N. Korea opens port to China, Russia

North Korea recently gave Russia the right to use its Rajin seaport for 50 years and is considering extending China`s 10-year contract signed in 2008 by another 10 years.

China is investing tens of millions of yuan or billions of won in modernizing the Rajin pier it took on lease, Yonhap News reported.

By using the Rajin port, China will be able to ship coal and other export items from its most underdeveloped northeastern provinces which lack transportation infrastructure.

The opening of Rajin is an example of North Korea`s latest moves to offer more trade and investment opportunities to neighboring China and Russia.

Cash-strapped from international sanctions and starved with the worst food shortage in more than a decade, North Korea has increasingly leaned on China for economic aid, stirring speculation about Kim Jong-il`s imminent visit to China.

Sun Zhengcai, provincial party secretary of China`s Jilin, had reportedly introduced a regional development project to Kim Yong-il, chief of the international department under the North Korean Workers` Party, during his visit to the region late last month, saying that "it has opened a new opportunity for cooperation between the two countries in construction of roads and basic infrastructure."

In addition to making Jilin`s coal exports more accessible, the Rajin port could also serve as an export path for Siberian crude oil and natural gas to neighboring countries.

North Korea is also planning to fully open the city of Raseon, formerly known as Rajin-Seonbong, to foreign businesses in six months, Japanese newspaper Sankei Shimbun said yesterday.



Chang Song-thaek, chief of administration at the Workers` Party, declared the plan during a recent trip to Raseon, the newspaper said citing a human rights group called RENK. Chang is Kim Jong-il`s brother-in-law and the country`s second most powerful man.

North Korea upgraded Raseon`s status to a "special municipality" and approved the establishment of an inter-Korean joint venture there for the first time shortly after Kim visited the region in December and stressed the need to expand overseas trade.

Designated as the country`s first free trade zone in 1991, Raseon has failed to attract much investment due to restraints on foreign corporate activity.

North Korea also reportedly plans to develop eight cities including Raseon and Pyongyang into special economic zones and rejoin the Tumen River area development project, supported by the United Nations Development Program, which it quit last November.

The North unveiled through its official media last week a 10-year economic development plan to build infrastructure from foreign investment, which will be carried out by a state development bank and an agency named the Taepung International Investment Group.

Domestically, North Korea is struggling to stabilize food production by offering incentives to those joining the farming workforce.

The Workers` Party said last month that it would provide cash and 120 kilograms of food for families of party staff members volunteering to work on farms, according to a group of North Korean defectors here called the N.K. Intellectuals Solidarity.

North Korea`s food production will fall short of its annual demand by at least 1.2 million tons if it does not receive foreign assistance this year, a South Korean think-tank said.

The state-run Korea Rural Economic Institute said in a report that the North`s food grain output is forecast to reach 3.8-4 million tons this year, larger than the 3.52 million tons estimated by the U.N. Food and Agriculture Organization. The total, however, falls far short of the 5.23 million tons the country needs to feed its population and livestock.

"The size of the shortfall is based on conservative figures, since it assumes the total population stands at 24.3 million and people eat less than the recommended daily intake of food," KREI said.

The latest assessment on demand is based on an average North Korean consuming 1,600 kilocalories of food per day, or 167 kilograms for the entire year. The World Food Program recommends an average diet of 2,130 kcal per person.

(sophie@heraldm.com)



By Kim So-hyun