Canadian Manufacturing

Rival Koreas talk again on reopening shuttered joint industrial park

by Ahn Young-Joon And Hyung-Jin Kim, The Associated Press   

Canadian Manufacturing
Operations justice Korea labour Manufacturing

North Korea estimated to have received $80-million in workers' salaries in 2012 from Kaesong complex

PAJU, South Korea—Officials from North and South Korea resumed crucial talks about reopening a shuttered factory park the rivals jointly ran until Pyongyang pulled out its workers in April.

The industrial complex in North Korea’s third-largest city, Kaesong, had been the last symbol of co-operation between the Koreas until Pyongyang halted operations during a torrent of threats earlier this year that included vows of nuclear strikes on Washington and Seoul.

Six rounds of talks on restarting operations went nowhere, and the last meeting ended in a scuffle between North Korean and South Korean delegates.

Ties have improved somewhat in recent weeks, and North Korean state media have published recent articles expressing eagerness for better relations.


But there’s still skepticism the Koreas can settle their differences and put aside the animosity that had both countries trading threats in March and April.

Seoul has been pushing for Pyongyang to provide guarantees that it won’t unilaterally shut down Kaesong when tensions rise again.

The industrial park, which lies just across the heavily armed border from Paju, South Korea, combined South Korean initiative, capital and technology with cheap North Korean labour.

It was also a rare source of hard currency for North Korea, though the economically depressed country chafed at suggestions that it needed the money Kaesong generated.

The talks come a day before a holiday in both Koreas that celebrates independence from Japan’s 1910-1945 colonial rule.

Next week Seoul and Washington plan a massive joint military drill.

Pyongyang used a previous routine drill between the allies, along with United Nations sanctions over its February nuclear test, to justify its outburst of threatening rhetoric in March and April.

The decade-old industrial park had survived previous periods of tension, including attacks blamed on Pyongyang that killed 50 South Koreans in 2010, and the shutdown of other big co-operation projects.

By the end of 2012, South Korean companies had produced a total $2-billion worth of goods during the previous eight years.

North Korea is estimated to have received $80-million in workers’ salaries in 2012, an average of $127 a month per person, paid in U.S. dollars, according to the Unification Ministry.

For North Korea, the park’s resumption is important because the country wants to draw outside investment to revive the economy, said Chang Yong Seok, a senior researcher at Seoul National University’s Institute for Peace and Unification Studies.

Pyongyang has to take care of its 53,000 Kaesong workers, and wants a return of the hard currency Kaesong provided, Chang said.

Analyst Kim Jin Moo at the state-run Korea Institute for Defence Analyses in Seoul said Kaesong’s possible permanent closure would also be a burden for the government of South Korean President Park Geun-hye, who started a single five-year term in January.

Park’s government would receive harsh criticism at home if Kaesong is permanently closed, Kim said.

Park has vowed a tough response to any North Korean provocations but has also supported a policy meant to build trust and encourage dialogue with Pyongyang.


Stories continue below