Expand the industrial parkVarious products began to pour out from the Kaesong Industrial Complex 10 years ago today. The joint industrial park in North Korea remains a model for economic cooperation between the South and the North. About 50,000 North Korean workers at 124 South Korean companies churned out labor-intensive products worth $470 million in 2012. The Hyundai Research Institute estimates that South Korea has so far reaped economic benefits of $3.26 billion and North Korea $380 million.
The industrial complex has served as a testing ground for market capitalism and as a special economic zone for a number of South Korean enterprises struggling with soaring wages overseas. In political terms, the joint venture has contributed a lot to easing tensions along the heavily armed border. Despite a temporary shutdown of the complex due to the sudden departure of North Korean employees for political reasons, the resumption of operations last year is solid proof that it is instrumental to promoting peace on the Korean Peninsula.
However, the complex has many challenges ahead. According to the original plan, 700,000 North Koreans are supposed to work on a 8-million-pyong (6,535-acre) plot of land by now. But only 55,000 workers are at the complex at a space one-twentieth the size. Thanks to a higher level of education, higher productivity and lower wages than in China and Vietnam, the Kaesong complex can help ease economic hardships faced by the South and North Korean economies. The government can apply the successful model to more special economic zones in the North.
In order to do so, the conservative Park Geun-hye administration should lift or at least ease the May 24 economic sanctions that the former Lee Myung-bak administration imposed on the North to punish it. Seoul and Pyeongyang need to approach the issue from a long-term perspective of establishing foundations for reunification. North Korea must not hold the complex hostage to its political purposes because development is only possible when there is no political risk.
Both sides also must resolve issues such as traffic, customs clearance and communications. Next year, President Park finishes half of her five-year term and North Korean leader Kim Jong-un wraps up his three-year mourning period for his father’s death. It could be good timing for both sides to take a new approach. Expansion of the Kaesong Complex and construction of new joint venture parks across the North will serve as a fresh start for a positive relationship between the South and North.
JoongAng Ilbo, Dec. 15, Page 34