produce substantial development for the country (Bajpai, 2019). The dictatorial regime rejected private ownership in agriculture, trade, as well as industry. In essence, the free market is an illegal dimension in the country. In his book, The Wealth of Nations, Adam Smith (2010) argued that an economic player was highly motivated to produce more when they were aware that an outcome had a direct financial gain. This assertion explains the immense progress that nations with free markets have developed over the years. South Korea, which was also under military dictatorship, but later evolved into a democracy is an excellent example of this aspect.
While Kim Jong-un continues to conso...