1.17
Promotion Plan for the Collaboration between South and North Korea through the Open Region in North Korea
북한의 개방지역을 통한 남북한 협력 확대 방안(AR95-3) Soo-Yong Kim
1995. 8․94 pages․Korean
Confronted with the changed order of the world economy and global competition, nations are pursuing economic policies to maximize profit, while participating in the regional economic collaboration system. Though late in coming, North Korea, a devoted communist economy, finally decided to pursue open economy by establishing the Rajin-Sunbong Free Economic and Trade Zone.
However, the open economy policy of North Korea is different from the policies of other communist countries in that only nucleus cities or specialized regions are selectively developed, instead of fundamentally changing the entire economic system. Hence, the effects of the economic exchange are bound to be limited and there exists tremendous uncertainty depending upon the political circumstances. In particular, the ethnic issue plays a critical role in the South-North economic collaboration and exchange, thus, the relationship is distinctly different from the relationships of North Korea and other countries.
The goals of the present study are to analyze the background behind the economic changes in North Korea and decision to open up to foreign countries;
the status and developmental prospects of the Rajin-Sunbong Free Economic and Trade Region, the first Open Region in North Korea; and to explore the investment potential for the Korean companies and the role of the government.
The study results reveal that the labor-intensive light industry, resource development, heavy industry facilities and infrastructure investment are recommended for the Rajin-Sunbong region and government needs to guarantee the autonomy of the companies while allowing the expansion of the permitted investment scale. In addition, investment for the SOC expansion in the Open Region should be carried out after the unification based on thorough review on the investment, while taking the reunification cost into consideration.
