Date: Sat, 1 Nov 1997 19:42:38 -0500 (EST) From: louisgodena-AT-ids.net (Louis R Godena) Subject: M-I: DPRK to open new trade zones With the aid of the Chinese government, North Korea has unveiled plans to turn two coastal cities -- Wonsan and Nampo -- into special economic zones designed explicitly to attract foreign capital. The two cities, the first to be awarded this status since the northern cities of Rajin and Sonbong were so designated back in 1991, face the Sea of Japan and the Yellow Sea, respectively. Both will receive the same preferential treatment as their predecessors. This means that the cities' special zones are likely to offer tax breaks on imports, long-term leases on land and asset protection, in addition to income tax cuts and permission for foreigners to operate independently. But it is not certain whether three new incentives introduced in Rajin and Sonbong in June will be available in the new sites. These permit the substantial devaluation of the North Korean currency, the setting up of free markets and the operation of independent businesses aimed at the North Korean people. A lack of infrastructure has meant that Rajin and Sonbong have attracted no more than 32 million in total investment so far, despite being opened up to foreigners as long as six years ago. By contrast, both Nampo and Wonsan have relatively good infrastructure, particularly their port facilities. Geographically, they are poised to become a potential trade hub with the rest of Asia. Significantly, both of the new designees are, unlike their predecessors, a good distance from the borders of both Russia and China, and their newly-acquired "liberal" influences. This new move may mean nothing more than an indication of where the new Party secretary, Kim Jong il, is headed after his election in early October. On the other hand, it may be a tentative second step in the modernization of the *Juche* idea, leavened this time with the carefully prescribed infusions of foreign capital in a country reeling from its seventh straightt year of economic decline. Louis Godena --- from list marxism-international-AT-lists.village.virginia.edu ---
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