Why Gaeseong matters

By Andrew Salmon

The first inter-Korean talks since the ''war of words" in March and April were held over the weekend. As a result, it looks as if the troubled inter-Korean industrial park at Gaeseong will reopen.

This may not please conservatives, who have plenty of good arguments for killing the project and shutting down the whole shebang.

Firstly, it fills the coffers of those dastardly Norks with some $90 million of hard cash per year. How much tax Kim Jong-un in Pyongyang leaches off of that is unclear, but is not to be sniffed at.

Any hopes that Seoul might wield Gaeseong as economic leverage over Pyongyang have been dashed. If anything, the opposite happened: It was the North Koreans who shut Gaeseong down by pulling their workers out in April, causing much wailing and gnashing of teeth south of the DMZ.

Moreover, its symbolic value is dubious. What is the point of a symbol of cooperation when inter-Korean relations are at their lowest point in years?

Above all, why on earth should South Korea be helping fund a regime that trains its artillery on downtown Seoul?

Ergo, some argue, the best thing to do is to close Gaeseong down and good riddance.

In that case, the South Korean SMEs could, instead, invest in China or Southeast Asia where they will face neither the political risk nor the technological sanctions that make doing business with North Korea such a pain in the backside.

And Kim would have less hard cash to buy the cognac that buys the loyalty of his generals.

Convincing arguments? Perhaps. But with Gaeseong, there is bigger game afoot.

Under the "Sunshine Policy," Gaeseong was painted as a touchy-feely inter-Korean project that could prove that brothers and sisters from both sides of the DMZ could cooperate. The Sunshine Policy has long been discredited, but there is more to Gaeseong than meets the eye.

First and foremost, Kaesong provides a blueprint for a future, pre- or post-unification South Korean colonization of North Korea's dilapidated economy.

In monetary terms, the 123, low-tech South Korean firms at Gaeseong are small fry and there is no waiting list of other firms desperate to get in. However, if Gaeseong shows long-term promise, and if South Korea's big boys ― the chaebol ― could swallow the risk and invest in similar zones, then we could see real progress. Gaeseong itself is not going to be a change catalyst, but if another five, ten or 20 similar zones opened, possibilities arise.

And were South Korean investment to increase, it would be one of the best potential conflict obviators: States with tight economic ties have excellent incentives to avoid conflict.

Increased investment would also mean that South Koreans could be cutting themselves a slice of the pie from the Chinese firms who currently dominate the North Korean investment landscape.

The Pyongyang regime has already lost control of its economy and in recent years, all indications are that it is losing its grip on the minds of its citizens. The inflow of smuggled DVDs and thumb drives ― especially those containing South Korean films, music and TV dramas ― is feeding a people starved of overseas cultural input.

This input is eroding the state's monopoly on popular culture and propaganda ― which are essentially the same thing.

Similarly, the 55,000 workers in Gaeseong ― not to mention their families and friends ― are not only gaining useful experience working for profit-making enterprises, they are, gaining experience with South Koreans.

It is impossible to conduct a public opinion survey inside North Korea, but I would guess that in the process they are realizing that South Koreans are not the despised ''puppets" of Pyongyang propaganda, but fellow Koreans with greater economic nous, better business practices and (above all) better lifestyles than themselves.

(Indeed, some pundits speculated that the reason Pyongyang closed Kaesong may have been because North Korean workers were getting too chummy with South Koreans.)

Changed attitudes leading to a popular uprising possible in a state that is so successfully totalitarian as North Korea may be a pipe dream. But anything that breaks down the information wall that Pyongyang has constructed around North Korea, and which challenges the state's erstwhile monopoly on mind control, has got to be positive.

The more engagement the North has with the outside world, the better. The outside world includes, most critically, South Korea. Kaesong has failed as economic leverage. But as a benchmark for future projects, as an economic/information bridgehead in North Korea, as a catalyst for change and as a psychological weapon, its value endures.

Andrew Salmon is a Seoul-based reporter and author. Reach him at andrewcsalmon@yahoo.co.uk.

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