File spoon-archives/marxism-international.archive/marxism-international_1997/marxism-international.9711, message 22


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 



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