North Korea enacts new law on setting up more special economic zones

SEOUL (AFP) - North Korea said on Wednesday it has passed a law on setting up more special economic zones, as the isolated state seeks to attract foreign investment in its moribund planned economy.

Parliament passed the law late last month, the official news agency said.

The zones will cater for industry, agriculture, tourism and export processing, as well as technology and other activities, it said.

"Foreign corporate bodies, individuals and economic organisations and overseas Koreans can invest in the economic development zones," the agency said.

"The state shall provide investors with conditions for preferential economic activities regarding the use of land, employment of labour, payment of taxes, etc."

Rights granted to investors and their investments and income will be protected by law, it added.

The agency said the new law does not apply to the existing special economic zones at Rason, Hwanggumphyong and Wihwado, Kaesong and Mount Kumgang.

The North is struggling to lure foreign investors amid tensions over its nuclear and missile programmes, which have led to tougher United Nations sanctions.

The South Korean-invested Kaesong industrial estate in the North has effectively closed down. The North pulled all its workers out in early April amid soaring military tensions with the South.

"This (new law) is a desperate attempt to lure foreign investors back to the North at a time when it is being pushed to the wall because of the Kaesong episode," Mr Cho Bong Hyun of the IBK Economic Research Institute told Agence France-Presse.

The law follows a directive from North Korean leader Kim Jong Un last year to build a special economic zone in every province in addition to the existing ones, he said. North Korea has nine provinces.

"But it is hardly likely to arouse investors' interest in the isolated country," Mr Cho said.

Join ST's Telegram channel and get the latest breaking news delivered to you.