South Koreans head back to work in reclusive North

The Kaesong Industrial Complex, located in North Korea, was reopened Monday to South Korean businessmen after a five-month shutdown.

Lee Jin-man/AP
South Korean managers and workers wait to leave for Kaesong Industrial Complex at the Inter-Korean Transit Office near the border village of Panmunjom, which has separated the two Koreas since the Korean War, in Paju, north of Seoul, South Korea, Monday, Sept. 16, 2013.

Today the Kaesong Industrial Complex, a subject of protracted attention this spring, was reopened for a trial run after a five-month shutdown – a sign that North Korea may be turning more attention to developing its weak economy.  

South Korean businessmen are assessing factory facilities and determine what maintenance or repairs are needed before regular operations can be resumed. This morning 820 South Korean managers entered the jointly operated industrial park, which is about 10 miles into North Korea.

The jointly operated industrial park was shut in April, a time of exceptionally high inter-Korean tensions and nuclear bluster, when North Korea suddenly refused to allow South Korean businessmen access to their factories, and pulled out its own 53,000 workers. North Korea said its decision to close the complex was motivated by South Korean politicians who made comments that offended the dignity of North Korea. 

The tentative reopening Monday is the result of lengthy negotiations. On Aug. 29, the two sides agreed to a five-point accord toward reopening the complex. It’s in North Korea’s interest to get the industrial park functioning if it is to improve its economy, analysts say.

“The Kaesong complex is still a significant portion of the North Korean economy, so they have ample reason to want to develop it,” says Kim Yeon-chul, professor of unification studies at Inje University. “They also need economic exchange with the South, and reopening the complex prevents a permanent disconnect between them,” he says.

Some analysts argue that the Kaesong complex is being used as leverage to secure more aid from the outside world.

“North Korea has now conditioned the South to be grateful for even the smallest things they grant. Just by reopening the complex, they can appear conciliatory,” says Sung-yoon Lee, assistant professor of Korean studies at Tufts University's Fletcher School of Law and Diplomacy.

One of the conditions of the agreement between the North and the South to reopen the industrial park is the “internationalization” of the complex. This would mean bringing the complex’s operations up to international standards and courting foreign investors.

North Korea has almost no domestic market: Economic development generally has to involve the outside world. At the same time, the North is not an attractive investment option for most companies because of the lack of safeguards for foreign investors and the fact that it is impossible under North Korean law to own any assets in the country.

“For the most part, it’s just a few Chinese investors who are willing to invest in North Korea. Having the complex sitting closed sends a negative message to them or any other investors so there’s a chance North Korea could now attract some investment,” Professor Kim says.

But the ability of any foreign companies to invest in North Korea is limited by international sanctions.

Before it was shut in April, some 123 South Korean companies operated at the industrial park. Kaesong opened in 2004 at a time of friendlier inter-Korean relations.

It was conceived of as a way of matching South Korean manufacturers with workers who earned low wages by international standards, but that are high wages in North Korea. In 2012, $470 million worth of goods were produced at the complex and $80 million was paid in workers’ wages according to data from the Ministry of Unification, South Korea’s official body responsible for exchanges with the North, The wages are paid directly to North Korea, which takes an unknown amount and gives the rest to the workers.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to South Koreans head back to work in reclusive North
Read this article in
https://www.csmonitor.com/World/Asia-Pacific/2013/0916/South-Koreans-head-back-to-work-in-reclusive-North
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe