Kim Jong Un meeting with Russian President Vladimir Putin at a Russian space center on September 13, 2023. (Rodong Sinmun-News1)

As North Korea seeks to expand economic cooperation with Russia, it has ordered a major overhaul of trading companies operating in the Rason Special Economic Zone, Daily NK has learned.

Speaking on condition of anonymity for security reasons, a source in North Korea told Daily NK on Friday that some of the trading companies in Rason had received orders from the Ministry of External Economic Relations on Dec. 10 to make organizational changes.

According to the source, the ministry called out some of the trading companies responsible for imports and exports in the Rason Special Economic Zone for behaving as if they have special privileges and exhibiting traits of regionalism and modern-day sectarianism by setting up and carrying out trade schemes of their own.

The ministry accused some of the trading companies in Rason of undermining the state-led trade structure and aggravating economic fragmentation and ordered those companies to submit reports about trading and economic activities that fall outside centralized control and management.

North Korea has been heavily emphasizing external economic cooperation, including bids to attract foreign investment, as it pursues rapid economic development despite its dearth of internal resources.

But since bringing trade planning and execution under the control of the central government is one of the goals of North Korea’s five-year plan, the government appears to be taking steps to establish a state-led system of trade prior to a full-fledged expansion of economic cooperation with Russia.

In effect, the North Korean authorities are cracking down on independent activity by trading companies in Rason and boosting state control of the trade sector.

Significantly, the Ministry of External Economic Relations has asked trading companies to improve conditions in joint ventures with Russia and to complete the reassignment of trading officials by the first quarter of next year.

That has elicited muttering from some of the trading officials at Rason. “Not long ago, they were setting up a free economic trading zone in Rason, and now they’re telling us to reorganize our companies so that the state can micromanage us,” one official griped.

The source also reported complaints that trading companies in Rason are still in the government’s bad books ten years after the execution of Jang Song Thaek, who spearheaded the Rason development.

North Korea has recently been seeking economic cooperation with Primorsky Krai, the only Russian province that borders North Korean territory.

According to the Rodong Sinmun, Oleg Kozhemyako, governor of Primorsky Krai, visited Pyongyang on Dec. 11 as head of a delegation from the provincial government.

On Dec. 12, Kozhemyako met with North Korean External Economic Relations Minister Yun Jong Ho at Mansudae Assembly Hall, where they discussed the topic of raising economic cooperation between North Korea and Russia to a higher level.

Translated by David Black. Edited by Robert Lauler. 

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