North Korea: Open For Business

Via Foreign Policy, an interesting look at Rason, a special economic zone far from the police state in Pyongyang:

For the few who have ever been to North Korea, it might be a familiar feeling: that of being inside a country, while at the same time feeling outside of it. Visitors stroll through the streets as if they are stuck inside a huge transparent sphere. Foreigners manage to break through that barrier only rarely, and if so, only for brief moments. These breakthroughs are what visitors speak about with excitement: how they raised a shy smile from a child; how one of their assigned guides finally opened up after a long night of drinking and provided a glimpse into his personal desires and worries.

In the West, North Korea is mostly seen in surreal images of its young leader Kim Jong Un, goose-stepping soldiers on Pyongyang’s Kim Il Sung Square, or dangerous rockets and starving children. The country of 25 million people does not easily show its real face; xenophobia, nationalist pride, and the state’s tightly controlled media stand in the way. In my 23 years of alternatively living in, visiting, and following North Korea, I can recall only a few moments when I did not feel isolated from the North Koreans around me.

So my September 2014 visit with a small group of Western tourists to the Special Economic Zone of Rason, in the northwest of the country near the Chinese border, was mind-boggling.

Here is what North Korea could be, even without risky reforms: more open, more human, more approachable, more honest, and much more interested in business cooperation with foreigners. No insulated rubber sphere.

The visit started with the feeling of leaving the country. I passed a checkpoint into Rason that reminded me of a state border.  

At first glance, there is not much to be seen — which makes it fascinating. Although Rason has been a special zone since 1991, it’s a part of North Korea that looks, smells, and feels like the original: on the drive into the city we saw bumpy roads, villages with low white buildings, kitchen gardens, surrounding walls, and long wooden chimneys. In the city, which has a population of roughly 200,000, oxcarts passed by, children with red scarves marched to school, and everywhere could be seen slogans glorifying the “Great Sun of the 21st Century, Comrade Kim Jong Un” and the ruling Korean Workers’ Party’s “military first” policy. Two bronze statues of Kim Jong Il and Kim Il Sung were under construction. Long chains of red pepper dried in the warm September sun — in the winter, residents will use them to make kimchi, a staple dish of fermented cabbage.

That Rason appears much like other parts of North Korea stands in stark contrast to the Special Economic Zone at Kaesong, near the South Korean border. There, 50,000 selected North Korean women are brought in by buses in the morning to work at South Korean factories and then returned to their living quarters outside the zone in the evening. It felt like a zoo.

In the central town square of Rason stood a huge television screen. Like the one in front of the Pyongyang railway station, it showed the state TV news and occasionally a movie. In the evening, people sat on the ground and watched. Could we take photos, I asked? After five days in Pyongyang and other tourist destinations we had grown accustomed to the prohibition of taking photos from the bus. In Rason, however, our guide told us, “Take photos as you wish.” (With official permission to take pictures, it was almost no fun anymore.)

Around the square little stalls sold food and drinks.

Surprisingly, our guide allowed us to sit among ordinary people who have not been brought here for a “spontaneous party” with foreigners. Rather than run away, they gave me curious looks, and then broad smiles and excited conversation after I told the waitress in Korean that I spent a semester at Pyongyang’s elite Kim Il Sung University in 1991. I sat among these North Koreans with a strange feeling of happiness — and I think how sad it was that I felt so excited about something that would be normal in the rest of the world.

The next afternoon, we visited the local open market — an experience the capital no longer offers for foreigners. Only in 2004 was I allowed to visit Pyongyang’s Tongil street market, and my guides rushed me through. In Rason we got two hours, but no photos this time.

At the entrance to the market, a group of women who seemed to lack a proper permit quickly folded up their wooden boxes with cigarettes and fled as soon as they spotted a man in uniform. After we passed through the entranceway, a huge area opened up in front of us, roughly the size of a soccer field, most of it indoors. The lanes of the market were closely packed with women selling items ranging from fresh fish to refrigerators. The fruit corner offered pineapples, bananas, nectarines, grapes, and more — a selection that would have made an East German’s heart miss a beat. 

The prices are hefty; a pound of bananas costs just under a dollar. All goods seem to be imported from China, and all transactions are made in Chinese renminbi. They also accept the local currency, one of the traders told me, but only at what is known in the West as the “black-market rate.” (But in contrast to Pyongyang, where tourists are stubbornly quoted an unrealistic 132 won to the euro, a Rason bank offered the far more reasonable 10,476 won to the euro.)

The openness continued. During my visit to a textile factory, the manager answered all of my questions frankly, including about the wages of his seamstresses. He pays them roughly $80 a month, depending on performance. Try asking that question in Pyongyang and you’ll get nonsensical numbers in response. While I was still trying to get used to receiving real answers, the manager asked whether we noticed that the ski suits they were producing had a tag saying “Made in China” sewn into them. We nodded; he explained that this must be done so his client can sell them in South Korea. This is nothing new; I have seen “Made in Italy” suits produced in Pyongyang. What is different is that people in Rason were open about it.

I left Rason with a sense of excitement about what is possible in this isolated country. In November 2013, the Presidium of the Supreme People’s Assembly, a top government body, announced the establishment of 13 new special economic zones spread throughout North Korea.

But for Rason to become a model, it has to be successful, and overcome the concerns of skeptical cadres. Many observers agree that an economic opening of North Korea would help solve many problems — including security, human rights, and humanitarian issues — in a sustainable way by making the country a stakeholder in peace, with international recognition. Nonetheless, it seems that most of the world has decided to ignore Rason. North Korea has decided to open up, but nobody seems to care.

This entry was posted on Wednesday, November 19th, 2014 at 5:38 pm and is filed under North Korea.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

Comments are closed.

Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.