North Korea

North Korea seeks to set up new special economic zones with foreign help

North Korea sets up a special group to help potential foreign investors, who remain reluctant to pour their money into the country

PUBLISHED : Thursday, 17 October, 2013, 12:00am
UPDATED : Thursday, 17 October, 2013, 2:48am

In a bid to bolster its laggard economy, North Korea plans to set up new special economic zones and has created a group to assist potential foreign investors, state media and the organisers of a rare international conference in Pyongyang said.

Ri Chol Sok, vice-president of the newly formed Korea Economic Development Association, which was hosting the two-day conference, said the zones "are already starting to be organised all over the country".

The meeting began yesterday with academics and experts from 13 countries - including the US, Canada, India, China, Malaysia and Vietnam - and 60 North Korean participants.

North Korea is still regarded as too risky by many businesses, but has had its eye on expanding its use of economic zones since at least June when it announced foreign investors would be given preferential treatment for land use, labour and taxes.

North Korea, which is one of the world's poorest countries, officially follows a rigid planned economy, but authorities have tolerated unofficial capitalist activities for years. It has experimented with special economic zones as a means of encouraging foreign investment since the 1990s.

The longest-running example is the Rason Special Economic Zone in the far northeast of the country.

While Pyongyang has shown new signs of trying to reform its economy over the past year and a half, it has also continued to maintain state control. Instead of "reform" or "change," North Korea referred to the free-market style changes last year as "new economic management methods".