ess supply of labor. Inresponse, government expenditures need to be reallocated and switched from the South to theNorth.Land reform in North Korea will be one of the first tasks during a transition. Theexperience gained by Korea in the post-World War II period may serve as a guide in this venture. Property rights issues will therefore play a prominent role after unification. There could berestitution of property rights to original owners still alive, the scale of state-owned propertiesthrough public auction, a distribution of property rights to the general public through a vouchersystem, distribution of properties to actual users or a compensation in state bonds. Privatization is a means. Its objective would be to introduce some elements of a marketeconomy. In the process of privatization of hitherto publicly owned enterprises, priority shouldbe given to service and tourism establishments, such as hotels, as many visitors may be expectedfrom the South. In the shift from a collective to a private agricultural system, serious problemsare bound to arise. Industrial policies ought to be devised to respond to a variety of problemsand challenges: the contamination of the environment, unemployment, social justice andconcentration of economic power. Market forces are unlikely to create a productive economicstructure in the North that will match that of the South. Public infrastructure- roads, energy, transportation, telecommunications, hospitals,schools and so on area precondition to make the economy function. Institutions administering amore market-oriented economy must be built and it must be decided what they will do and howthey will be financed, where and in which time span. There will also be the need for massivehuman capital investment in terms of on-the-job and vocational training and retraining as well asthe temporary transfer of managers, entrepreneurs and skilled administrators. Specialadjustments will be required in the...
