Wednesday, September 25, 2002

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WHAT'S GOING ON IN PYONGYANG?: In the past week, the North Korean regime has apologized for abducting Japanese citizens in the 1960's, and has announced plans to open up an "autonomous capitalist investment zone." Could the DPRK really be on the path to reform?

The New York Times seems to think so. I'm more skeptical [We're shocked!! Shocked!!--ed.] It's clear that the North Koreans want foreign direct investment. What's not clear is whether Kim wants more FDI to reform the economy or to support his own clique of supporters. Special economic zones can be used in one of two ways -- either as a first step to more general economic liberalization, or as a way to blunt pressures for such an general opening while enriching key political supporters. The last time the DPRK regime tried this, it was clearly to enrich political supporters. The fact that this time around, "the government will build walls around the city to control access by North Koreans" doesn't bode well for the reform thesis.

posted by Dan on 09.25.02 at 10:25 AM