[EDITORIALS]The hermit nation peeks out

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[EDITORIALS]The hermit nation peeks out

North Korea has announced the legal framework for a special administrative zone in the border city of Sinuiju. The city will adopt a metropolitan state system, such as that of Hong Kong or Singapore, and operate independently of the workings of the Communist central government. The zone will possess the main governing functions of executive, legislative and judicial branches, lacking only the authority to carry out independent foreign affairs. The disclosure of the plan, coming only two months after the announcement of changes to its economic administration, strongly signals Pyeongyang's intention to dislodge itself from its shell and become the international community's newest member. We welcome the decision as a meaningful stride.

But the success of the economic special zone will hinge on its attractiveness to foreign capital. As the frustrations of the Rajin-Seonbong experiment demonstrate, foreign investors are lured only by appealing prospects. Even under the premise that North Korea can revamp its infrastructure and install sound administrative networks, Sinuiju dims as an inviting destination for investors in comparison to other economic hubs in Northeast Asia. Despite its proximity to China's enormous and emerging market, it is still geographically distant from South Korea or Japan. And as we witnessed during the skirmish off our coast in June, the waters in the West Sea are still highly volatile. Therefore, the problem of securing the western sea route needs to be addressed, in addition to putting together a viable network of roads and railways.

Furthermore, the renovation of electricity plants, ports and road systems, pivotal to attracting foreign investors, can only be achieved by providing a token of assurance and trust to the outside world. The liberty to carry out financial transactions and to make use of original business methods by companies that place their bets on the system is essential if North Korea is serious about wooing advanced capitalist financial and business systems. The indifference of international capital and technology to North Korea's efforts at Rajin-Seonbong in 1990 is due to its failure to introduce such mechanisms. The success of the special economic zone at Sinuiju rests solely on the ability of the North Korean administrators to make good on their promissory note not to undermine a free and efficient network.
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