The Tumen Triangle Project: Focus on the Rajin-Sonbong Economic and Trade Zone

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The Tumen Triangle Documentation Project
Sourcing the Chinese-North Korean Border

Focus on the Rajin-Sonbong Economic and Trade Zone
by Théo Clément

 ISSUE Four
December 2016
 SinoNK.com

Download the full text to The Tumen Triangle Documentation Project: Issue Four

The shuttered Kaesong Industrial Complex is by far the best-known of North Korea’s Special Economic Zones (SEZ). However, there are many other special zones in the country, the oldest of the lot being the one at Rajin-Sonbong (“Rason”). Rason is most often depicted in the specialized literature as a failure: an ill-timed, desperate attempt to incentivize foreign direct investment that has been stagnating since 1991. Among the oft-cited reasons for Rason’s allegedly poor performance are its unstable business environment, poor legal framework, a lack of commitment from Pyongyang, and tense ties with foreign countries around the controversial North Korea nuclear program.

This report, based on field research in the Chinese borderlands as well as in the DPRK (at Pyongyang and Rajin-Sonbong), challenges these assertions. First, it gives Rason back its historicity. Opened to foreign investment for more than two decades, the SEZ has had its highs and lows, but these do not match the fluctuations in the rest of the country’s economy, and deserve consideration in their own right.

To achieve this goal, I adopt a “local” approach that focuses on developments in the zone and its direct periphery, and assesses potential differences with the rest of the country’s economy or other SEZs. The introduction of epistemological tools previously unused in North Korean studies and the attention paid to North Korean publications that deal with Rason help us understand, from the DPRK’s point of view, how Rason differs from the rest of the country and provide an alternative assessment of its “successes.”

My main research finding is that, even if zone-specific policies have often been considered too conservative to drive significant economic activity, the business environment of the zone is still indisputably different to that of the rest of the country. I also point out that, while North Korea is often believed to have an unstable business environment, foreign partners (like the international community) have themselves adopted a fluctuating attitude toward Rajin-Sonbong. In response, local or central authorities of the DPRK have tried to adapt themselves to external changes, sometimes directly mimicking international standards and practices.

Since Rason is relatively easy to access, I could gather important data and information regarding economic activity in the zone. However, as in any research there are grey areas where data is missing or where more research is required before drawing conclusions. Quantitative data might be easier to gather in Rason, but not imeasurably so and I am unable, for example, to provide detailed data on investment stocks and flows to the zone. I was also unable to conduct research which required Russian language capacity.

My hope is this report will trigger active debate among scholars on the role of Rason and other SEZs in both the DPRK and northeast Asia’s economy.

Théo Clément
December 21, 2016

The Tumen Triangle, site and source of Théo Clément’s in-depth research. | Image: Curtis Melvin and Gregory Pence

Previous issues of the Tumen Triangle Documentation Project:

Issue 1, Edited by Adam Cathcart and Christopher Green, April 2013.

Issue 2, Edited by Christopher Green, February 2014.

AKS Special Edition, Written by Steven Denney and Christopher Green, January 2015.