North Korean House of Cards

• Tourism represents a growing source of hard currency. An estimated
300,000 tourists from China and other countries visit North Korea on
an annual basis. 475
• Foreign investment in North Korea is difficult to track. North Korean
authorities claim to have secured $1.44 billion in investment from 306
foreign companies. The actual figure of foreign investment, according
to outside sources, is closer to $400 million, with all of this in the
Rason Special Economic Zone (SEZ). 476
• Sale of cell phones is a growth market for the regime. The meteoric
increase in cell phone availability has provided a steady funding
stream from the population. The registration fee is $140 and the
minimum price for a new phone in 2012 was an average of $300. From
2008-2012, nearly two million people signed up for cell service, netting
the regime a profit of approximately $720 million ($280 million in
registration fees and $440 million in phone sales). 477
c. Jang’s Interference in the Kim Family Business
Just as his father had done before his death, Kim Jong-un turned to Jang
Song-taek as a guarantor of the Royal Economy’s viability soon after coming to
power. It was expected that Jang would be able to leverage his relations with the
senior Chinese leadership to bring a substantial amount of hard currency into the
regime, which would reinvigorate the People’s Economy as well as the Royal Economy.
In the last months of Kim Jong-il’s life, Jang Song-taek had been engaged
in frequent talks with China, which came to fruition at the end of 2011 with the
agreement to jointly develop the Rajin-Sonbong SEZ in the northeastern corner of
the isolated country. 478 According to reports at the time, China planned to invest $3
billion to build infrastructure in the SEZ, such as railroads, power plants, and other
facilities by 2020. 479 North Korea would provide cheap labor. 480
475 Ibid.
476 Ibid.
477 Hong Sung-Ki, “South Korea Needs New Policy on North Korea in Kim Jong Un Era,” op. cit.
478 The zone is seven times larger than the Kaesong Industrial Complex (65.7 square kilometers),
the site of inter-Korean economic cooperation. The agreement entitled China to develop three new piers
and granted them the right to use the piers for fifty years.
479 These estimates proved to be “wildly optimistic” and ultimately unrealizable.
480 Choi Yoo-Sik, “China To Invest $3 Billion in DPRK Special Economic Zone,” The Chosun
Ilbo, February 16, 2012.
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