North-Korean Economy experienced structural friction, a lack of investment fund, increase in funds necessary to develop a general imbalance in the production of industrial and consumer goods. In recognition of the fact, that the 21st century will indeed be the reconciliation era, North-Korea is expressing significant interest in boosting the level of activities with Korea. In terms of technology, capital and transfer procedures, Korea stood out as the ideal partner in promoting economic exchanges with North-Korea. Even in the absence of natural resources and raw materials, Korea engaged and prospered in the production of such daily necessities as textiles and foot-wears, electronic appliances as color TV and VTR, and high technologic products like semiconductors, computers, thus emerging as a model economy for the developing countries. As mentioned thus far, it has become increasingly necessary for Korea and North-Korea to intensify the pursuit of closer working relations.
Korean companies see greater business potential in joint venture and independent investment.
The Korean companies, of which investment projects in North-Korea are under negotiations, are production efficiency seekers. In other words, they want to go to North-Korea to recruit the efficient labor force at low price. Korea's investment into North-Korea will focus on the sole venture manufacture of consumer goods in the short run. This indicates that greater economic ties with North-Korea is favored. Judging from the current situation in North-Korea, economic cooperation must be focused on area where our participation is most desperately required, such as transfer and application of competitive technologies going one step further, in distribution and construction, investment in tourism, and other areas of mutual interest.