North Korea's Rason SEZ: An Economic Revival with Russian Cooperation

Deepening North Korea-Russia Cooperation in Rason SEZ

While China may appear to be the obvious driver of Rason’s recovery due to its larger economy and historic ties with North Korea, experts believe that the nation’s deepening cooperation with Russia may have a more immediate impact. Jeong Eunlee, a North Korea economy expert at South Korea’s Korea Institute for National Unification, suggests that Russia’s closer ties with North Korea, especially amidst the backdrop of the Ukraine war, might lead to increased tourism and trade with Rason. Jeong also highlights the potential for Russia to sell coal, oil, and flour through the SEZ and for North Korean workers to send Russian goods back home for resale.

Shift in Trade Patterns

In 2022, China accounted for 97% of North Korea’s total trade. However, Russia resumed oil exports to North Korea in December 2022 after a two-year hiatus and had shipped 67,300 barrels of refined petroleum to North Korea by April, according to United Nations data. The revival of trade from Rason is of particular interest, as Russian wood cut by North Korean loggers could potentially be resold to China through the SEZ. The influence of Russia is expected to grow in Rason, particularly if the cooperative relationship between North Korea and Russia endures and expands to areas such as food, energy, and infrastructure.

Military Logistics Discussions and Potential Joint Projects

Rason’s port has witnessed visits from Russian ships tied to the country’s military logistics system since August, according to U.S. and South Korean officials and reports by Western researchers citing satellite imagery. Notably, North Korea has sent around 2,000 containers suspected of carrying artillery shells, and possibly short-range missiles, to Russia via Rason’s port. Satellite imagery also identified increased activities at Rason’s Tumangang station, which has rail links to Russia. Notably, during a visit to Russia in September, North Korean leader Kim Jong Un discussed plans to restart a joint logistics project in Rason, including the construction of a new road bridge between Rason and Russia.

The Significance of Rason SEZ

Rason, originally designated as a special economic zone in 1991 by Kim Il Sung, has been a focal point for North Korea’s efforts to attract foreign investment. It is the oldest and largest among the country’s 29 economic development zones. Rason features one of North Korea’s first and most significant markets, was the site of the nation’s inaugural mobile network, and is the only place where buying and selling homes were legalized in 2018. While other economic development zones have struggled due to inadequate infrastructure and international sanctions, Rason continues to hold promise for economic growth and foreign investment.

While economic hopes are rising in Rason, it still continues to face geopolitical challenges and uncertainties. Political dynamics in the region, including the Ukraine war and North Korea’s relationship with its neighboring countries, will undoubtedly influence the future of the Rason SEZ and its economic potential.