Koreas agree to re-open Kaesong industrial zone

AFP, SEOUL

Thu, Sep 12, 2013 - Page 6

North and South Korea yesterday agreed to reopen the jointly run Kaesong Industrial Park on a trial basis starting on Monday, five months after it was shut during soaring military tensions.

The reopening date was settled after a marathon, 20-hour negotiating session and marks a tangible step forward for recent efforts to improve cross-border relations.

“The institutional foundation has now been laid for Kaesong to develop into an internationally competitive and stable industrial complex,” the South Korean Ministry of Unification said in a statement.

The two sides agreed that operations at the South-funded complex 10km over the border in North Korea would “resume on a trial basis from Sept. 16,” it said.

Born out of the “sunshine” reconciliation policy initiated in the late 1990s by then-South Korean president Kim Dae-jung, Kaesong was established in 2004 as a rare symbol of inter-Korean cooperation.

It provided an important hard currency source for the impoverished North through taxes, other revenues and its cut of workers’ wages.

It had appeared immune to previous downward spirals in North-South relations, but finally fell victim to two months of intense military tensions that followed a nuclear test by the North in February.

Pyongyang initially barred South Korean entry to the park in early April and shortly afterward withdrew its entire 53,000-strong workforce, effectively closing down the complex, which houses production lines for 123 South Korean firms.

Each side blamed the other, with the North insisting its hand was forced by hostile South Korean actions — in particular, a series of joint military exercises with the US.

As part of the deal, the North accepted the South’s demand that Kaesong be opened to foreign investors, a move seen by Seoul as a guarantee against the North shutting the complex down again in the future.

The agreement includes plans to host a road show for foreign investors at Kaesong next month.

Seoul had pushed for compensation for the companies hit by the closure and the two sides appeared to reach a compromise, agreeing to waive taxes for the firms this year.

The agreement came on the same day as the South Korean Ministry of the Defense’s announcement that it will show off a cruise missile capable of surgical strikes on the North when it stages a military parade in Seoul next month.

The parade on Oct. 1 marks the 65th anniversary of the founding of South Korea’s armed forces and is held every five years.

About 11,000 troops will take part along with picks from the South’s military arsenal, a defense ministry official said.

Also on display will be the Hyeonmu 3, an indigenously developed cruise missile that was first deployed on naval destroyers last year.

The Hyeonmu was presented two days after the North Korea carried out its February test.

“It is a precision-guided weapon that can identify and strike the office window of the North’s command headquarters,” South Korean Ministry of the Defense spokesman Kim Min-seok told reporters at the time.