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North Korea’s Foreign Investment Strategy Explained

Reading of North Korea’s new plans for yet another trade zone, just as the Kaesong experiment collapses, must make some observers wonder what Kim Jong Il could be thinking: who could possibly expect to attract significant foreign investment with such uneven policies toward investment?

My response: they don’t want to attract significant foreign investment. That would require some significant opening of their economy and the lowering of the state’s vigilance against the subversive power of ChocoPies. North Korea’s foreign investment strategy is much like the strategy of those “Nigerian generals” who send e-mails by the millions asking for bank account numbers. You have to wonder who would possibly respond, but there are always a few, and a few is all it takes.

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  1. Maybe they are just interested in differentiating their “investor portfolio”. So if things run bad with the south, there are still the Chinese and maybe even the Russians in Rason to bring money in.
    The location of this zone might be pretty interesting for the Chinese to give its Jilin Province an economic push by using the port of Rajin to bring goods from Jilin to the international markets faster. So I think, investing money there might be worth thinking to some people (or governments).
    But as this zone exists for nearly 20 years without success it will obviously need some changes to make it work. And change is not what Kim and his guys love most…

  2. According to KCNA:

    “Rason City Designated as Municipality
    Pyongyang, January 5 (KCNA) — Rason City was designated as a municipality.

    The Presidium of the Supreme People’s Assembly of the DPRK said in its decree promulgated on Jan. 4:

    1. Rason City shall become a municipality.

    2. The DPRK Cabinet and relevant organs shall take practical measures to implement the decree. ”

    –So as best as I can tell, all that has happened is that the municipal governments of Rajin and Songbon have been scrapped to create a unified Rason municipal government. Time will tell if there is any greater significance to this story…