December 09, 2014 09:57
A think tank has called for making the joint Korean Kaesong Industrial Complex a politically neutral place ahead of its 10th anniversary on Dec. 15.
The Hyundai Research Institute said in a report on Monday that the Kaesong industrial zone should be made a politically neutral region under the principle of separation of politics and economics to minimize exo-economic anxiety risk factors.
The Kaesong park started operations in December 2004, and eight years later was manufacturing products worth US$470 million annually, with some 54,000 South Korean staffers and North Korean workers.
The only inter-Korean economic cooperation project currently underway, it accounts for more than 99 percent of inter-Korean trade and transactions.
It has so far brought South Korea a net income of $3.26 billion and helped North Korea earn $380 million in hard currency, the institute estimated. It mainly provides an opening for smaller players in the South Korean light industry who would otherwise move production overseas in search of cheap labor.
But only five percent of the originally planned area or 3.3 million sq.m of land has been developed in the Kaesong industrial zone, resulting in a failure to draw more businesses and create more jobs, the institute pointed out. This is because of political and military reasons.
Political uncertainties and security concerns have put investors off and at one stage led to a temporary closure of several months, which had the knock-on effect of alienating customers. Other stumbling blocks are that cross-border transportation and customs clearance are not available around the clock and Internet and mobile phones cannot be used freely.
"From the political and socio-cultural standpoint, the Kaesong industrial park played a role as a minimum safety valve to keep inter-Korean ties stable even when other communication broke down," Hong Soon-jik of the institute said. "But now the two Koreas must allow investment in the industrial park to produce high value-added products and turn it into an integrated industrial zone, where tourism, commerce and trade and logistics meet."
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