Tag: Kaesong Industrial Park

President Moon must be feeling pretty confident that in the short term the Kaesong Industrial Complex will reopen:

President Moon Jae-in vowed Friday to invite foreign companies to set up affiliates at the Gaeseong Industrial Complex (GIC) in North Korea if operations there are resumed.

“If operations at the Gaeseong complex resume, I will try to make it a place that houses multinational companies,” President Moon said at the start of a luncheon with businesspeople at Cheong Wa Dae, according to press pool reports.

The President appeared to be responding to remarks by Kim Ki-mun, head of the Korea Federation of Small- and Medium-sized Enterprises (SMEs), calling for the complex to be reopened to help small local businesses. Many of these are in a dire financial straits due to their investment in the complex, and a lack of new growth engines.

Korea Times

You can read more at the link, but Moon is probably betting that if large multinational companies set up shop in Kaesong that the Kim regime will be less likely to exhort South Korean businesses operating there like they have in the past.

For multinational corporations they will have to make a decision on whether they want their products built by near slave labor or not?

The responses on these surveys are dependent on what the question is. What do people think the response would have been if they respondents were asked if South Korea should restart the Kaesong Industrial Park and Gumgang Mountain tours if the money is used by North Korea to develop their nuclear and missile programs?:

More than 60 percent of South Koreans are supportive of the resumption of two suspended cross-border projects, saying they could contribute to the denuclearization of the Korean Peninsula, a survey of a presidential consultative body showed Tuesday.
According to the survey conducted by the National Unification Advisory Council on 1,000 adults, 62.4 percent said that restarting an industrial park in the North’s border town of Kaesong and a tour program to Mount Kumgang on the North’s east coast will help achieve denuclearization and boost the local economy.
South Korea closed the Kaesong park in 2016 in retaliation for the North’s nuclear and missile provocations. The tour program to Mount Kumgang was halted in 2008, when a South Korean tourist was killed by a North Korean soldier.
Seoul is seeking to resume the two symbolic projects on the belief that more cross-border exchanges could create a peace mood and help move the stalled denuclearization talks forward following last month’s summit breakdown between North Korean leader Kim Jong-un and U.S. President Donald Trump.
Their resumption, however, requires sanctions relief on North Korea and Washington has balked at it, worrying that the global sanctions regime could be undermined at a time when the denuclearization process remains stalemated.
The survey showed 54 percent supported easing sanctions in association with progress in nuclear talks, with 41.6 percent saying that sanctions should remain in place until complete denuclearization.

Yonhap

You can read more at the link, but this is clearly just another attempt by the Moon administration to shape public opinion to support their efforts to restart the two cross border projects. They need the public support in order to pressure the US to allow their “ethnic exemption” to sanctions.

I find it hard to feel sorry for this businesses that knew what they were getting themselves into in order to take advantage of near slave labor to make profits.  Their gamble ultimately did not pay off so why should the South Korean taxpayer be on the hook to completely bail them out of their losses?:

It will have been a year since they were forced to leave their workplace in North Korea’s border town of Kaesong this week, but nearly half of the firms that were once celebrated as symbols of reconciliation with the communist North are now struggling just to stay alive.

The 124 South Korean firms were told by their own government to leave the joint industrial complex a year ago Friday.

The unexpected shutdown of the joint complex followed a series of military provocations from the North that included a nuclear test in January 2016.  (……..)

He said the total damage suffered by all 124 firms came to at least 1.5 trillion won (US$1.31 billion).

The amount includes some 840 billion won in fixed and floating assets left behind in Kaesong, such as equipment and raw materials, as well as 150 billion won the firms had to pay in penalties or damage to their contractors and buyers for breached contracts.

Their combined losses stemming from reduced sales also came to 314.7 billion won in 2016 alone, the committee said.

The government, however, has compensated them 483.8 billion won, only 32 percent of the damage suffered by the firms, it added.

“The government has only provided some 359 billion won in compensation for investment assets in Kaesong and 125 billion won for floating assets, but refuses to provide any support for loss of business, the penalties the firms had to pay or any other damage stemming from the shutdown,” an official from the emergency committee said, speaking on the condition of anonymity.  [Yonhap]

You can read more at the link.

I hope no one is shocked by this news that the North Koreans sent undercover agents into the Kaesong Industrial complex to monitor workers and steal technology.  I would be more surprised if they did not.  It will be interesting to see how much the North Koreans have learned over the past ten years to see if they can run this industrial park by themselves:

Internal North Korean documents exclusively obtained by KBS have revealed that the communist state may have prepared for freezing assets of South Korean businesses at the inter-Korean Gaeseong Industrial Complex from the early stages of the cross-border project.

Papers from organizations of North Korea’s Workers’ Party in 2006 show directives to Pyongyang officials to learn and acquire the South’s “advanced” technologies at the Gaeseong industrial park.

While calling South Korea the “enemy,” the orders also stress that the North’s officials must be able to manage and run the factory facilities without the South’s help.

Another exclusively obtained document suggests that the North Korean regime also set up a surveillance unit to monitor workers at the factory park. Circumstantial evidence has also been revealed to suggest that North Korean soldiers could have been employed at the industrial complex as undercover agents.

Papers from North Korea’s Sixth Infantry Division also show authorities there had aimed to minimize the consumption and intake of South Korean products and “capitalist” culture.  [KBS World]

You can read more at the link.