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North Korea’s special economic zone in Rason

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North Korea’s special economic zone in Rason

The road from China to North Korea’s special economic zone in Rason, in the country’s far northeast, is paved, power substations are being built, railway lines are being linked to routes to Siberia, and piers at the harbor expanded. And this week an international trade fair took place, offering foreign investors and visitors from China, Britain, Russia and elsewhere, as well as journalists from The Associated Press, a glimpse at the efforts to turn a long-neglected, remote region into a manufacturing, tourism and transportation hub.

Over the past two years, North Korea’s leadership has made the bid to transform Rason, which encompasses the cities of Rajin and Sonbong, into an international hub a priority, along with drawing much-needed foreign investment. Last week, Jang Song Thaek, a senior official and uncle of leader Kim Jong Un, led a visit to China to discuss joint co-operation on developing economic zones along the border in an indication that the project has the attention of top officials.

North Korea’s economy has languished in sharp contrast to the booming market economies of its neighbors. Pyongyang has not publicly released detailed economic data for decades, but the CIA Factbook estimates its per capita GDP at $1,800. Outside the capital, Pyongyang, much of the country remains poor, with buildings and roads in dire need of repair, and the United Nations says two-thirds of North Koreans face some form of chronic food shortage.

A government directive to seek foreign business partnerships is a shift in a policy away from the insularity of past decades. Still, doing business in North Korea is a challenge. Most foreign visitors cannot travel freely in and out of the country, drive their own cars or communicate with their local counterparts by cellphone — basics for conducting business anywhere else in the world. Ensuring steady electricity, broadband Internet and access to international banking systems has also proven difficult.

And even longstanding ties with China haven’t guaranteed smooth sailing. Earlier this month, a Chinese firm, the Xiyang Group, warned other companies against investing in North Korea, calling its four-year experience trying to tap into North Korea’s mining industry “a nightmare.”