It was not that Kim Jong Il was uninterested in economic reforms or liberalization, but that given the security nexus surrounding DPRK, he couldn’t.
Whereas Kim Jong Un appears to have taken consistent steps forward with economic reforms, yielding significant progress for North Korea, Kim Jong Il often appeared to take one step forward and one step back, focusing instead on Songun or his military-first doctrine.
But Kim Jong Il visited China several times and toured many of their factories. He also visited their SEZs (special economic zones). The visits inspired him to follow China’s path, using SEZs to spearhead economic liberalization.
In 2002, DPRK passed a law guaranteeing “one country, two systems” for the new Sinuiju Special Administrative Region (currently, Sinuiju International Economic Zone or simply Sinuiju SEZ). Yang Bin, a Dutch businessman of Chinese origin, was put in charge to lead the top administrative unit. Yang put in $100 million of his own money and earned Kim Jong Il’s trust, earning the nickname, “Kim’s adopted son.”
The Sinuiju SEZ was a radical concept conceived by Kim Jong Il and a Yang Bin. Modeled after Hong Kong, it would have a great deal of autonomy. It would have legislative, judicial, and administrative autonomy. Foreign nationals would be free to enter without visas. Foreign currency would be used. Even the15 members administrative cabinet would be composed of 8 foreigners.
Unfortunately, China appears to have derailed the project by jailing Yang Bin who was soon arrested in China on bribery and tax evasion charges and spent 14 years in prison. He stayed in jail even though PRC-DPRK relations revived in 2011 and two Sino-DPRK SEZs of Hwanggeumpyeong and Wiwha were established while Kim Jong Il was still alive.
The truth may never be known, but the Nikkei Asian Review (in Chinese billionaire who plotted with North Korea pops up after 16 years, October 25, 2018) hypothesizes:
China feared that the appearance of a capitalist region on its border with North Korea could destabilize the political and economic management of its northeast.
A traditional heavy industry center, the northeast was being hit by the consequences of China’s admission to the World Trade Organization at the end of 2001 and was desperately seeking foreign capital to boost its competitiveness.
China specifically feared that its northeast would lose badly needed foreign capital to the North Korean side of the border, where cheaper labor was available.
North Korea had been making preparations for the Sinuiju special administrative region project in secret. When China learned about the project, it was furious.
Kim Jong Il had even tapped an ethnic Chinese, without telling the Chinese government, as the top official of the Sinuiju special administrative region. China became suspicious about Kim’s real intentions.
So China crushed the North Korean special economic zone project by taking away its leader.
Around that time, North Korea also admitted to having a uranium enrichment program. Increasing UN sanctions since then, imposed with Chinese participation, have kept foreign participation in the North Korean SEZs largely moribund, with the exception of the Rajin-Songbong (Rason) SEZ.
What an opportunity cost. About 70% of total China-North Korea trade flows through the Dandong-Sinuiju corridor.
Now 55 years old, Yang Bin reportedly resurfaced in Taiwan last month once again promoting the development of Sinuiju SEZ. He met several Taiwanese and South Korean businesses. North Korea is possibly reviving the project with Yang Bin in charge again.
The revival is probably the result of the current peace efforts between not only DPRK and between ROK and US, but also between DPRK and PRC, after the Pyeongchang Olympics. The day when the finished bridge between Dandong and Sinuiju may finally be open may come soon.
Read more at Nikkei Asian Review.
Photo Credit: Reuters.
Clement, Theo. 2016. One More for the Road? New Masterplan for the Sinuiju Special Economic Zone. SinoNK. February 11. https://sinonk.com/2016/02/11/one-more-for-the-road-new-masterplan-for-the-sinuiju-special-economic-zone/