Rason Special Economic Zone: In a surprising turn of events, North Korea’s Rason Special Economic Zone, once a bastion of limited capitalism, is emerging as a focal point for the country’s deepening cooperation with Russia, leading experts to speculate about potential arms shipments for the war in Ukraine. Established in the 1990s as an experiment in limited capitalism, Rason was a thriving destination for North Koreans until tighter sanctions and pandemic-induced border closures stifled trade and tourism.
Recent developments suggest that Rason is on the cusp of a comeback. Ships have docked in the area for the first time since 2018, and satellite imagery indicates increased trade activities both from the port and a rail line connecting to Russia. While China, with its larger economy and historical ties, might seem the obvious driver for Rason’s recovery, experts argue that North Korea’s burgeoning collaboration with Russia may wield more immediate influence.
Jeong Eunlee, an expert on North Korea’s economy at South Korea’s government-run Korea Institute for National Unification, suggests that the deepening ties between North Korea and Russia, particularly against the backdrop of the Ukraine war, could lead to increased Russian tourism in North Korea, potentially revitalizing tourism in Rason. Additionally, Russia could leverage Rason to sell coal, oil, and flour, fostering economic exchanges.
Russia’s influence in Rason is already manifesting, as evidenced by the resumption of oil exports to North Korea in December 2022 and the export of refined petroleum by April 2023, the first such shipments reported since 2020. The Russian Federal Customs Service has temporarily suspended the publication of foreign trade statistics, adding a layer of opacity to these transactions.
While China remains the dominant player in North Korea’s overall trade, accounting for 97% in 2022, Russia’s renewed engagement is notable. Russian wood cut by North Korean loggers, for example, could find its way to China through Rason, creating a potential economic loop. Cho Sung-chan of Hananuri, a South Korean nonprofit, envisions a growing Russian influence in Rason, suggesting that a prolonged “honeymoon period” between North Korea and Russia could result in substantial Russian support for food, energy, and infrastructure through Rason.
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The military angle adds complexity to Rason’s evolving narrative. Since August, Russian ships linked to the country’s military logistics system have visited Rason’s port, raising suspicions of military supplies from North Korea to Russia for the war in Ukraine. The Kremlin denies such shipments, but reports suggest that North Korea may have sent containers suspected of carrying artillery shells and possibly short-range missiles to Russia.
The recent activity in Rason’s port and rail links to Russia has fueled speculation about military logistics, with South Korean officials indicating that North Korea may have sent containers with military equipment to Russia. The port has seen increased visits from Russian ships, suspected to be linked to military logistics, according to satellite imagery.
The implications of these developments extend beyond economics. Rason, designated as a special economic zone in 1991, has been a focus for attracting foreign investment. It is North Korea’s oldest and largest economic development zone, featuring one of the country’s first and largest markets. Notably, it was the only place where buying and selling homes were legalized in 2018.
The strategic importance of Rason is further underscored by North Korean leader Kim Jong Un’s discussions during his September 2022 visit to Russia. Talks centered on restarting a stalled joint logistics project in Rason, constructing a new road bridge connecting it with Russia, and securing additional grain supplies.
As Rason stands at the crossroads of economic recovery, potential military logistics, and geopolitical maneuvering, it presents a complex picture. Whether it’s a resurgence driven by Russian collaboration, a military logistics hub, or an economic lifeline for North Korea, Rason’s evolving role captures the intricate dynamics at play in this isolated nation.
Our Reader’s Queries
What is the special economic zone of Rason?
Established in the early 1990s by the North Korean government, the Rason Special Economic Zone (formerly known as the Rajin-Sonbong Economic Special Zone) was created to attract foreign investment and stimulate economic growth in the region. This zone is strategically located near Rason and has been designed to offer a range of incentives to foreign investors. With its unique features and benefits, the Rason Special Economic Zone has become a popular destination for businesses looking to expand their operations in North Korea.
What are the 4 special economic zones in China?
Deng’s most notable reform was the creation of four “special economic zones” in China’s Southeastern coast. These zones included Shenzhen, Shantou, and Zhuhai in Guangdong province, as well as Xiamen in Fujian province. This move was a significant step towards modernizing China’s economy and promoting international trade.
Where is the free economic zone in North Korea?
The Rason Special Economic Zone, formerly known as the Rajin-Sonbong Economic Special Zone, was created in the 1990s with the aim of boosting economic development in the area by attracting foreign investment.
What are the special economic zones in South Korea?
South Korea currently boasts 8 free trade zones as of 2021, strategically located in Incheon, Busan, Gwangyang Bay, Yellow Sea, Daegu-Gyeongbuk, Hwaseong, Jeju, and Pohang. These zones provide a plethora of advantages to businesses, such as lowered tariffs, simplified customs procedures, and streamlined regulations. With these benefits, companies can easily expand their operations and increase their profitability.