The Kaesong Industrial Complex as a Joint Prosperity Zone

|Korean Peninsula

Every morning at half-past seven, two commuter buses bound for Kaesong in the DPRK depart from Kwang Hwa Mun in central Seoul. They cross the demilitarized zone an hour later and enter the Kaesong Industrial Complex immediately afterwards, so many people are unable to conceal their surprise that “the DPRK is so close”.

Visitors are surprised once more by the transformation that has taken place in the Kaesong Industrial Complex in less than three years. It seems that the expression “mulberry fields turn into the blue sea” [an expression from a Chinese legend, meaning that “the world is a scene of constant changes”] exists precisely in order to describe this kind of situation.

During the Korean War, Kaesong was the main route used by the DPRK army to invade the South, and was a strategic military point for the DPRK army that was the scene of a fierce battle. An industrial complex covering 50,000 tsubo [1 tsubo = approx. 3.3m2] has been created in an area where there was nothing but military installations, hills, rice paddies and fields when work began in June 2003; at present, 15 companies from the ROK have established bases there and more than 6,500 workers from the DPRK and more than 500 workers from the ROK work side by side there. This year, 300 companies are due to establish bases there, with a total of 1,000 companies due to set up there within the next three years.

The Kaesong Industrial Complex project, which seeks to marry the capital and technology of the ROK with the land and workforce of the DPRK in order to achieve mutual benefits, is transforming the scene of the bloodiest, most fierce battle of the Korean War into a symbol of peace and mutual prosperity.

Last year, direct-dial telephones were installed in the Kaesong Industrial Complex for the first time since partition, 60 years ago, and it became possible to make telephone calls freely between the South and the North; in addition, 15,000kW of electricity is supplied from the ROK. Moreover, in October of last year, the South-North Economic Cooperation Council Office was opened in Kaesong and civil servants from both the South and the North are working together under one roof. Small and medium-sized enterprises from the ROK who wish to invest in the DPRK consult relevant individuals from the DPRK here.

Furthermore, the Kaesong Industrial Complex project is providing new opportunities for small and medium-sized enterprises from the ROK, which are facing a structure of high costs and low efficiency, and contributing to the relief of the DPRK’s economic difficulties, so it is hoped that it will become a crucial platform for creating a South-North economic community in the future.

Naturally, there are still many outstanding issues that should be resolved for the sake of the development of the Kaesong Industrial Complex, including the issue of the DPRK’s nuclear development program, the inadequacy of related laws and institutions, and problems relating to the labeling of products with their place of origin. It is hoped that, by eliminating these obstacles one by one, foreign companies will, in the near future, also be able to participate in the Kaesong Industrial Complex, which has begun to traverse the path towards mutual South-North prosperity while workers from both the South and the North work together.

[Translated by ERINA]