A joint inter-Korean industrial complex has made strides over the past decade but it remains an incomplete economic cooperation project due to its vulnerability to external factors, analysts said Sunday.
The Kaesong Industrial Park in the North Korean border town of the same name started its operations in 2004, in a landmark inter-Korean economic project that combines South Korea’s technology with the North’s cheap labor.
Despite a jump in its output, the industrial park, which marks the 10th anniversary of its launch on Monday, remains susceptible to political and military factors, leaving the sole inter-Korean economic project incomplete, according to the analysts.
According to South Korean government data, the output of the joint industrial complex reached US$230 million in the first half of this year, compared with $14.91 million for all of 2005.
Currently, some 53,000 North Koreans are employed by South Korean companies, up from roughly 6,000 in 2005. The number of South Korean companies with factories in Kaesong has also surged to
124 from 15.
South Korean companies are estimated to pay North Korean workers a combined $87 million in wages and social insurance per year.
Experts, however, said that inter-Korean relations still exert great influence over the operations of the joint industrial park, making it an incomplete economic cooperation project between the Koreas.
“The weakest point of the Kaesong Industrial complex is the fact that it remains sensitive to political and military factors,”
Hyundai Research Institute said in a recent report. “South and North Korea should operate the park regardless of political and military tensions in order to develop it into a stable and sustainable project.”
Amid heightened inter-Korean tensions last year, North Korea unilaterally withdrew its workers from the complex, leaving South Korean companies there idle for more than five months.
Earlier this month, North Korea announced a plan to scrap a 5-percent cap on the annual increase for Kaesong workers’ minimum wage and hikes in overtime payment.
South Korea said it cannot accept North Korea’s unilateral decision, heralding a clash with North Korea over the issue down the road.
The two Koreas remain technically in a state of war as the 1950-53 Korean War ended in a ceasefire, not a peace treaty. (Yonhap)
