North, South Korea to reopen Kaesong joint industrial park
Following long negotiation, North and South Korea decided to reopen their Kaesong joint industrial park next week. The industrial complex has been shut for the last five months during heightened military tensions between the two nations. The North accepted the South’s demand of allowing foreign investments in Kaesong- which Seoul views as a guarantee against the North shutting the complex down again in the future.
What is Kaesong industrial park?
Kaesong Industrial Park is a special is an economic unit in the Kaesong Industrial Region which lies 10 kilometres over the border in North Korea. The park was being operated in collaboration with South Korea. The idea of the park came into being through the “sunshine” reconciliation policy initiated in the late 1990s by then-South Korean president Kim Dae-Jung as a symbol of cooperation.
What are the benefits of Kaesong Industrial Park?
The Kaesong Industrial Park will revive trade between the two adversaries and may work towards easing tensions. On the economic front, the reopening of the park will specially benefit North Korea as it will provide important hard currency source for the impoverished country through taxes, other revenues, and its cut of workers’ wages.
In a quid pro quo, Pyongyang is likely to pressurize on Seoul to resurrect another cross-border project – South Korean tours to the North’s Mount Kumgang resort which could also significantly earn the country the hard currency. The tours were froze by the South after a North Korean soldier in 2008 shot dead a female tourist from the South who strayed into a restricted zone. In reaction to that, the North trashed a deal with the resort’s developer – Seoul’s Hyundai Asan company – and impounded its properties there.