SEOUL, Nov. 18 (Korea Bizwire) - North Korea unveiled detailed plans Wednesday to develop its special economic zone in the border city of Rason aimed at luring foreign investment amid an economic slowdown and a series of U.N. sanctions.
The North made public the comprehensive plan in what is seen as part of efforts to turn the area into a regional logistics hub close to both China and Russia, according to North Korea’s official portal site Naenara.
North Korea has sought to develop the zone since it designated Rason, formerly known as Rajin and Sonbong, as a special economic zone in 1991. But its ambitious plan has faced serious setbacks as foreign investment remains lackluster due to the North’s provocations.’
The North has undergone difficulty in earning hard currency due to heavy sanctions imposed by the U.N. Security Council following the North’s nuclear and missile tests.
In another attempt to revitalize the economic zone, North Korea said it plans to pursue development projects in seven areas, including tourism and logistics. It also unveiled a list of eight North Korean firms that will be able to create a joint venture with foreign companies.
The North said that profits and other proceeds generated at the zone can be repatriated outside North Korea “without restriction,” in what is seen as investment incentives to foreign investors. It also hinted at assuring autonomous operations for firms at the zone.
“It is noteworthy that North Korean firms will be allowed to enter the economic zone, aided by foreign investment,” said Lim Eul-chul, a professor at the Institute for Far East Studies of Kyungnam University.
Analysts said the North’s move indicates its attempt to boost its fragile economy by actively attracting foreign investment at a time when the North’s international isolation is deepening.
They said that the North’s move may be aimed at achieving some accomplishments on the economic front ahead of its ruling party’s congress slated for next year.
The Workers’ Party of Korea plans to convene the first congress in more than three decades in early May where the North may unveil a new line of policies.
The North’s move to foster logistics in the port of Rajin is also likely to lend support to a trilateral project which calls for the shipment of Russian coal to South Korea via the North’s port, experts said.