NK Touts Economic Reform Aims

Plans for the establishment of special economic development zones in each province of North Korea have been officially confirmed. The news appears connected to Daily NK’s recent report on the issuance of a directive to economic officials in the country’s nine provinces, calling upon them to designate two cities as potential sites for development in a similar manner to Rason Special Economic Zone.

According to an October 16th report by Chinese news agency Xinhua’s correspondent in Pyongyang, Yoon Yong Suk, who is in charge of the Chosun Economic Development Committee, recently spoke at the “Pyongyang International Symposium on Special Economic Zone Development,” held at the Yanggakdo Hotel. He said, “We are actively preparing to establish special economic zones in all provinces and introduce foreign capital.” Chosun Economic Development Committee is a “non-state” institution established for the purpose of developing special economic zones.

He explained, “At the Central Committee meeting last March, it was decided that special economic zones should be established in each province, and tourist areas, too, in order to invigorate the tourist industry, and bring about greater diversity in international trade. Currently, each province is moving forward with the establishment of development zones and the task of attracting foreign currency, in accordance with the plan.”

“It is the consistent policy of our country to develop the Rason Special Economic Zone, the Hwangguempyeong and Wihwa Island areas, Mt. Geumgang International Tourist Area, and economic development zones in each province,” he added. “We will find practical and logic means by which to expand economic, trade and scientific exchanges, as well as enhance understanding, exchanges and contacts with governments, private industry, and private groups.”

On October 1st, Daily NK reported that economic officials in provincial areas of North Korea had been ordered to formulate plans for the designation of two candidate cities for development, and that legal and systemic modifications were being investigated, in order to try and ensure interest from foreign capital.

According to Daily NK’s information, the profit derived from joint ventures would be shared 50-50; owever, foreign companies would only have to cover the cost of land use and wages.

On a related note, on the 16th an order issued by the Standing Committee of the Supreme People’s Assembly raised the National Economic Development Bureau up a level, renaming it the National Economic Development Committee. The National Economic Development Bureau drew up the current 10-year economic development plan in 2011.

Speaking about the policy, a senior researcher with the Korea Institute for International Economic Policy, Yoon Deok Ryong told Daily NK, “When you look at the character of the National Economic Development Committee, you can see that North Korea is enhancing state agencies for economic development. We can see that these measures reflect some degree of will for real reform.”

However, he added, “Fierce pressure from China and the need to develop relations with the outside world, including the U.S., leave North Korea with no option but to make these kinds of moves. But even if there really is the will for reform, if North Korea feels a sense of systemic threat, it will not move forward, just as in the past.”