The respected Comrade
"A favourable climate and good conditions for investment should be created in our economic development zones in order to revitalize their operation, and wide-scale tourism should be encouraged."
The Economic Development Zones in provinces have points of sameness and difference at the same time with the Rason Economic Trade Zone (Rason ETZ), which was established in Rason area, North Hamgyong Province of the DPRK in December, Juche 80(1991).
The same point is that they are all Special Economic Zones (SEZ) which are established and operated within the territory of the DPRK.
The Law on Foreign Investment of the DPRK, the main law on foreign investment relations, stipulates as follows:
"A Special Economic Zone is an area where preferential benefits are provided for economic activities such as investment, production, trade and services according to the laws and regulations specified by the state."
This proves that the SEZ founded and operated in the DPRK is a special economic region where the preferential benefits are provided in economic activities and the conditions and environment of business management are different from other parts of the country.
In other words, the SEZ of the DPRK is an area which is newly established by the state apart from other normal areas, provided with various preferences and convenience as well as economic and legal environment favorable for investment and economic activities, in order to actively attract and effectively use the funds, technology and means of production at home and abroad.
The provincial economic development zone belongs to the category of the SEZ as an area in the DPRK where the laws and regulations specified by the state are applied and preferential benefits are guaranteed in economic activities in the same way as the Rason Economic Trade Zone.
This can be well understood by the contents of the relevant laws and regulations.
The relevant article of the Law of the DPRK on Economic Development Zone stipulates that the "Economic Development Zone is a Special Economic Zone in which preferential economic activities are guaranteed according to the laws and regulations specially set by the state" and the relevant article of the Law of the DPRK on the Rason Economic Trade Zone says that "The Rason Economic Trade Zone is the Special Economic Zone of the DPRK which was declared as preferential trade and investment, relay transport, finance, tourism and service area."
This shows that the provincial economic development zone and the Rason Economic Trade Zone are all the special economic zones of the DPRK with different names.
However, the provincial economic development zone and the Rason Economic Trade Zone have distinct differences.
The difference between the provincial economic development zone and the Rason Economic Trade Zone can be found primarily in terms of their functions.
In terms of function, the provincial economic development zone can be classified into comprehensive economic development zone and specialized economic development zone and most of them are specialized economic development zones.
For example, the Industrial Development Zone, Agricultural Development Zone, Export Processing Zone and the Advanced Technology Development Zone like Wiwon Industrial Development Zone in Jagang Province, Sukchon Agricultural Development zone in South Phyongan Province, Mubong International Tourist Zone, Jindo Export Processing Zone, Unjong High-Technology Development Zone etc. are the specialized economic development zones. There are a few of comprehensive economic development zones like Amnokgang economic development zone in North Phyongan Province, Manpho economic development zone in Jagang Province and Hyesan economic development zone in Ryanggang Province which combines of several industrial sectors.
However, the Rason Economic Trade Zone is not a zone specializing in a single business under the regulations of the Zone, but a complex type of special economic zone capable of setting up and managing various kinds of industries such as high-tech industry, processing industry, light industry, agriculture and service industries at the same time.
Therefore, it can be said that each provincial economic development area is not a comprehensive special economic zone reflecting the name of the area that performs the complex function in a certain area, unlike the Rason Economic Trade Zone, but a special economic zone which is collectively called the special-type and comprehensive-type development zones that perform different functions in each province.
The difference between each provincial economic development zone and the Rason Economic Trade Zone can also be found in the zone's initial area regulation.
The Rason Economic Trade Zone was defined to have an area of hundreds of square kilometres from the beginning as it had to perform comprehensive and complex functions such as international relay transport, trade and investment, finance, tourism and services.
However, the provincial economic development zones were defined as mostly square kilometres, taking into account the characteristics of the professional development zone.
The difference between the provincial Economic Development Zone (EDZ) and the Rason Economic Trade Zone can also be seen in the light of the different legal bases for foreign investment activities.
The legal basis of foreign investment activities in the Rason Economic Trade Zone is the "Law of the DPRK on the Rason Economic Trade Zone".
The law was adopted for the first time on January 31, Juche 82(1993) and it was revised and supplemented continuously to meet the requirements of the developing reality.
The law serves to develop the Rason Economic Trade Zone into an international relay transport, trade and investment, financial, tourism and service area by establishing a proper system and order in the development and management of the zone.
On the basis of the enactment of the Law, the pricing regulations, processing trade regulations, quarantine regulations, public regulations, etc. were drafted, amended and supplemented.
However, the legal basis of foreign investment activities in the provincial economic development zone is the "Law of the DPRK on Economic Development zone".
The law was adopted on May 29, Juche 102(2013).
With the promulgation of the Law on Economic Development Zone, the DPRK legally fixed and promulgated the actual establishment and operation of economic development zones in every province (city under the direct control) and on the basis of this law laid legal ground and foundation for setting up various enforcement regulations and related laws concerning the development zone.
The development and management of the EDZ is carried out by the enforcement of various regulations established on the basis of the sector law.
Practical works such as the declaration of the establishment of the EDZ, land realignment and construction of infrastructure, application for approval of the establishment of the enterprise and management of the EDZ are prerequisite to the enactment of various relevant regulations.
It has already adopted and published the rules for the establishment of the economic development zone, the rules for the establishment and operation of the enterprise, the rules for the operation of the management body, the rules for labor, the rules for environmental protection, the rules for taxation and the regulations for real estate.
The provincial economic development zone and the Rason Economic Trade Zone also have some differences in terms of economic relations with the outside of the zone.
The Rason Economic Trade Zone has several complex functions, and many of the problems arising could be dealt within the Zone.
However, because the provincial economic development zone is a special economic zone which performs a specialized function, certain problems arising in the production, management of the enterprise and even living are not all done within the development zone, and in many cases the services outside the development area are necessary; in other words, many problems arising in the management and operation of the businesses in each provincial economic development zone need to be solved in relations with the outside of the development zone and develop on the basis of them.
In reality, most of the dozens of economic development zones are local-level economic development zones.
As such, the provincial economic development zone and the Rason Economic Trade Zone are all special economic zones, but they also have distinct differences.
The provincial economic development zone as well as the Rason Economic Trade Zone will make a great contribution to accelerating the overall economic development of the country, the development of the local economy and the expansion and development of the external economic relations.
