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Asia-pacific

Two Koreas reopen joint industrial zone

© Photo: AFP

Text by News Wires

Latest update : 2013-09-16

An industrial park operated jointly by North and South Korea reopened Monday following weeks of negotiations between the two countries. The Kaesong complex closed down five months ago amid mounting tensions and threats of war on the Korean Peninsula.

Hundreds of South Korean factory owners and supervisors crossed into North Korea Monday to restart production lines at a joint industrial park closed five months ago by threats of war.

Trucks and cars started rolling across the border shortly after 8:30am (2330 GMT Sunday)-- the result of weeks of often spiky negotiations aimed at easing tensions and reopening the Kaesong complex.

"I hope we can work well together again, just like before," said the 50-year-old head of a Seoul textile company who declined to be named.

The optimistic mood at the border checkpoint contrasted sharply with the sense of impending disaster that had loomed over the closure of Kaesong back in April.

Months of heightened military tensions, with Pyongyang issuing apocalyptic threats of nuclear strikes, saw North Korea withdraw its 53,000-strong workforce from the joint industrial zone.

The situation has eased significantly since then, although underlying historical tensions and concerns about the North's nuclear ambitions remain.

Analysis of recent satellite images suggests the North has restarted the plutonium reactor that provided the fissile material for at least two of its three nuclear tests.

And in a highly unusual incident Monday not far from the Kaesong border crossing, South Korean troops shot dead a man trying to swim across a border river to the North.

The most immediate task for the South Korean managers was to inspect the state of production lines out of operation for nearly five months.

"Not all the North Korean workers showed up, partly because the plants aren't going to be back at full capacity for a while," said the supervisor of one textile plant when he crossed back into South Korea later in the day.

"But at some companies more than 90 percent of the workers turned out.

"The overall mood was upbeat. There was no fuss, no animosity," he said, adding that most of the day was taken up with cleaning, maintenance and repair.

Kaesong, born out of the "sunshine" reconciliation policy initiated in the late 1990s by then-South Korean president Kim Dae-Jung, was established in 2004 as a rare symbol of inter-Korean cooperation.

It provided an important hard currency source for the impoverished North through taxes, other revenues and its cut of workers' wages.

The South's Unification Ministry said 820 South Korean managers and workers had planned to cross the border into Kaesong on Monday.

"I'm glad things have returned to normal finally," said Shin Han-Yong, the chief executive of the Shinhan Trading company.

"I never believed the complex would be permanently closed. I think things will be all right from now on," Shin said.

In an effort to prevent any future closures, the North and South have created a joint committee to oversee Kaesong and deal with any problems related to its operations.

The South Korean co-chairman Kim Ki-Woong said future talks would focus on ensuring that Kaesong becomes internationally competitive.

"To reach this goal, there are still quite a few problems to resolve, even though the factory park itself has reopened," Kim said.

During the talks on reopening Kaesong, the North accepted the South's demand that efforts be made to encourage foreign investment.

Seoul believes having vested interests outside the Korean peninsula will make it harder for Pyongyang to shut down the complex the next time North-South relations go into freefall.

Kaesong, on paper at least, has always been open to foreign investors although none have taken the plunge.

A road show is scheduled to be held in Kaesong in October, but many experts question who would be attracted by a project jointly run by two countries that are still technically at war.

"What foreign firm in their right mind would consider investing in Kaesong?" asked Aidan Foster-Carter, a Korea expert at Leeds University in Britain.

"There are a myriad separate reasons to steer well clear," he wrote in a commentary for the Wall Street Journal.

Monday's re-opening of Kaesong is still officially on a "trial basis" as both sides continue to discuss operational issues.

An association representing the South Korean businesses in Kaesong welcomed the restart but urged the new joint committee to approve "firm measures" to prevent another closure.

The companies say the suspension of operations cost them a collective one trillion won ($920 million) in lost production.

(AFP)

Date created : 2013-09-16

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