Study On DPRK’s Foreign Economic Cooperation

As the result of special state system,DPRK has been detached from the international system since the end of the Cold War,and due to its persistence in the development of nuclear weapons and long-range missile,it has been severely sanctioned by international community for a long time and the national economy is struggling.However,unlike many western countries’ expectations,economy of DPRK has not collapsed at all,but has seen a certain degree of growth,it shows that DPRK’s economic system has its own particularities and inherent motivation for growth.Although North Korea has a planned economic system,the foreign economic cooperation played an import role for the development of DPRK’s economy.For a long time,in the research of the Korean Peninsula affairs and the DPRK issue at home and abroad,there is few about the foreign economic cooperation of DPRK.It is largely due to the fact that DPRK’s “isolation” system that fails to get specific data and data,which is also partly due to the specific political and economic system that makes the analytical paradigm of mainstream economics not entirely applicable to DPRK.This paper tries to combine the DPRK’s style socialist construction theory and western economics theory,hackle the DPRK’s foreign economic cooperation process,analyze of the main characteristics,the overall cooperation way,the related industries,and with the “Rason economic and Trade Zone” and ROK-DPRK “Kaesong Industrial Park” as the examples,make the overall evaluation and prospect with the DPRK’s foreign economic outlook of cooperation.From the view of theories,“Juche Idea”,“Songun Policy” and “Kimilsungism”“Kimjongilism” are the unique national development guiding ideology of DPRK,and they are also the guidline of DPRK economic construction and foreign economic cooperation.“Juche Idea” required clearly that DPRK establish “self-supporting national economy”,and the foreign economic cooperation under the idea need to support “elf-supporting national economy”.“Songun Policy” gave priority to the defense industry,with the spirit of “march of hardship” to develop economy,serve to the military priority.“Kimilsungism” “Kimjongilism” inherited the spirit of “Juche Idea” and “Songun Policy”,and with it the government proposed the “nuclear economy translational rout”,further enhancing the importance of foreign economic cooperation.In comparison,in explaining the economic cooperation of the DPRK,the western economic theory has an inadequacy.Because of the unique political and economic system,and strictly blocked economic data,market-based mainstream economics is lack to explain the DPRK very well.Therefore,from the perspective of the concept of Korean socialist construction,we can understand the logic of DPRK ’s foreign economic cooperation.Combined with western economic theory,it can provide a comparative perspective for the research of DPRK’s foreign economic cooperation and examine the limitations of DPRK’s foreign economic cooperation from an international perspective.The evolution of DPRK’s foreign economic cooperation has gone through four stages,DPRK’s foreign economic cooperation in the the Cold War(1948-1991),in the background of eastern and western opposition,it mainly refered to the economic cooperation between Korea and China,the Soviet Union,the Eastern European socialist countries and the few capitalist countries.The barter trade and the assistance of the socialist countries to the DPRK constitute the main content of the foreign economic cooperation;DPRK’s foreign economic cooperation in the early Post-Cold War(1991-2000),it mainly refered to DPRK was forced to carry out a diversified way of trade to meet the challenges,and facing the foreign economic cooperation is severely shrinking,in the background of disintegration of the Soviet Union,the death of Kim Il Sung,and the natural disasters of successive years;after “march of hardship”(2000-2011),it mainly refered to in the situation of the improvement of the environment at home and abroad,the foreign economic cooperation of DPRK gradually began to recover,DPRK payed more attention to the foreign economic cooperation,especially the establishment of special economic zones,which opened a new mode of foreign economic cooperation discover;since the Kim Jong-un came to power(2011-now),DPRK has expanded the scope of foreign economic cooperation,continue to establish economic development zones,take measures to expand trade,and these measures made DPRK achieved continuous growth for several years,however,because of the constant intensification of nuclear weapons and missile problems and the increase of international sanctions,DPRK ’s foreign economic cooperation was getting into a difficult situation after 2017.From the whole evolution of DPRK ’s foreign economic cooperation,there are three major characteristics of DPRK’s foreign economic cooperation,“Having a nature with strong planned economy”,“Highiy obey the needs of the national strategy”and “Long term affected by international economic sanctions”.Trade,foreign direct investment,and international assistance are the main mode of DPRK foreign economic cooperation.Among them,trade constitutes the main content of DPRK foreign economic cooperation,which is the main source of foreign exchange and technology transfer,and opened the situation of DPRK’s foreign exchanges.The FDI is the desired way for DPRK to break through the dilemma of domestic economy,the entry of foreign capital has also improved the DPRK’s economic structure and quality of the DPRK to a certain extent,and has played a good demonstration effect.However,because of its weak economic foundation,rigid political system,continuous experiments of nuclear weapons and missile and the subsequent international sanctions,no major breakthroughs have been achieved.Besides,the international aid also the main mode of DPRK’s foreign economic cooperation.However,due to the influence of the political and security situation,international aid to DPRK is mainly concentrated in the humanitarian aspects.The lack of large-scale economic assistance which can promote its economic growth was also limited the effectiveness of international aid.The effect of aid to DPRK was minimal,it limited in improving citizen’s living conditions and maintain the stability of social order.The international aid towards DPRK is also enslaved by severe international sanctions,it mainly concentrated in the humanitarian,lack of its economic development assistance to promote,its effect is limited to a certain extent improve the DPRK’s residents living conditions,to maintain the stability of social order.The industrial distribution of DPRK’s foreign economic cooperation is mainly concentrated in mining,export processing,international tourism,labor export and newly developed exhibition economy.The mining industry is one of the pillar industry of DPRK’s foreign economic cooperation,and the ore export revenue accounts for the highest proportion of total foreign exchange income.But the ore exports are facing a huge impact on the domestic mining technology and infrastructure conditions,as well as the factors of international sanctions.Export processing industry is the most diversified industry in the DPRK’s foreign economic cooperation.It not only involves product exports,but also includes the introduction of technology,equipment,personnel,and management experience,which can more fully promote the development of the domestic economy.International tourism industry is an emerging industry of DPRK’s foreign economic cooperation.The DPRK government has newly opened four tourism economic development zones and launched a wide range of tourism products,however,because infrastructure and supporting services are lagging behind seriously,tourism routes and business concepts are too old,and the deterioration of the international image,resulting in limited number of tourists,and the effect of earning foreign exchange is not obvious.Thanks to relatively cheap and highly-qualified labor force,the labor services export became one of the dominant industries of DPRK.It has developed steadily over the years,but also begun to suffer from international sanctions.In addition,in recent years,DPRK also actively organized various kinds of international merchandise exhibitions.DPRK hopes to promote the development of international trade and strengthen interaction with the world economy,also achieved certain results.DPRK also tried variety of modes of foreign economic cooperation,the most typical is the China-DPRK “Rason economic and Trade Zone” and ROK-DPRK “Kaesong Industrial Park”.“Rason economic and Trade Zone” is a pioneered model of joint development and management between the two governments,under the platform of the joint administration committee of the China and the DPRK Office,Chinese enterprises participate with funds,technology,equipment,and the DPRK participate with land,resources,facilities,and various types of franchise rights.The development of the Rason zone has introduced the idea of market economy and more advanced management experience for DPRK,which has brought about a positive impact on the development of the Rason area the development of foreign economic cooperation.While the Kaesong Industrial Park is a new model of government-enterprise cooperation.DPRK government and the Hyundai Group of ROK jointly construct and manage the industrial park,and attracting SMEs of ROK to settle in.The operation of the Kaesong Industrial Park promoted employment and economic development in the Kaesong area,invigorated economic cooperation between the DPRK and South Korea,also became the landmark of the DPRK-ROK relations.In addition,after Kim Jong-un took office,he launched a new round of plans for the construction of 23 economic development zones.Kim hopes to use this to promote DPRK’s foreign economic cooperation and accelerate domestic economic.But most of them are still stops on the paper,but it explored the way to the model of the Korean Economic Development Zone.Overall,foreign economic cooperation is the most dynamic component of DPRK’s economy,which brought the foreign exchange,energy,technology,and management experience to the country to promote the integration and development of domestic economy directly or indirectly;the development of foreign economic cooperation,made the improvement of domestic economic policies,and the concept of market economy has been increasingly permeated into all aspects of DPRK’s social life,and it also provides an endogenous growth impetus for the DPRK economy.However,due to increasingly severe international sanctions,the DPRK’s foreign economic cooperation is almost at a standstill and stagnation,it also has a huge impact on the economic development of the DPRK,which limits its sustained and effective development.If the issue of nuclear weapons and missiles about North Korea has made positive progress in solving,the sanctions against the DPRK of the international community has lifted or partially lifted,the DPRK’s economy will enter a new stage,the prospects of foreign economic cooperation will be better.And DPRK may play more active role in Northeast Asia regional economic cooperation,multinational infrastructure and international industrial capacity cooperation and building China-Russia-DPRK economic corridor.