World-renowned economist advises N. Korea to `open up economy`

By Shin Hae-in
SEOUL, May 27 (Yonhap) -- North Korea should take lessons from China and realize
it can maintain its regime even with economic liberalization, a renowned
economist said at a press conference in Seoul Wednesday.
"China could tell them 'Look what happens when a former communist country chooses
economic liberalization,'" New York University Professor Nouriel Roubini, known
for his astute outlook on the world economy, told a press gathering at the Seoul
Digital Forum.
"It doesn't necessarily have to be a threat. If you provide people with jobs,
your regime can stay stable for a long time and the economic liberalization can
be beneficial to a country."
North Korea is among the world's poorest countries with a per capita income of
US$1,150 in 2007, the last year for which figures are available, according to
South Korea's central bank.
Pyongyang faces chronic food shortages and has relied on outside aid to help feed
its 24 million people since famine reportedly killed as many as two million in
the 1990s.
Roubini, the co-founder and chairman of the Roubini Global Economics Monitor,
emphasized the importance of South Korea's role in North Korea's economic
recovery.
"North Korea's action in areas where South Korea could provide its people jobs
(is important)," he said. "It is most unfortunate for them to shut down the
current factories (in Kaesong)," he added, referring to a troubled inter-Korean
industrial complex.
North Korea said on May 15 that it has nullified all contracts with South Korea
regarding the complex in the North's border town of Kaesong and told South Korean
firms to accept the new terms or leave.
Tensions rose between the two Koreas following the inauguration of President Lee
Myung-bak in Seoul last February. Lee, a former CEO and right-leaning politician,
abandoned his predecessor's engagement policy toward Pyongyang, declaring his
government will link further aid to the North with its progress in
denuclearization.
Roubini is one of the attendants at the sixth two-day Seoul Digital Forum which
opened here Wednesday.
hayney@yna.co.kr
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