<P> In 2017 Dr. Mitsuhiro Mimura, Senior Research Fellow at Japan's Economic Research Institute for Northeast Asia, who has visited North Korea 45 times described it as the "poorest advanced economy in the world", in that while having comparatively low GDP, it had built a sophisticated production environment . He describes the recent rise of entrepreneurial groups through "socialist cooperation", where groups of individuals can start small enterprises as cooperative groups . Managers in state - owned industries or farms are also now free to sell or trade production beyond state plan targets, providing incentives to increase production . Managers can also find investment for expansion of successful operations, in a process he calls "socialist competition". A state plan is still the basis for production, but is now more realistic leaving room for excess production . </P> <P> The state budget is a major government instrument in carrying out the country's economic goals . Expenditures represented about three - quarters of GNP in the mid-1980s--the allocation of which reflected the priorities assigned to different economic sectors . Taxes were abolished in 1974 as "remnants of an antiquated society ." This action, however, was not expected to have any significant effect on state revenue because the overwhelming proportion of government funds--an average of 98.1% during 1961 - 70--was from turnover (sales) taxes, deductions from profits paid by state enterprises, and various user fees on machinery and equipment, irrigation facilities, television sets, and water . </P> <P> In order to provide a certain degree of local autonomy as well as to lessen the financial burden of the central government, a "local budget system" was introduced in 1973 . Under this system, provincial authorities are responsible for the operating costs of institutions and enterprises not under direct central government control, such as schools, hospitals, shops, and local consumer goods production . In return, they are expected to organize as many profitable ventures as possible and to turn over profits to the central government . </P> <P> Around December of every year, the state budget for the following calendar year is drafted, subject to revision around March . Typically, total revenue exceeds expenditure by a small margin, with the surplus carried over to the following year . The largest share of state expenditures goes to the "people's economy," which averaged 67.3% of total expenditures between 1987 and 1990, followed in magnitude by "socio - cultural," "defense," and "administration ." </P>

Who makes decisions about what goods to produce in north korea