Comment
0
Tweet
0
Print
RSS Feeds

Economic experiment shows limits of NKorean change

Tuesday - 12/10/2013, 3:30pm  ET

In this Thursday, Nov. 7, 2013 photo, the North Korean caretaker of the Pipa Island, attached to the coast of Rajin, North Korea, stands near a tourist sign in the Rason Special Economic Zone. Last month, North Korea announced plans to create economic zones in every province. The North also recently laid out new laws to facilitate foreign tourism and investment. The laws provide investors with special incentives and guarantees, while giving local leaders greater autonomy to promote themselves and handle business decisions. (AP Photo/David Guttenfelder)

ERIC TALMADGE
Associated Press

RAJIN, North Korea (AP) -- Many of the ways in which this dusty, windswept area differs from most of North Korea are easiest to see at night.

Although there are traffic lights in other cities, the ones here in the Rason Special Economic Zone actually light up. The avenues are broad and paved, and along the main street, colorful, decorative lights outline the edges of buildings. Foreign-owned or funded industries and businesses including a casino -- one of only two in the whole country -- have helped create an oasis of light in an otherwise inky black and largely empty countryside.

The zone, some two decades old, is intended to be a petri dish of capitalism, and North Korea's leaders plan to expand the experiment all over the country. It isn't the only one of its kind in North Korea, but it's the oldest, most vibrant and, experts say, the most promising.

Last month, North Korea announced plans to create economic zones in every province. The North also recently laid out new laws to facilitate foreign tourism and investment. The laws provide investors with special incentives and guarantees, while giving local leaders greater autonomy to promote themselves and handle business decisions.

But it's unclear how far Pyongyang is willing to go. The North has shown no willingness to abandon its nuclear weapons program to get out from under international trade sanctions. And Monday's announcement that Jang Song Thaek, the country's No. 2 leader and reportedly a supporter of Chinese-style economic reforms, has been purged for corruption adds uncertainty to its intentions.

A look at Rason suggests that -- even with top-level support for the zone experiment -- it is not so desperate to revive its moribund economy that it will risk major changes that might jeopardize the political status quo.

Officials allowed The Associated Press to visit the zone but denied access to some areas, including what might be the front line of North Korean grassroots capitalism: a bustling public bazaar where small-time entrepreneurs rent stalls from the government to hawk their wares in a decidedly free-market style.

In appearance, Rason remains in every way an outpost city -- albeit one that is better off than most in the North. Its showcase enterprises -- the Sonbong Textile Factory, a seafood processing plant, a sprawling but seemingly yet-to-open chemical production complex -- are hardly cutting-edge or transformative.

In room after room at the textile factory, row upon row of workers, almost all of them women, toil silently at sewing machines below plastic sunflowers and big blue posters that say simply, "Without a Rest." No words are spoken. Rarely is an eye raised from the task at hand.

This year, the factory will produce 1 million pieces of clothing, twice its output just five years ago, said Pak Mi Kum, a no-nonsense woman who worked for 10 years as a seamstress before becoming manager. Chinese contractors supply the raw materials, then take the finished goods home for sale or export, tagged "Made in China."

"It's hard work. So hard the Chinese don't want to do it anymore," Pak said. "But our workers do it for the country. They are efficient, cheap and they work hard."

The Rason SEZ combines two small cities, Rajin and Sonbong, just a short hop from the Chinese and Russian borders. It's been around since the early 1990s, when international relations appeared to be improving slightly, but they have since sputtered over North Korea's nuclear program.

Rason now hosts 150 foreign companies from 20 countries. Experts say North Korea's lack of commitment to establishing a legal framework and financial guarantees has discouraged more investment.

Some signs of foreign interest are easy to spot. A Russian restaurant called New World opened in June, though cook Luboby Ebseyebna said the number of Russians has dropped dramatically since the completion of a railroad project in September.

Farther out along the coast sits the revamped five-star Emperor Hotel and casino, replete with blackjack tables, karaoke and massage rooms. Hong Kong money is behind that one, and it is generally populated by Chinese gamblers.

But that isn't the Rason officials want the world to see. Requests to go inside the Emperor are denied. Instead, they offer a grand, optimistic spiel in the conference room of the Pipa Tourist Hotel.

It begins with a short video presentation after Kim Yong Nam, the first vice chairman of the Rason Economic and Trade Zone Administrative Committee, and Kim Hyong Pil, head of the Rason Investment Service Office, take their seats in large overstuffed armchairs.

   1 2  -  Next page  >>