[EDITORIALS]Clear obstacles then buildThe North Korean economic delegation Saturday wound down their nine-day excursion of South Korean industrial plants, leaving for Malaysia to begin their Southeast Asian tour. As they left, we heard from Pyeongyang that the two Koreas have agreed to launch construction of the Gaeseong Industrial Zone in December. These latest developments seem to herald a new era of peace and cooperation between North and South Korea. But this is offset by the uncertain and dangerous reality looming over the peninsula. North Korea's nuclear program is a hot button issue, not to mention problems with the Gaeseong agreement itself.
First, the North must provide a guarantee on security. To expect construction of the industrial zone to begin without resolution of the nuclear issue is unrealistic. Another problem with the Gaeseong Industrial Zone is Hyundai Asan Corp., which the North has chosen as its partner. Hyundai Asan is the company leading inter-Korean relations, but it is in financial difficulties. In addition, this former Hyundai affiliate was allegedly involved in funneling 400 billion won ($327 million), which the Hyundai Group received in loans from a state bank, to the North. Whether Korean companies willing to invest in the North can trust Hyundai Asan is doubtful. An alternative for the Gaeseong project would be the Korea Land Corporation or the creation of a new agency.
Another sticking point with the industrial zone project is the North's request for a minimum wage of $100 per month. Mostly small and medium-sized firms are the prospective occupants in the zone. Wages should be on par with the going minimum rate in Vietnam's industrial zones -- $50 to $60. Allowing workers to unionize can come later. If the North Korean party's pledge is true that it will create an environment where the South Korean businessmen can invest without concern, the North would do right to acknowledge that the fastest path to such an environment would be resolving the turmoil over its nuclear issue.
More in Editorials
Arrogance on display
Surreal real estate policies
Going against the Constitution
Don’t bend the rules
Praising themselves to the sky