North, South Korea Reopen Kaesong Industrial Zone

nk-kaesong-trucks-sept-2013.jpg South Korean trucks cross the border into North Korea at Paju near the reopened Kaesong Industrial Complex on Sept. 16, 2013.

North and South Korea reopened their joint factory zone on Monday after a five-month hiatus but officials in Seoul remain concerned about the project’s competitiveness.

Thousands of North Koreans reported to work to restart assembly lines at the factory park in Kaesong along the North's side of the border following a deal reached last week between the two Koreas to revive the key cooperation venture on a trial basis.

Some 800 South Korean managers and trucks loaded with supplies crossed the border with the North and entered the industrial zone, which Pyongyang had ordered closed in April after issuing war threats following international sanctions in response to its defiant third nuclear weapon test.

The South’s Unification Ministry said 90 out of the 123 South Korean firms with factories inside the park were resuming “trial operations” with the aim of normalizing production later, Yonhap news agency reported.  

Some 32,000 North Koreans turned up for work, it said, as their South Korean managers arrived to assess maintenance and repairs.

Still 'quite a few problems'

Amid tensions that have eased since the shutdown, officials from the two sides have been holding regular meetings in recent weeks to discuss details of the restart, including legal protections for South Korean workers.

Kim Ki-woong, the Seoul-based co-chairman of the joint committee running the Kaesong Industrial Complex, said there were still several problems that need to be tackled to make the project internationally competitive.

“Even though the factory park itself has reopened, there are still quite a few problems to resolve to ensure the park is internationally competitive,” he told RFA’s Korean Service.

South Korean companies say they've lost a combined total of about 1 trillion South Korean won (about U.S. $920 million) during the closure and will reportedly need up to a year to get their businesses back on track.

Symbol of cooperation

The two Koreas have agreed to bring in international investors to the park—a living example of cooperation between the two countries, which have technically been at war for the last 60 years—and Pyongyang has pledged to avoid shutting down the park again.

North Korea's KCNA state news agency hailed the reopening of the park, which is a key hard currency earner for the cash-strapped North.  

"The Korean peninsula's peace and peaceful reunification is our republic's consistent and firm stance," it said.

The park produces household goods that generate close on U.S. $2 billion a year in trade with the South, as well as U.S. $80 million a year in wages for North Korea.

It has weathered nearly a decade of tension between the two countries and is the last remaining cooperation project between the two countries after the South withdrew aid in 2010.

Reported by Jae Wan Noh for RFA’s Korean Service. Translated by Bong Park. Written in English by Rachel Vandenbrink.

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