US experts: North Korean special economic zones have long way to go

GMT 12:45 2015 Wednesday ,25 November

Arab Today, arab today US experts: North Korean special economic zones have long way to go

Coal-transporting cranes in the port of Rajin in the urban area of Rason, North Korea
Washington - YONHAP

 North Korean leader Kim Jong-un has established dozens of special economic zones in an effort to help rebuild the country's economy, but strained ties with the outside world and other problems are hampering such projects, U.S. experts said Tuesday.
"Since Kim Jong-un assumed power, he has prioritized economic development in a way his father never did," Andray Abrahamian and Curtis Melvin, experts on the North's economy, said in a report carried by 38 North, a website specializing in North Korea issues.
"Indeed, much of his domestic brand is now linked to economic growth and quality of life issues. He has tinkered with the modus operandi of both farms and state owned enterprises, and set forth a very visible economic experiment: the creation of a dozen Special Economic Zones in 2013, followed by a second group in 2014, and two more zones in 2015," they said.
Of them, four are considered priorities: Rason, Unjong, Wonsan and Sinuiju, the experts said. These zones, with a variety of intended functions and ostensibly foreign-friendly regulations, "signal a willingness of the Kim regime to explore economic policy options," the report said.
"However, their slow progress and development also clearly illustrate the challenges North Korea faces to get these projects off the ground given the current business and investment environment," it said.
Under his trademark "byeongjin" policy, the North's young leader has pursued simultaneous development of the economy and the nuclear program. That compares with the "songun" or military-first policy of his father and late leader, Kim Jong-il.
Though the Kim regime may be promoting special economic zones as a key piece of its economic development strategy, there is still "a long way to go to make these zones successful," the report said.
"Certainly, the North's strained political relations bring about serious financial and reputational challenges to attracting foreign investment; however, it is not the only impediment to success," it said.
"Inconsistent and unreliable communication about plans for the zones and a lack of strategic planning for attracting either domestic or international investment reflect limitations of the North's domestic economic policymaking capacity," it added.

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