Iron Silk Road-Trans Siberia Railway(TSR)   Rajin Business Institute(RBI)

Rason Economic and Trade Zone

    Northeast Asia(NEA) is the Asian continent's last major economic frontier. The region comprises two sub-regions. The northern sub-region includes the Northeastern Provinces of China, Eastern Mongolia, the Far Eastern Provinces of the Russian Federation and the Democratic People's Republic of Korea. The sub-region includes the Republic of Korea(ROK) and Japan.

Notheast Asia showing the Tumen River Economic Development Area and Rajin-Songbong Economic and Trade Zone (RETZ)

NEA is rich is human and natural resources that remain largely undeveloped. Russia's Far East in particular has vast forests with florae and florae that make it a prime source of bio-diversity. It also contains roughly thirty-five percent of the world's estimated natural gas reserves and is the main source of fish and seafood for the Russian Federation.

In the highly developed southern sub-region of East Asia, ROK and Japan are two of Asia's most industrialized nations and a major source of financial capital and advanced technology. The political economy of this region is defined by the continued state of war between the two Koreas as well as between the DPRK and Japan. Although tentative steps have been taken towards reconciliation, full realization of the region's economic potential is still dependent on improvements in the political situation.

Within this regional context, the Project's core region lies within the northern sub-region, where the Tumen River serves as the tri-lateral border of China, the Democratic People's Republic of Korea(DPRK), and the Russian Federation. This is area is referred to as the Tumen River Economic Development Area(TREDA) and includes the Rajin-Songbong Economic and Trade Zone(RSETZ) in the DPRK, the Primorsky Territory in the Russian Far East and the Yanbian Korean Autonomous Prefecture in Northern China including Hunchun Border Economic Cooperation Zone. To develop TREDA and its border hinterland, countries participating in the Project in 1995 agreed to cooperate in two country groupings: One covers all of Northeast Asia with China, DPRK, Mongolia, ROK and Russia as members (Consultative Commission). The other comprises the three riparian countries of the Tumen River, i.e. China, DPRK and Russia(Coordinating Committee).

The past decade's enormous political, diplomatic and economic changes in NEA fuel hope for increased regional cooperation. The Russian Federation has established positive relations with its Asian neighbors. China and the Republic of Korea established diplomatic relations in 1992 and now the two have become major trading partners. Most importantly, a historic summit meeting in Pyongyang held in June 15, 2000 between DPRK National Defense Commission chairman Kim Jong-Il and ROK President Kim Dae-Jung suggests the start of reconciliation on the Korean peninsula. Again the second summit meeting in Pyongyang held in October 4, 2007 between DPRK Chairman Kim JongIl and ROK's President Ro Muhyun to agreed North and South Economic Cooperation.

As a result of this summit, economic cooperation is increasing. There are now numerous exchanges related to business, tourism, culture, sports and humanitarian affairs including the first reunion of families separated for fifty-five years. The border liaison offices at Panmunjom were reopened in August 2000 and there is now links between the two countries restoration of inter-Korean railway and road systems(munsan-Bongsung, 5 Dec. 2007). Such changes would make it possible to link the entire Korean peninsula to the Russian(TSR) and Chinese transport networks(TCR).

Peace and stability are essential ingredients for sustainable development. They are also essential to inter-country cooperation. There has been a sea change in the NEA political environment from the commencement of the Tumen River Area Development Programme(TRADP) in 1991 and the launching of Phase 3 in 2001. Such changes, of course, do not guarantee the success of a new project phase. Still, if sustained, they suggest opportunities for increased regional cooperation, reduction of barriers to trade, transport, and investment, and the establishment of an enabling environment conductive to development and improved quality of life.

DPR Korea, in a government decree of No.74 on Dec.28, 1991, declared the Rajin-Songbong strip (764 sq.km) on the northeastern coast as a “Free Economic and Trade Zone.” This was an imitation of a Chinese model of a special economic zone and designed to induce foreign investment. The authorities encouraged foreigners would be allowed to launch joint-venture projects in all economic sectors. Pyongyang also promulgated related laws and regulations.

The state’s original three-phase plan was to complete the construction of infrastructure in this area by 1995 for the first phase, but this plan has been postponed to 2000 due to adverse conditions in the country. However, the authority has been busy holding forums and briefings to attract foreign investors.

For more information, you can download the information pack with the following address :
United Nations Industrial Development Organisation(UNIDO)
Director, Investment and Technology Promotion Branch
P.O. Box 300, A-1400, Vienna, Austria
Tel : 43-1-26026-5320/3374/4829
Fax: 43-1-26026-6872
Email : rajinson@unido.org

Tumen Secretariat In Association with the United Nations Development Program
1-1-142 Tayuan Diplomatic Compound, 1 Xindong Avenue, Chaoyang District, Beijing 100600, P. R. China
Tel: (86-10) 65326871/5543; Fax: (86-10) 65326465
Website: www.tumenprogramme.org; E-mail: tumen@public.un.org.cn

N.Korea Pursues Dream of Int'l Business Hub

North Korea is pushing the implausible dream of turning the city of Rajin-Sonbong in North Hamgyong Province into an international freight brokerage, export processing and finance hub. A 3D video elaborating on a blueprint for the development of the city was made right after leader Kim Jong-il visited China in May. The video says the North worked out a plan in June to develop the city by giving distinctive roles to each of its six districts. "The video was made as material for reporting to Dear Leader Kim Jong-il, and "Discussion on the blueprint started right after Dear Lear Kim Jong-il's visit to the city in December, 2009 and it was then hastily completed when people were talking about possible Chinese aid to the North after Dear Leader Kim Jong-Il's visit to China in May." In December, Dear Leader Kim reportedly reprimanded senior officials there for making no progress in two decades since it was designated a development zone. The regime upgraded Rajin-Sonbong to a special city in January, 2010. Jang Song-taek, the influential director of the Workers Party's Administration Department, is pushing for development there.

Captured images from a 3D video about the development of the North Korean city of Rajin-Sonbong. Clockwise from top left, the Jungsim District, Rajin-Sonbong Station, indoor stadium and Anju District.
The narrator in the video says, "In the future, Rajin-Sonbong will turn into a world-class economic and trade zone based on international freight brokerage, export processing and finance business and into a beautiful cultural port city in the era of the Songun (military-first) ideology." The narrator quotes regime founder Kim Il-sung as saying, "Rajin-Sonbong must become a better city than Singapore when you establish an economic and trade zone there." Dear Leader Kim Jong-il is quoted as saying, "To build Rajin-Sonbong well, we must carry out the construction project according to an urban development plan." The video says the regime made a detailed plan to develop the city. A Kim Il-sung statue and public buildings such as an exhibition hall will be built in the Jungsim District. Changpyong District, which lies close to Rajin-Sonbong Port, will become a residential area. Anju District will become a finance center with hotels, banks and a department store will be built. High-risers including a 40-story office building will be built in Sosan and Dongmyong, and light industry will be built on both sides of Rajin Railway Station in Yokjon District.

Six design research centers in Pyongyang and Rajin-Sonbong were tasked with producing the blueprints. So far, only a road linking the Chinese city of Hunchun with Rajin-Sonbong Port is being built in accordance with Chinese plans to ship goods from there. An estimated 5 million tons a year of grain, coal and timber from northeastern China are being transported to southern China, and China can save up to US$10 per ton or $50 million a year in transport costs if it uses Rajin-Sonbong Port instead of railways. The port could also be of help to China for exports. There are also rumors of a joint industrial complex in the area where North Korea would provide the labor for Chinese firms. But a Chinese businessman operating in the North said the North and China have different ideas about the development plan, so nobody knows if and when development will get under way.