North Korean academic journal suggests conditions for attracting foreign capital

Institute for Far Eastern Studies (IFES)
2014-1-23

North Korea is promoting stable “political and military environment” as a necessary component to attract foreign investment and regional development through advancement in economic development zones (EDZs).

The Academy of Social Sciences’ newspaper (November 15, 2013 edition) published an article entitled “The Critical Issues in Advancement of Economic Development Zones to Construct a Powerful Economy.” Five major challenges were identified, which included the “creation of a favorable political and military environment.”

As the newspaper explained, “Investors take into consideration the political and military environment of the countries that they will invest in,” and “our fundamental objective is to ensure stability of investments through favorable political and military environment in the EDZs.” Other important issues raised in the article included the creation of a stable political situation, removal of the risk of war, and strengthening of military power.

This corroborates the reality that North Korea is faced with, as the country must create favorable political and military environment as the Kim Jong Un regime pursues its stated national goals of improving the lives of its people and the construction of a powerful economy.

In his New Year address, Kim Jong Un emphasized the need to improve inter-Korean relations and urged the South Korean government to positively respond to this effort. He also refrained from using confrontational remarks. North Korea seems to be demonstrating a willingness to manage the political atmosphere on the Korean peninsula.

North Korea is seeking to mollify the turmoil that followed the regime’s execution of Kim Jong Un’s uncle, Jang Song Thaek, last month, and to encourage favorable atmosphere necessary for economic development.

In addition, the newspaper described the four other major tasks for the advancement of EDZs: infrastructure maintenance of railway, roads, airfields, ports, power plants, water and sewage, hotels, and postal services; enactment of EDZ laws that take into consideration the interests of the state and the investors; provisions for preferential treatment for foreign investors; and business management and operation that fully take into consideration regional characteristics.

In May 2013 North Korea enacted its new EDZ law and announced plans to install special economic zones across the country. In November 2013 the names of 13 EDZs were announced*, with each one said to be tailored to its own area’s local characteristics and environment.

*NKeconWatch: 14 zones were announced.

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