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N. Korea tries to reinvent itself

SEOUL--The odds of North Korea reaching a level of prosperity on a par with industrialized nations in just a decade would seem to be remote.

But that is precisely what North Korea is setting out to do with its 10-year State Strategy Plan for Economic Development trumpeted Jan. 15 by the state-run Korean Central News Agency.

It is the first long-term economic goal to be announced by the reclusive country in at least two decades.

Pyongyang is calling for the creation of a new government office to oversee the development of infrastructure, agriculture and power generation.

The immediate goal is for North Korea to open the gate in 2012, the centenary of the birth of the nation's founder Kim Il Sung, to becoming a "strong and prosperous nation." In 2020, it aims to have fully industrialized.

These are heady goals given the country's history of famine, its lack of openness, international sanctions and the standoff over the country's nuclear and missile programs.

Nevertheless, Pyongyang apparently aims to attract foreign capital to pave the way for a succession of power to Kim Jong Un, son of current leader Kim Jong Il.

Many experts here on North Korea have noted that the plan lacks specifics.

Some view the program as just a collection of new promises aimed at glossing over the regime's failure to fulfill previous pledges.

The central driving forces behind the 10-year plan are construction of infrastructure, enhanced production in agriculture and electric power, and development of rural areas.

But the plan makes no mention of what level of achievement North Korea considers to be on par with developed nations.

Cho Bong-hyeon, a researcher at South Korea's Industrial Bank of Korea Economic Research Institute, noted that the plan focuses on 12 policy areas.

These include development of the agricultural sector; production of 30 gigawatts of electricity; construction of ports, airports and 3,000 kilometers of highway, as well as construction of commercial distribution centers in five locations, including the economic deregulation zone of Rason, on North Korea's northeastern coast, and Sinuiju, a commercial city in the country's northwest.

The total investment in the projects is put at $100 billion (about 8.2 trillion yen). Pyongyang intends to raise funds through foreign investment by exempting foreign businesses of corporate taxes and providing government assurances to businesses.

According to Seoul's Unification Ministry, the last time Pyongyang unfurled a state development plan of this scale was when it issued its third seven-year plan covering 1987 through 1993.

The latest plan has kept North Korea watchers guessing about Pyongyang's intentions.

The Unification Ministry views it as an attempt to provide a blueprint for North Korea's development ambitions to draw economic concessions and assure a smooth transition of power.

Pyongyang has been trying to create the illusion of grand economic achievement to justify the transition of power by repeatedly pitching various programs to draw investment, including reviving development in Rason which had been halted, and setting up a state development bank.

Officials said the 10-year plan and the creation of a state General Bureau for Economic Development are extensions of these strategies.

"North Korea needed to present some form of future vision in pushing forward the hereditary succession," said one South Korean government source. "But whether that (vision) can be achieved is a different matter."

Cho of the Industrial Bank of Korea agreed that North Korea "will not likely be able to gather the necessary funds on its own."

"With one year left before Pyongyang opens the gate to a strong and prosperous nation, it still does not have any strong achievement that it can boast about to the public. So it had no choice but to bring up a new goal," Cho said.

With international sanctions choking off the flow of capital, China is one of the few countries North Korea can rely on for its economic existence.

Beijing, which has a keen interest in access to the Sea of Japan for products from its landlocked eastern region, has recently been cooperating in development of Rajin Port and roads linking China's Jilin province with the North Korean coast.

Last summer, a new distribution center began operations in Rason, located several dozen kilometers from Rajin. The facility was set up through a joint venture formed between Merry Co., a South Korean food processing company, and a North Korean entity with a Chinese entity serving as a go-between.

More than 100 Chinese and North Korean trucks enter and leave the 50,000-square-meter facility each day, many filled with construction supplies such as lumber and stone.

"Interest is high among Chinese government officials and businesses, particularly for the construction of hotels and other tourism-related opportunities," said Chung Han-gi, president of Merry Co. Chung quoted a Chinese official as saying that a development boom of sorts was spreading in Rason.

However, an official at the Korea Institute for National Unification warned that for now, "There are no visible signs of investment from countries other than China."

Since sanctions were implemented following the March 26, 2010, sinking of the South Korea corvette Cheonan, which killed 46 sailors, trade between North and South Korea in 2010 dropped significantly, as well as government assistance.

South Korean researchers say North Korea's food production in recent years has fallen short of the country's needs by more than 1 million tons. Moreover, the situation has not improved.

Dong Yong-sung of the Samsung Economic Research Institute said the latest economic plan appears to be an attempt to create "a sense of relief" among the masses as the government prepares a new leadership.

"But the contents are basically a rehashing of old targets and goals. The plan underlines how few cards Pyongyang has in rebuilding its economy," Dong said, adding that the introduction of 2020 as a target year was simply pushing back the deadline.

source: www.asahi.com/english/TKY201102070257.html
Tags: north korea, political news
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