Economic Opening of the Hermit Kingdom: Current Status and Future Tasks of the New SEZs in North Korea

Establishing new SEZs, along with improving foreign relationships, is treated as the most important policy measure for opening the North Korean economy. Recently, North Korea has shown its interest in promoting two new SEZs, the Gaeseong industrial park and the Shinuiju special administrative region. Thanks to their locational merits, Gaeseong and Shinuiju have the potential to develop into thriving SEZs through subregional economic cooperation with bordering areas. Although the path toward success for North Korea's new SEZs is full of hurdles, it would result in a major boost to the country's economic rehabilitation and create a spillover effect for the rest of North Korea. In this context, this article examines the issues regarding North Korea's new special economic zones. It presents the recent progress and institutional arrangements of the Shinuiju SEZ and Gaeseong industrial park, while also exploring their potential to facilitate North Korea's economic rehabilitation and inter-Korean cooperation. This article also endeavors to address major problems that North Korea needs to resolve in order to activate its new SEZs.