Park is right on ‘global Kaesong’

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Park is right on ‘global Kaesong’

President Park Geun-hye is wooing investors to the inter-Korean joint industrial park in Kaesong, North Korea, inviting Italian companies to take a financial interest in the manufacturing base that merges South Korea’s technology and North Korea’s cheap labor. Visiting St. Petersburg, Russia for the G20 summit, she held sideline talks with Italy’s Prime Minister Enrico Letta. She told him that in recent negotiations with North Korean officials, the two Koreas had agreed to upgrade the Kaesong complex’s operations to meet international standards. She asked the Italian government and companies to take interest in the industrial park, which currently hosts only South Korean enterprises.

Announcing on Aug. 14 that the industrial park, which has been closed since April amid heightened cross-border tensions, would be reopened, the two Koreas agreed to work together to develop it as a globally competitive industrial base. The two sides pledged to draw foreign companies and upgrade labor, taxes, wages, and insurance conditions to international levels. They also agreed to hold joint foreign investment tours and give tariff benefits to exports of finished goods to third countries in order to make the joint complex a globally attractive and competitive manufacturing base.

President Park believes that the globalization of the Kaesong complex could solve many of its innate problems. She has named it as one of 140 goals in her national agenda. An international (as opposed to inter-Korean) Kaesong complex would be good to both Koreas. First, Pyongyang would think twice about using the industrial park as political leverage against Seoul by unilaterally disrupting traffic or operations if there are other governments involved. North Korea could expect an improvement in its global image by opening up and drawing foreign investment. President Park argued that if North Korea proved itself credible in meeting global standards, the complex would be a window of opportunity for the isolated country.

The two Koreas removed the last stumbling block to the reopening of Kaesong by agreeing to repair military telecommunications lines between the two forces along the West Sea. Business is expected to return to normal within weeks. Officials on both sides should try to carry through and reap the fruits of the President’s promotion campaign.

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