The Juche-Oriented Development of Relations
of Foreign Investment

From the first days of building a new country, President Kim Il Sung ensured that the relations of foreign investment were developed on the principles of independence, equality and mutual benefit while precedence was given to the development of the independent national economy.

As it has developed the relations of foreign investment stage by stage in conformity to its actual situation and the trend of developing relations of international investment, the DPRK has followed the road filled with success.

Immediately after its liberation, the country, though its economic situation was difficult and complicated, sent large quantities of cloth, footwear and medicines to other countries free of charge, and later rendered unstinted assistance to many progressive countries and newly-emerging countries that were fighting against the imperialist aggression and domination to achieve regional peace and security and to build a new society. This constituted a model of genuine international solidarity. It also lent long-term loans in the form of a government loan to many countries, including developing ones, with which it had maintained friendly relations; their terms were always favourable to these countries.

In the meantime, it invested on its own initiative in the developing countries with weak economic foundations and in the countries and regions with abundant natural resources. In the 1970s it built irrigation facilities, farming machinery plants, hydro-power stations, spare parts factories and potteries in Guinea, Somalia, Madagascar, Cambodia, Mozambique, Benin, Guyana, Rwanda, Burkina Faso and many other countries. It built modern machine-building plants in the or of long-term loan in Iraq, Syria and other countries abundant with oil resources. It conducted wide-ranging economic and technological cooperation and exchanges with several countries including the former Czechoslovakia, Poland, Vietnam, Cuba and Romania, and enabled foreign students, interns and trainees to learn the experiences in economic construction in the DPRK and its latest achievements in science and technology.

Entering the 1990s, the government of the DPRK enforced a new policy of investing abroad aimed at further developing its external relations on a Juche-based stand. In these days many economic organs established relationship with several countries as demanded by the prevailing situation and the developing Korean revolution, and organized and ran such foreign-invested businesses as contractual and equity joint ventures, while conducting on site various scientific and technological exchanges in various forms like joint research, seminar, designing and experiment. In the course of this, the DPRK resolved many scientific and technological problems arising in its socialist economic construction, thus promoting the construction of a socialist economic giant and further developing external economic relations.

The government of the DPRK also pursued the policy of inviting foreign investment and utilizing it effectively in its socialist economic construction while still maintaining the principle of developing its independent national economy on a preferential basis.

With an insight into the role of foreign investment in the construction of the national economy, President Kim Il Sung said immediately after the country’s liberation that foreign production elements essential to the country should be introduced and utilized as suited to the specific realities and conditions of the country. Thus, the country organized foreign-invested enterprises in the relevant economic sectors with the former Soviet Union and other former socialist countries. Joint investment was made with the former Soviet Union in marine transport and oil processing in March Juche 36 (1947) and in air transport in August Juche 38 (1949). In Juche 44 (1955), when the laying down of socialist foundations was in full swing, it was decided to run the Suphung Power Station jointly with China, and in Juche 56 (1967), when socialist industrialization was stepped up, a shipping company run by the DPRK and Poland was incorporated.

In the mid-1980s, when the country was further expanding its investment relations with other countries, the country enacted and made public sector-specific laws on foreign investment so as to guarantee foreign investment activities by law. The first one was the Law of the DPRK on Equity Joint Venture made public in September Juche 73 (1984), followed in succession by the Law of the DPRK on Contractual Joint Venture, the Law of the DPRK on Foreign-Invested Enterprises, the Law of the DPRK on Foreign-Invested Business and Foreign Individual Tax, the Law of the DPRK on the Leasing of Land, the Law on Financial Management of Foreign-Invested Enterprises, the Labour Law for Foreign-Invested Enterprises and others, more than 50 in all. This provided a legal guarantee for foreign investment.

Based on this legal mechanism, four JV companies limited were established in Juche 75 (1986). This was followed by incorporation of foreign-invested businesses of various types, which now total hundreds across the country.

These businesses resolve many scientific and technological problems, rendering an active contribution to building the country into a socialist economic giant and improving its people’s standard of living.

In the early 1990s the government of the DPRK put forward the policy of developing special economic zones as a reflection of the demand of the changed international economic relations, the new investment trend and the prevailing situation of the country.

In December Juche 80 (1991), it designated Rason, a city with favourable geopolitical conditions, as a special economic zone, and invited foreign-invested enterprises there. This marked a major occasion in creating a fresh environment and conditions for promoting the economy in northeast Asia and activating its economic cooperation and exchanges with several countries of the world.

Entering the new millennium, the government of the DPRK legalized the establishment of the Kaesong Industrial Park with an aim at developing the economic cooperation and exchanges with south Korea under the ideal of By Our Nation Itself, thus creating favourable condition for the south Korean businesspeople to conduct investment and management activities more briskly. This was a demonstration at home and abroad of its invariable stand and will to turn the atmosphere of long-standing confrontation between the north and south into that of peace and reunify the country on the principles of self-determination and great national unity.

Through the country’s activities for foreign investment, its external prestige and dignity has become enhanced remarkably, many scientific and technological problems arising in socialist economic construction have been solved and an international environment has been created for the country to gain access to more international markets.

The successes achieved in the development of the relations of foreign investment are now being consolidated under the wise leadership of the supreme leader Kim Jong Un.

Recently the government of the DPRK has put forward the policy of developing special economic parks in a characteristic way in various parts of the country, and promoting construction of the Wonsan-Mt Kumgang international tourist zone and several other economic development parks simultaneously.