Low key approach keeps Gaeseong complex growing
By Kim Young-jin
Despite lingering tension between the two Koreas, the joint Gaeseong Industrial Complex in the North continues to take strides on the back of mutual economic interests and a low-key approach on the part of Seoul, analysts said Wednesday.
The Ministry of Unification said earlier that trade volume between the sides jumped 19.5 percent in the first half from the same period last year, reaching $825 million. The complex is a key source of inter-Korean trade.
It also rose more than 135 percent compared to the same period in 2009, the ministry said, showing sustained growth despite tensions over the North’s two deadly provocations last year.
“Both North and South Korea need Gaeseong,” Yoo Ho-yeol, an expert at Korea University, said. “The North needs the hard cash and the South Korean firms want to maintain their businesses.
“For Seoul it is also a channel to maintain communication. President Lee has taken a low key approach and it hasn’t been a source of trouble despite the two attacks.”
Some 47,000 North Koreans work at about 120 South Korean firms at the complex, which emerged out of the landmark inter-Korean summit in 2000 between the late President Kim Dae-jung and North Korean leader Kim Jong-il.
But the North’s deadly sinking of the warship Cheonan and shelling of Yeonpyeong Island last year put the lucrative project in question. Kim Kwan-jin, then the nominee for defense minister even said it should be shut down as it could hamper the military’s ability to respond in the event of a North Korean attack.
While the provocations prompted Seoul to cut off nearly all trade and aid to the North, the operations at Gaeseong were never completely halted, even given the Lee Myung-bak administration’s hard line Pyongyang policy.
“The businesspeople involved continuously asked the government to let them continue their work without obstacles and their voices were strong enough,” said Bahng Tae-seop, a North Korea watcher at the Samsung Economic Research Institute. “There has been steady investment from them.”
The cash-strapped North has remained mum on the project even at the height of the tension and even increased manpower there, signs of the economic benefits it reaps from the area.
Pyongyang’s growing ties with Beijing also ensure a steady route for selling the goods, Bahng said.
The expert added that the complex allows the South to gather “human intelligence” through the interactions between the North Korean workers and South Korean businesses.
The sides recently raised the minimum monthly rate for North Korean workers to around $64, though the regime and local authorities reportedly take most of it.
The workers, however, are apparently trying to make the most of their unique jobs. Numerous reports state that some keep instant noodles and chocolate pies supplied by the firms and sell them in the North’s bourgeoning markets.