Koreas Reopen Kaeseong Joint Factory Park as Tensions Ease

Monday, 16 Sep 2013 03:13 AM

 

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SEOUL, South Korea — North and South Korea reopened their jointly run industrial complex Monday, reviving a lone symbol of economic cooperation five months after it was shuttered amid the North’s threats of preemptive nuclear attack.

Thousands of North Korean workers were returning to the Kaesong zone, located north of the border. From the South, more than 500 trucks, vans, and cars formed a bottleneck at a checkpoint at the heavily armed border, carrying supplies and company executives to the site to restart factories.

More than 120 companies operate at Kaesong, including watchmaker Romanson Co., and Shinwon Corp., an apparel maker.

“My heart’s in a flutter now that Kaesong is restarting,” Lee Mun Yong, who works for South Korean cellular phone parts maker Jaeyoung Solutec Co. Ltd., said at a transit office near the checkpoint. “North Korean workers are looking both relieved to have their jobs back and determined to work harder. The past five months has been a time of crisis for them.”

North Korea pulled its 53,000 workers out of Kaesong in April, capping months of tensions after it conducted a third nuclear test in February and threatened preemptive attacks when the United Nations stepped up sanctions and the United States and South Korea held annual military drills.

Kaesong has provided Kim Jong Un’s regime with much-needed hard currency and been a source of cheap labor for South Korean companies.

“It would not have been easy for North Korea to give up Kaesong because it’s a valuable source of hard currency,” Choi Chang Ryul, a professor of liberal arts at Yong In University near Seoul and a political commentator, said by phone.

SEEKING DOLLARS

At the border Monday, a line of people formed at a currency exchange booth run by Woori Bank, changing South Korean won for U.S. dollars, the only currency that can be used at Kaesong. Other South Korean workers shook hands and laughed as they chatted in groups inside the transit office.

“I’m glad I’m finally returning after so many twists and turns,” said Shin Han Yong, president of Shinhan Trading, which produces fishing nets at Kaesong. “We didn’t get to fish at all this spring and summer, so to speak. But I held on to the hope that Kaesong would open again.”

Gross domestic product in North Korea increased 1.3 percent in 2012 after a 0.8 percent rise in 2011, according to calculations released by South Korea’s central bank in July. The North’s economy has contracted in four of the last seven years, the Bank of Korea data show.

LAGGING SOUTH

North Korea’s per capita income was about 1.37 million won ($1,270) last year, or one-nineteenth of South Korea’s, according to the BOK estimates. Foreign trade, excluding commerce with the South, rose 7.1 percent to $6.8 billion, with exports increasing 3.3 percent to $2.9 billion and imports rising 10.2 percent to $3.9 billion, the BOK said.

The agreement to reopen Kaesong paved the way for a separate accord to revive reunions of families separated by the Korean War.

The next round will be held at a mountain resort in North Korea between Sept. 25-30. South Korean tours to the Mount Geumgang resort on the eastern coast were another symbol of detente before being halted in 2008 when a North Korean guard shot and killed a South Korean visitor.

Relations between the Koreas have improved in recent weeks, even as international concerns mount that the North may have reactivated its 5-megawatt nuclear reactor capable of producing one bomb’s worth of plutonium every year.

NUCLEAR REACTOR

The U.S.-Korea Institute at Johns Hopkins University’s School of Advanced International Studies said Sept. 12 that satellite imagery taken Aug. 31 shows white steam rising from a facility powered by the reactor at Yongbyon, north of Pyongyang.

That reactor was mothballed under a 2007 agreement involving the two Koreas, the United States, China, Japan, and Russia. North Korea officially quit the six-party talks, which aimed to offer it aid in return for giving up its nuclear ambitions, in 2009 before conducting its second nuclear test.

In early August, the Washington-based Institute for Science and International Security said the North had doubled the size of its uranium-enrichment facility at Yongbyon. Both plutonium and uranium can be sources of fuel for nuclear bombs.

© Copyright 2014 Bloomberg News. All rights reserved.

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