South And North Korea Agree On Re-Opening The Kaesong industrial Zone

South And North Korea Agree On Re-Opening The Kaesong industrial Zone

An agreement by South and North Korea will set the stage for the resumption of operations at the Kaesong industrial Zone. The two Koreas agreed on a trial restart of the closed industrial zone on September 16 following discussions recently, according to the Unification Ministry of the South.

The company ceased operations in April following the withdrawal of workers by the North due to increasing political tension.

One hundred twenty-three South Korean factories are based inside the zone, which employs over 50,000 workers from the North. It is a major revenue source for Pyongyang and is the last joint project between the two Koreas.

A statement made by the Unification Ministry indicated that the zone is set to restart operations on a trial basis on September 16. Tax exemptions were offered to South Korean factories to compensate for the losses incurred due to the closure of the Kaesong industrial Zone.

Measures will also be implemented to facilitate access into the complex for businessmen from the South. A road show will also be hosted by the two Koreas in October to encourage foreign investments in the zone. The entry of foreign investors may discourage North Korea from closing the complex again in the future.

The ministry indicated that the foundations to allow the development of Kaesong industrial Zone into a stable and internationally competitive industrial complex are already established. The withdrawal of workers by Pyongyang resulted from increased tension in the peninsula after the nuclear test conducted by North Korea on February 12.

Expanded UN sanctions were imposed following the test. The annual military drills of South Korea and the US also incensed Pyongyang. Discussions on the reopening of the complex were stalled by the insistence of Seoul of establishing guarantees that will prevent suspensions in the future.

The five-point accord set last month lacked a date for the re-opening of Kaesong industrial Zone. South Korean businesses in the zone indicated that re-opening the complex will be beneficial for both Koreas. Tensions between the two countries have started to diminish recently with an agreement between the two countries to reunite families separated after the Korean War.

The reunion was scheduled to be held within the month as agreed upon by both South and North Korea.

Posted by James Fried on Thursday September 12 2013, 3:51 AM EST. Ref: BBC. Link. All trademarks acknowledged. Filed under Featured News, World. Comments and Trackbacks closed. Follow responses: RSS 2.0