Foreign businesses are still wary on pouring in investments to North Korea, despite Pyongyang’s efforts to project a sprawling economic environment.
North Korea agreed on developing two economic zones in the northeast and on its western border with China, its closest ally, as part of Kim Jong-un’s attempt to boost the impoverished state’s economy. The young leader, seemingly deviating away from his late father’s ‘way of things’, vowed to make the once isolated state to a “prosperous” nation by 2012. However, North Korea still has to overcome its lack of basic infrastructure that has kept foreign investors far from its shores.
Dalian-based clothing company Dayang Trands chairwoman Li Guilan told Reuters they “might go and have a look” at Hwanggumphyong, an economic zone in the west near the Chinese border. “Investors need first of all to consider the environment. If there’s a problem with the environment, then there’s no way people are going to commit money,” Li said.
The incentives offered by North Korea, such as low taxes and visa free access to at least part of the two zones, fell short of attracting investors. Chinese companies who went ahead with investments are now feeling the ‘risk’ they had taken. According to Asahi Shimbun, Chinese miner and steel manufacturer Xiyang Group, with investments in iron-ore powder, said it was a “nightmare”. Still the Chinese are optimistic, claiming that they are “willing to share our 30 years of experience of reform and opening up with our North Korean comrades,” Deputy governor of Liaoning province Bing Zhigang said.