"[39], On 14 September 2018, the Inter-Korean Liaison Office located in the region officially opened. [4][5] However, 406 South Koreans remained at the complex after its effective closure. Like us on Facebook: http://facebook.com/voalearningenglish From VOA Learning English, this is the Economics Report. [1] The next day, the North announced it was expelling all South Korean workers and said it will freeze all South Korean assets and equipment at the jointly run factory park. [30] This also discussed the resumption of tourism in the Mount Kumgang Tourist Region. [6][28], On 13 September, before the reopening of Kaesŏng Industrial region, the two governments held a subcommittee meeting to iron out additional issues regarding entrance, legal stay, communication, customs and passing. More bodies wash up on bank of river Ganges, Ancient skeleton believed to be volcano rescuer, Cruise returns Golden Globes as NBC drops awards, French soldiers warn of civil war in new letter. Why is the US short of chicken and ketchup? Pilot construction was completed in June 2004, and the industrial park opened in December 2004. This came as tensions began escalating rapidly between Seoul and Pyongyang. The park allows South Korean companies to employ cheap labour that is educated, skilled, and fluent in Korean, whilst providing North Korea with an important source of foreign currency. The plan also called for a supporting zone, roughly a third the size of the industrial zone, that was meant for life-quality operations. [6] On 13 August South Korea said it would start distributing insurance payments to businesses in the complex, but also said it was open to new wording on the issue of joint control of Kaesŏng. February 9, 2016, 7:27 PM . Kaesong is a special administrative region of North Korea formed in 2002 featuring the Kaesong Industrial Park, a collaborative economic development … The Kaesong Industrial Complex (KIC) is a large industrial park in North Korea located just north of the demilitarized zone. It was formed in 2002 from part of the Kaesŏng Directly-Governed City. The Kaesong Industrial Complex (KIC), one of four special economic zones in North Korea, is an industrial park located in North Korea, just across the Demilita-rized Zone (DMZ) from South Korea.2 The KIC stands out because, in recent years, the other three zones have become dysfunctional for all practical purposes. For the first time, in 2011, the companies in the KIR recorded an average operating profit of ₩56 million ($56,241 US), finally operating in the black after years in deficit. Among the most pressing are U.S. economic sanctions against the North, prohibiting imports of key technologies and goods, such as computers. South Korean companies pay about $100m (£69m) a year in wages to North Korean workers in the KIC, according to Yonhap news agency. ", A group of businesses who suffered losses of 250 billion won ($200 million) due to the closure demanded an apology and said, "Now that the wage-diversion claim has proved groundless, the government must apologize for abusing state power to suspend the complex and make utmost efforts to reopen it. [12], The zone faces a number of obstacles. They also say that the Kaesŏng Industrial Region was the last hope for peaceful resolution to everlasting tensions between the South and the North, but now that it is closed, South Korean citizens' fear over national defense will intensify. This impairs the decision's legitimacy and could constrain our ground over a future restart of the complex, while hampering the companies' rights to protect their assets due to the hasty pullout process. Although President Kim had made the decision long before, work on the inter-Korean industrial complex only began in 2003 in the suburbs of the North Korean town of Kaesong, former capital of the Korean … An agreement to re-establish rail freight services was made in November 2007.[46]. A South Korean naval vessel, the Cheonan, was sunk in disputed waters, killing 46 sailors. The project as a whole has contributed almost $2bn in trade for North Korea, according to the Reuters news agency. [4][5] On 15 August 2013, both countries agreed that the industrial park should be reopened.[6]. Why is the US short of chicken and ketchup? Five years later, another $1.78 billion would be earned from annual corporate taxes levied on South Korean companies participating in the industrial project. It is becoming increasingly well-known for the Kaesong Industrial Complex, a "special economic zone", developed by Hyundai Asan with North Korea. [17], Green Doctors, an NGO founded in Busan in January 2004, received official government permission to open a hospital in the region in 2005. Three of the companies started operations by March 2005. Construction started in June 2003, and in August 2003 North and South Korea ratified four tax and accountancy agreements to support investment. Wählen Sie aus erstklassigen Inhalten zum Thema North Korea Bans South Korean Entering Kaesong Joint Industrial Zone in höchster Qualität. Kaesong Industrial Complex fact check ③ Is it helpful for’peace’ between the two Koreas? [36], In South Korean domestic politics, there were two opposing viewpoints toward the 2016 closure – while the Saenuri Party argued for the closure, stating that it was one and the only means to end North Korea's provocation, two other parties, The Minjoo Party and the People's Party, objecting to Saenuri, asserted that more communication is needed and that the closure would only escalate tensions in the Korean peninsula. The Kaesong Industrial Complex, home to South Korean companies employing North Korean workers, has been an island of relative peace amid the often-stormy inter-Korean relationship. [43], On 10 October 2018, South Korea resumed supplying water to the region. The eight companies were informed of a notice to pay ₩170,208,077 ($160,000 US) in taxes; two of the companies have already paid $20,000 in taxes to the North Koreans.[17]. The KIC is a duty-free zone, and there are no restrictions on the use of foreign currency or credit cards. (Photo: Getty Images) Nonetheless, their debate missed some important aspects of the KIZ, and included arguments based on misplaced assumptions about the reality of Kaesong. [8] The firms are taking advantage of low-cost labor available in the North to compete with China to create low-end goods such as shoes, clothes, and watches. It argued that would help North Korea start to reform its economy, which is in a dire state, and ease tensions between the two Koreas. The Kaesŏng Industrial Region (KIR) or Kaesŏng Industrial Zone (KIZ) is a special administrative industrial region of North Korea (DPRK). It was not shut down in 2010, despite two violent incidents. [18], In May 2010, following the sinking of the ROKS Cheonan and South Korea's response, North Korea severed ties with South Korea and shut its Consultative Office;[19] however, existing activities in the zone maintained production activities,[20] and transport and telephones to South Korea were operating normally. A joint committee was formed to determine if compensation will be provided for economic losses caused by the shutdown. Children killed in shooting at Russian school, From school choir girl to mummified cult leader, Israel-Palestinians: Old grievances fuel new fighting, 'I'm ashamed my father was a Capitol Hill rioter' Video'I'm ashamed my father was a Capitol Hill rioter', The family locked up by Australia for three years, The Indian newsroom counting the uncounted deaths. The project was launched in 2004, largely financed by the South to increase co-operation. The project was launched in … There are no connecting roads en route and a turnaround is available only in the South before entering the North. The government would be liable for hundreds of millions of dollars in insurance payments to the South Korean companies that use the complex. Communication and persuasion, or the 'carrots,' do not work anymore. [16], In 2012, the Ministry of Unification was informed that 8 of the current 123 companies had received a tax collection notice. Whether the Kaesong Industrial Complex is effective as a medium for peace between the two Koreas is the part where the most fierce debate unfolds. Pilot construction was completed in June 2004, and the industrial park opened in December 2004.[7]. [11] The different types of manufacturing performed in the park broke down to 71 textile and clothing firms, 9 chemical product firms, 23 that dealt in metals and machinery, 13 that produced electronics, and 8 firms of other kinds of production. Kaesong has no other industry and is unsuited for farming because of military facilities, so if the industrial park is shut down, the 40,000 workers face starvation. “North Korea built the Kaesong Industrial Complex because it can earn cash and take a large number of people hostage if it wants,” said a former intelligence officer who defected to the South. South Korea has suspended operations at a jointly run industrial park in North Korea following the North's recent rocket launch and nuclear test. Localisation de la Zone industrielle de Kaesong dans la province de Hwanghae du Nord (Corée du Nord) [21], On 3 April 2013, North Korea began to deny South Korean employees access to the Kaesong Industrial region. The route between the two highways is a paved road and part of the AH1 network. The Kaesong Industrial Complex (KIC) is located inside North Korea just across the demilitarised zone from South Korea. Read about our approach to external linking. Yes. It is one of the last remaining points of peaceful engagement between North and South Korea, and is often seen as an indicator of relations between them. Their wages, totalling $90 million each year, had been paid directly to the North Korean government. [38], In December 2017, an expert panel investigating the decision to close the park found that there was no evidence that North Korea had diverted wages to fund its nuclear program. The BBC is not responsible for the content of external sites. The Kaesong Industrial Park is run by a South Korean committee that has a 50-year lease that began in 2004. Access to the road is closed if there are restrictions from checkpoints upon entering the DMZ. The Kaesong Industrial Complex and the tourist zone on Mount Kumgang were the two linchpins of inter-Korean economic cooperation in the early 2000s, but both projects have been indefinitely shuttered after tensions flared between the Koreas over the past decade. First phase plans envisaged participation by 250 South Korean companies from 2006, employing 100,000 people by 2007. [15], In 2012, wages were estimated at about $160 per month, about one-fifth of the South Korean minimum wage, and about a quarter of typical Chinese wages. It was also seen as a way to encourage companies to keep production local rather than moving to China or other low-wage countries. There is no option of air travel available from Kaesŏng to the South. There are two modes of travel to Kaesŏng, road and rail. ", A One-Hour Commute to Another World - Los Angeles Times, "N. Korea withdraws demand for steep wage hike at joint park", "Companies in Kaesong Industrial Complex Receive Unannounced Tax Notices", "Seoul Decides to Continue Kaesong Project, Humanitarian Aid", "North Korea Responds to Firm South Korean Stance", North Korea blocks South workers from Kaesŏng zone, North Korea warns foreigners to leave South amid new threats of war, N. Korea blocks S. Korean food delivery to Kaesŏng staff, "Seoul to Pull Workers out of North Korea", "Kaesong talks: North and South Korea reach agreement", "South and North Korea agree to reopen Kaesong", "North and South Korea reopen Kaesong Industrial Complex", "South Koreans head back north to reopened Kaesŏng complex", "North Korea 'executes' army chief of staff Ri Yong-gil", "South Korea to Halt Work at Joint Industrial Park With North", "South Korea, U.S. to discuss missile defense; South cuts power to Kaesŏng park", "Seoul shuts down joint North-South Korea industrial complex", "South Korea 'humbly accepts' there is no proof border park cash...", "Koreas open 1st liaison office for better communication", "N Korea blows up joint liaison office with South", "North Korea blows up joint liaison office with South in Kaesong", "South Korea balloons: Seoul to ban people sending cross-border messages", "South Korea resumes supplying water to border town in the North", "Water treatment plants in Kaesong Industrial Complex reopened along with joint liaison office", Official website: Kaesong(Gaeseong) Industrial District Management Committee (KIDMAC) of South Korea, Official website: Hyundai Asan, the South Korean firm responsible for creating the Zone, South Korea Begins Supplying Electricity to N.K. South Korea responded by shooting shells at North Korea. © 2021 BBC. The closest airports in the South are Gimpo International Airport and Incheon International Airport, from which road access can be taken to the industrial region. KAESONG INDUSTRIAL COMPLEX Hwy-Chang Moon 1 Wenyan Yin 2 Seoul National University/ Seoul School of Integrated Sciences and Technology (aSSIST) Abstract In spite of the high potential of economic cooperation between the two Koreas, political tensions and international sanctions have discouraged the sustainability of economic outcomes. Per capita income in the North is estimated to be as little as $1,000 a year. The DPRK and ROK jointly operate an industrial complex in the Kaesong Industrial … Four South Koreans were killed, including two civilians. La zone industrielle de Kaesong (개성공업지구, Kaesong Industrial Region), créée en 2002, est une région industrielle formant l'une des trois régions administratives spéciales de la Corée du Nord. Entry into KIC was shut for several days and hundreds of South Korean workers were effectively trapped. By 2006, the 15 initial firms had all begun production including JCCOM, Yongin Electronics, TS Precision Machinery, JY Solutec, Magic Micro, Hosan Ace, Romanson, Munchang Co., Daewha Fuel Pump, Taesong Industrial, Bucheon Industrial, Samduk Trading, Shinwon, SJ Tech, and Sonoko Cuisine Ware. All 280 South Korean workers present at Kaesŏng left hours after the announcement by the North. The agreement included provisions designed to ensure against a similar shutdown in the future. VideoWhy is the US short of chicken and ketchup? Die Industrieregion Kaesŏng ist eine Sonderwirtschaftszone in Nordkorea nahe der Stadt Kaesŏng. La zone industrielle de Kaesong, symbole des relations entre les deux Corées Exploité en commun par Séoul et Pyongyang entre 2004 et en 2016, le … A barricade is set on the road leading to North Korea's Kaesong joint industrial complex at a South Korean military checkpoint (AFP Photo/JUNG YEON-JE) Jung Ha-Won. Kaesŏng Industrial Region is served by Korean State Railway from Panmun Station through the Pyongbu Line. However, after the introduction of the Sunshine Policy, 93 percent said unification must be achieved.Another survey before the 2012 presidential elections found t… Late in 2010, North Korean artillery units fired shells onto and around Yeonpyeong Island in disputed waters. Before the implementation of the Sunshine Policy in 1995-6, 30 percent of South Koreans answered that they were “fine without unification” in a survey. [27] Six rounds of talks were held without reaching a concrete agreement, with South Korea's insistence on a provision to prevent North Korea from closing the complex again in the future. [41], North Korea blew up the Inter-Korean Liaison Office in June of 2020 in response to South Korea not banning or punishing defectors from sending leaflets and flash drives into North Korea. The next day, the North announced it was expelling all South Korean workers and said it would freeze all South Korean assets and equipment at the jointly run factory park. Finden Sie perfekte Stock-Fotos zum Thema North Korea Bans South Korean Entering Kaesong Joint Industrial Zone sowie redaktionelle Newsbilder von Getty Images. [3], As of April 2013[update], 123 South Korean companies were employing approximately 53,000 DPRK workers and 800 ROK staff.
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