Northern EEZ Zones Would Cost 3 Trillion

The Korea Research Institute for Human Settlements (KRIHS) said in its report titled, “Strategy for Using Special Economic Zones in the Era of Northeast Asian Cooperation” that 3.04 trillion won is needed to create six special economic zones, including the Gaesong Industrial Complex, in North Korea.

The fourth amendment of comprehensive national development plan released on November 7 by the government includes the “development of the Gaesong Industrial Complex and special economic zone in the Nason area,” which is reflected in the report.

In its report, the KRIHS cited 10 areas as the North’s special economic zone to be strategically utilized for the inter-Korean economic cooperation. Among the cited areas are four areas currently under development, including the Gaesong Industrial Complex, Mt. Geumgang Tourism Zone, Shinuiju Special Administrative District, and the Nason Economic and Trade District, and six other areas which are highly likely to be developed into a special economic zone, including Nampo and Wonsan.

Proposal of Ways to Utilize Each of the Six Special Economic Zones-

The report proposed that the authorities nurture the Gaesong Industrial Complex as a stronghold of economic cooperation or special administrative district focusing on technology-intensive industries and tourism in the long term, while utilizing it as a cooperation base for light industry and tourism.

It analyzed that the Mt. Geumgang District should be utilized as a base for the inter-Korean tourism and social-cultural cooperation for the time being and nurtured into a stronghold for international tourism targeting Japan, China, and Southeast Asia at an appropriate time.

It also said that it would be efficient to use the Nason District as an interchange and cooperation base focusing on tourism, logistics, and resource processing in the initial stage and as an international comprehensive logistics base connected with China and Russia in the long term.

Also, the report has it that the Shinuiju Special Administrative District should be developed from cooperation base focusing on small-scale contract processing and tourism to base for trade and logistics business and the machinery industry targeting demand from three provinces in northeastern China. It proposed the Wonsan Special Economic Zone be developed from a center for inter-Korean tourism and small-scale marine product processing complex into a base for tourism, trade, and marine product processing of the Trans-East Sea area, and the Nampo Special Economic Zone from a base for interchange and cooperation of the export processing sector focusing on electricity and electronics to a state-of-the-art technology complex and logistics and trade base with R&D function targeting the Chinese market.

How to Provide Necessary Funds to Develop Special Economic Areas?-

The KRIHS said that one-million-pyeong complex is needed for each special economic area in order for South Korea to utilize the six special economic zones in the North.

It estimates costs at 503.6 billion won for the Gaesong Industrial Complex, 191 billion won for the Mt. Geumgang Tourism Zone, 569.1 billion won for the Nason area, 458.6 billion won for the Shinuiju Special District, 532.4 billion won for Wonsan, and 760.3 billion won for Nampo.

The problem is how to provide fund necessary for the development.

Lee Sang-joon, researcher of the KRIHS, said, “The authorities should cover the cost for the Gaesong Industrial Complex and the Mt. Geumgang Tourism District which are under brisk development from the South Korean government or corporations, while providing funds for the rest of the areas, including Wonsan, Nason, Shinuiju, and Nampo, from the participation of neighboring countries, such as Japan, China, and Russia.”

Jae-Seong Hwang jsonhng@donga.com