North Korea's Policy of Sinuiju Special Economic Zone: Implications and Prospects *

Abstract

In the establishment of the special administrative region at Sinuiju and the promotion of the second SEZ, following internal and external factors worked together: (1) serious economic stagnation, (2) a following step to the 7.1 measures for improving economic management, (3) the success of China's policy of Special Economic Zone, (4) the gesture of opening-door to the U.S. While the first three of four reasons for the background of establishing the Sinuiju SEZ is positive reasons, the fourth one is the negative reason. To speak of it, if the fourth reason is the most important, the possibility that the Sinuiju SEZ was unexpectedly made without any preparation cannot be excluded. The administrative ministrer Yangbin's arrest and confinement show that there wasn't enough tuning with China about establishing the Sinuiju SEZ. Prospects of Sinuiju SEZ need to be predicted dividing into the short term, the mid term, and the long term. For the short term, the achievement of Sinuiju SEZ for an early stage depends on to what extent China (central government, Liaoning Province, and City of Dandong) cooperates. For the mid term, Western enterprises' active approach to Sinuiju SEZ crucially depends on how much the United States lifts the economic sanction against North Korea. For the long term, the prospects of Sinuiju special economic zone depend on the relations between the SEZ and North Korea's whole national economy. Without internal reforms, the simple opening policy can't recover North Korea's economy.