Will Rason, the DPRK’s bold experiment to attract foreign investment and introduce a sliver of market oriented reforms, go boom or bust? North Korea has toyed with special economic zones in areas along the Chinese border in the past, but the results have never been transformative or even economically significant—there is still no North Korean Shenzhen, or even a North Korean Dalian, to speak of. In this extended essay, Alan Ferrie, an international economics analyst based in Puget Sound, Washington, assesses the prospects and problems of North Korea’s Rason Economic and Trade Zone and the evolving trade partnerships between North Korea and China and Russia. – Editor
by Alan Ferrie
The government of North Korea has long recognized that the economy of North Korea has been stagnant while the economies of neighboring nations have flourished. If the DPRK indeed desires to commence the transition from a command economy to a market economy based upon the template developed by Deng Xiaoping, Rason is clearly the transformative point that must be observed.
On the surface, the Rason Economic and Trade Zone appears to be North Korea’s primary attempt to initiate this transition from a command economy to a market economy. At the first China Jilin-Northeast Asia Investment and Trade Expo in September of 2005, the Vice Chairman of the Port Authority of Rason City, Mr. Chae Song Hak outlined the program to potential investors. Several basic outlines of the zone follow, juxtaposing Chae’s bullish report in Jilin with more recent information…