A Korea Train Express (KTX) Sancheon high-speed train, manufactured by Hyundai Rotem Co., waits for departure at Seoul Station in Seoul. (Photographer: SeongJoon Cho/Bloomberg)

Economist Who Fled North Korea Says South’s Plan Falls Short

(Bloomberg) -- South Korea’s blueprint for railroad links through North Korea to China and Russia falls well short of Kim Jong Un’s vision for developing his impoverished nation, according to a defector who provides economic research to the government in Seoul.

While President Moon Jae-in’s so-called "three-belts" transport plan would benefit the North, given the poor state of its infrastructure, what the regime in the Pyongyang really wants is to ramp up special economic zones across the country, said Kim Byeong-uk.

Economist Who Fled North Korea Says South’s Plan Falls Short

"Installing new infrastructure, sure that’s good. But it’s an old plan," said Kim, who teaches North Korean studies at Dongguk University in Seoul and runs a small private economic research firm. "What South Korea wants is to connect the Korean peninsula to reach out directly to Russia and China, but what the North primarily wants is to shore up its own economy by bringing in more money from overseas to its special economic zones."

Kim, 55, who defected to the South with his family in 2002, said Kim Jong Un has increased the number of special economic zones more than five-fold to 27 since succeeding his father as North Korea’s leader in 2011. Kim’s research firm interviews defectors to gather information about facilities ranging from factories to schools and hospitals.

Economist Who Fled North Korea Says South’s Plan Falls Short

Kim Jong Un’s deceased father, Kim Jong Il, embarked on inter-Korean projects in the early 2000s with a joint industrial park in Gaeseong near the border with the South, and the opening of the Mount Geumgang resort to tourists from the South. Visits to Mount Geumgang ended when a tourist was shot dead in 2008. Gaeseong was shuttered in 2016 amid a renewed bout of cross-border tension.

While the regime in Pyongyang has focused on military and nuclear deterrence to ensure its survival, the time may have arrived for boosting the economy.

Following up on the historic meeting between the Kim Jong Un and President Donald Trump in Singapore last month, U.S. Secretary of State Mike Pompeo traveled to North Korea over the for talks. Differences between Pompeo’s description of his meetings and a statement from North Korea underscore the difficulties of finding common ground with the regime.

"Now that he sees the country is a nuclear state, Kim Jong Un is fully committed to pump up the economy," Kim said in the interview on June 29.

Kim’s wife Kim Young-hui, who is a specialist on the North at the Korea Development Bank in Seoul, concurs with his view that most of economic zones in the North remain severely underdeveloped.

“North Korea is dying to see an inflow of multinational and U.S. companies to its economic zones,” she said separately by telephone on July 3. “If Americans go to North Korea and start living there, then there’s virtually no chance that the U.S. would attack it or start lobbing bombs there. What could be a better security guarantee than having U.S. citizens in the country?”

She and her husband made their way to Mongolia before defecting to South Korea with their two sons. They declined to give more information about their escape. The pair provided few details on their lives in North Korea, although Kim Byeong-uk said his work in the civil service was as a provincial official in the far northeast of the country.

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