North Korea’s efforts to seek economic reform hampered by regional environment

By Li Dunqiu Source:Global Times Published: 2014-7-28 22:18:01

North Korea has designated six new economic development zones. So far, North Korea has established 19 zones around the country.

This is another new economic measure taken by North Korean leader Kim Jong-un, highlighting his will to seek economic breakthroughs.

North Korea has adjusted its economic policies extensively. In November 2013, the country decided to establish 13 new economic development zones and provide them with security, legal and policy support.

The country also delivered an olive branch to countries that wish to develop economic ties with it.

North Korea's series of policies resemble China's initial stage of its reform and opening-up. They are aimed at boosting national economic development with the help of some economic special zones and technological development zones.

This shows that North Korea is drawing the successful experience of China's economic development and reforms.

In June, North Korea integrated three important financial departments and established the Ministry of External Economic Affairs, hoping to boost decision-making efficiency and speed up opening the economy.

Besides, it began to focus on tourism and develop various tourism packages to attract foreign visitors.

North Korea wants to improve its international image and strengthen communication with the international community. And through this North Korea can also earn some foreign currency.

From North Korean media reports, we can sense the consistent efforts by North Korean authorities to find an economic development path that suits the country.

However, the process of attracting overseas investment in North Korea has not been smooth. Most countries have avoided contact with North Korea, and it proves difficult and slow for its economy to go global.

Why is Pyongyang's integration with the international community so difficult? Can its economic strategy lead to success? Does this depend on the perilous international environment or the country's own development path?

Both factors matter. Nonetheless, given the fact that North Korea is a small country with vulnerable anti-risk capabilities, the international environment is more important to the country.

When China started its reform and opening-up, it had already normalized relations with Western countries such as the US. But North Korea is far from achieving this.

Due to the huge differences between the national conditions of China and North Korea, China's economic development road map does not completely suit North Korea.

During the early days of China's reform and opening-up, those who came to invest in the Chinese mainland were mainly Chinese businessmen from Hong Kong, Macao and overseas areas.

In comparison, North Korea needs to reply on investment from South Korea, but the relations between the two Koreas are restrained by US policies on the Korean Peninsula.

At the same time, North Korea does not have as large a labor pool as China and cannot rely on labor-intensive industries.

However, North Korea has rich mineral resources and forests. How to bring its potential into full play is a test for the North Korean leadership.

In the foreseeable future, Washington is hardly likely to alter its Pyongyang policy. It is China and South Korea which can offer concrete assistance. Whether Pyongyang can achieve economic success depends on its decision-making and diplomatic wisdom. 

The author is former secretary-general of the Chinese Society for the Study of Korean History. opinion@globaltimes.com.cn



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